Our Chakravyuh

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  1. The views mentioned here do not necessarily represent those of the author. This exercise is just to present a case.
  2. The author has little expertise on the issue discussed here. He has never visited a naxalite area nor does he ever intend to.

You are right – this is inspired from the movie “Chakravyuh”. Naxalism or Left Wing Extremism remains an issue most of us remain familiarly unfamiliar with. The movie raises the issue nicely and brings out its many faces – perhaps better than any other movie in my generation.

But you are wrong – this is not any review of the movie. The idea here is to derive from the movie the various insights it offers and to dwell upon the real life questions which naxalism poses.

First and foremost, what is naxalism? Is it a mere ‘law and order’ problem? Or is it the much more dangerous but equally senseless terrorism? Or perhaps a sinister attempt by some foreign nations to destabilize our country? Is it just a business setup by the naxalites to extract money? And are the naxalites simply some miscreants who are misguiding and exploiting the ‘ignorant and illiterate’ tribals to their own end? Your answer to this question will invariably depend upon who do you think is ‘right’ here and to what extent.

But keeping biases apart lets consider some basic facts. This movement has been raging on in its present form since at least 45 years. This movement has had to face the armed might of the state continuously since almost its beginning. This movement has only spread since then. And this movement is the strongest in some of the most backward tribal areas of the republic. What these facts tell me simply is that this movement has got something right about it. To face the armed might of the state and yet to grow like this means the movement is popular. And 45 years is a long time over which nobody, however ignorant and illiterate, can be fooled. It means this cannot simply be dismissed as a ‘law and order’ problem or ‘a foreign hand’. Of course in a movement as large and as long as this, such elements are bound to creep in. But in its core, deep down, these facts tell me that there are genuine problems of the tribals and this movement genuinely represents them.

So this brings us to our next question – what are these grievances? Simple enough, isn’t it? Ask any MBA student – widespread poverty, illiteracy, hunger, ignorance, disease. And to address them we need to usher in ‘development’ in the area. This development means building roads, schools, hospitals and providing employment opportunities. So why haven’t we been able to address such issues so far? Because – (a) These naxalites don’t let us build there for they are afraid of losing their hold over the tribals, and (b) India is a poor country and lacks resources.

None of the above is false. There is indeed widespread poverty, illiteracy, hunger, ignorance and disease in the tribal areas and these form for genuine grievances. But history tells us that people put their lives at stake and revolt not when they have something to gain by revolting but when they have something to lose by the maintenance of the status quo. And the only thing which these tribals possess is their way of life. And in this way of life, their land on which they live and depend upon for livelihoods is an integral part. Its only when this land is threatened that the tribals will rise in revolt.

While schools, hospitals and employment opportunities sound nice and are welcome, the reality is that in the model of development we follow, these often come with a displacement of the tribals from their native lands. And this is where the problem starts. First of all our rehabilitation and resettlement policy is sh*t. In the name of compensation for the lost land we pay literally peanuts. It is ironical that while this law (of paying peanuts in compensation) was brought about in the name of social justice (land reforms), today this has become the single biggest weapon in exploiting the oppressed tribals. Secondly, in many cases even these weak provisions are not applied. Tribals are simply evicted by a nexus of the government and industrialists and purely by brute force. This government – industrialist nexus is so strong even at the topmost level that when there were attempts to empower the land owners in the new Land Acquisition Bill by paying them a compensation of 4 times the official land rate (which itself is 1/10th or 1/20th of the market rate in most cases) the industry raised a big cry and the government had to dilute the provisions of the Bill.

In the mines so built, of course some tribals will get jobs and if the mine owner keeps his promise, a school and a hospital would be built. But such gains are a mere fraction of the loss of land which they have to endure. And of course a smaller percentage still of the profits of the mine owner. Mines and dams are capital intensive activities – just how many workers are employed in them? And how much are the unskilled workers paid out of the mine owner’s profits? And it is no secret that over 99% of the coal mined or 99% of the electricity generated is never utilized in the same area. It is just used for the consumption of rest of us – the ‘citizens’ of the republic.

Finally who exactly are we to decide the course of development of these tribals? We are the majority… so what? The minority rights have to be protected from the tyranny of the majority for building a just society. After all don’t we think that the minority Jews also had some rights under the majority Nazi Germany? Or that the minority Tamilians have a right to life in a majority Sinhalese nation? Shouldn’t the tribals decide for themselves what course of development do they want? For a change, can we just let them live?

But how can they decide – they are too ignorant. Left to themselves they will never choose a developmental path and may remain forever in ignorance. “Like school kids… they need a master…” Aah… doesn’t that begin to sound now like the British paternalism which made for the moral foundation of the Raj?

And if we argue that we need those resources not for them but for us, then haven’t we removed even the mask of ‘development for them’ here? Isn’t this naked colonialism?

So does this mean that we should not utilize the tribal resources at all? If that be the case, what will happen to the number called ‘growth’? What will happen to the rest of us – the citizens? Well imagine if some alien species wants to destroy Earth tomorrow to make way for an interstellar expressway1? Isn’t it development? Would we support it? Of course not… just because we happen to be on the other side of the table this time. We would argue that anything which happens to the Earth should be done with the consent of the Earthlings. Shouldn’t we apply the same concept when it comes to the ‘development’ of the tribal areas? Shouldn’t we create an enabling environment for the development of strong self governing institutions in tribal areas and then require their free and fair consent before doing anything which affects them in a significant way? That I believe would be the way out of this Chakravyuh.


1Borrowed from “A Hitch Hiker’s Guide to the Galaxy”.

UPSC Essay: Is the criticism that PPP model of development is more of a bane than a boon in the Indian context justified?

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Public Private Partnerships (PPP) model of development is no alien concept to India. In the age of the Chola kings as well the state used to give tax concessions and land grants to those who got tanks and canals built. Closer to our times, the construction of Indian railways is a classic example of PPP in operation. Post Independence, given our explicit preference for the state led development, the PPP took a back seat for some time. However, after liberalization PPP is back with a new vigor. Thus in the 10th Five Year Plan nearly 21% of the expenditure on infrastructure came from the private sector, this climbed to 33% in the 11th Five Year Plan and in the 12th Plan it is expected to be about 50%.

Clearly our planners think that PPP is the way forward, so we must pause here and examine the rationale behind preferring it.

The biggest rationale, perhaps, in favor of PPP is that the government simply doesn’t have enough money. After all, still not a generation has passed when one had to wait for years to get a landline telephone connection. Just imagine, would we have been able to scale up our education, power, roads, ports and airports to meet the demands of a rapidly growing economy like ours? Reliance on public funds alone would have choked off our growth even before it could have taken off.

Another reason for preferring PPP is that the governments are slow and tend to work in silos. Thus a project is broken into many parts and every part is handled by different people / departments. They tend to work in vacuum unmindful of what is happening to the other part. But a project is a project and needs the success of all its parts for it to bear fruits. A good example here is the case of roadways. While road development is a part of the ‘plan expenditure’, road maintenance falls under ‘non-plan expenditure’ and is often neglected. But what is a road without maintenance! PPP overcomes this by treating the project as a single unit. So the operator itself is required to maintain the road in a good condition.

Finally, PPP is attractive because it is in alignment with the twin pillars of modern economic logic. These pillars are –
Everyone should only do what he is good at or in other words everyone should assume only the risk one specializes in; and
Governments must step in to correct the market failures.
PPP enables separation of jobs. Thus the job of the government is to provide land, help the project in meeting various regulatory requirements while the job of the private party is to build and operate. Moreover wherever the social good is more and private benefit is less (for instance a road connecting a village to the highway), the government can always correct the likely market failure by its Viability Gap Funding Scheme.

Despite these, many criticisms are levied against PPP. Perhaps the biggest among them is that it breeds corruption and rent seeking. If there is any truth in the CAG reports on coal, 2G, GMR or in the joint parliamentary committee report on CDSCO then indeed there appears to be a serious flaw in the model. However, a closer examination tells us that the flaw lies not in the model per se but in the method of implementation of the model. The alleged corruption happened in coal and 2G because of opaque processes and in GMR and CDSCO because of the weakness of the regulator. If we had transparent processes in coal and 2G and strong regulators in GMR and CDSCO cases then the corruption would never have happened. Moreover, by no means is corruption limited to PPP only. Should we also close down MGNREGS and NRHM because there have been reports of corruption? No, clearly no. We should instead find ways to tackle such corruption.

Another criticism levied against PPP is that often the ‘public purpose’ in the PPP is pushed to the background and private operators work simply to maximize their own profits. A case can be made out of the many ‘super profitable’ toll roads like the Jaipur – Kishangarh one and the KG gas basin project.

While this is a meritorious criticism, it must be emphasized that it is again specific to the implementation of the model. If the terms and conditions of the project clearly link the rewards to the private operator to certain well defined public good then such a situation will not arise. For instance, while auctioning the coal fields to power producers, we should award the coal to the party which will provide electricity at the lowest cost. There will be no contradiction between transparency and public good then.

Next a case is made out that in PPP mode there is information asymmetry. Because the operator is closest to the project, he can take the government for a ride. An example here is the KG basin project where now the wells are full of water. ‘Coincidently’ the operator is also demanding that the gas price be raised from $4.2 per mmBtu to $14 per mmBtu.

The government has appointed the Rangarajan committee for that. And one of its ToRs is to specifically look into ways to monitor the project more effectively. Perhaps making the initial terms and conditions of the project clearer and having more regular and better audits can help here.

Then some argue that the infrastructure projects require high end technology and have long gestation periods and hence are not suitable for private operators. While in the 50s and the 60s this argument could have held great merit, today our companies own some of the most sophisticated technologies and have finished some massive projects.

Finally before writing PPP off, one should think of what really is the alternative? Clearly a return to the public funding is ruled off due to the reasons mentioned earlier. Similarly total reliance on private markets would generate their own complications as well. There would be massive market failures – there would be no PURA, no electricity in our villages and who will teach our children? A good example of what can go wrong in private markets is the case of micro finance in Andhra Pradesh while that of what can be right with PPP is the case of self help group based finance in Assam. Here the state government assists these SHGs by providing easy credit from the Rajiv Gandhi Vikas Nidhi.

Thus what we need is transparency in procedures and strong, independent regulators. The functions of policy planning, implementation and regulation must be separated. It may also be a good idea to make these regulatory bodies report directly to the parliament. After all, isn’t the parliament the supreme regulatory body in our country? Then to check the information asymmetry problem, we need better terms and conditions and audits.

Perhaps then PPP can truly be a boon for India.