Mr. Gadkari, please allow automated cars.

http://www.autoexpress.co.uk/97379/ultimate-guide-to-autonomous-driving-pictures#0

 Mr. Nitin Gadkari, the Surface transport and highway minister, recently announced that driverless cars would not be allowed on Indian roads. The minister’s logic is that the driverless technology would take away jobs, therefore, it is not a good idea to have them on Indian roads.

The terminology driverless in itself is wrong. The Society of Automotive Engineers (SAE International) classifies 6 levels, from 0 to 5, of automation in automobiles. On level 0 are automobiles in which machines would issue warnings to the driver. On level 1 the machines and the driver would share the driving job. Assisted parking is an example of level 1 and is available in top end cars. Level 2 is hands off, level 3 is eyes off, level 4 minds off and the level 5 is fully automated or the real driverless level. The ultimate goal in this area is to reach level 5. However, for all practical purposes, the innovators are trying to achieve level 2 and leve3. The talk of levels 4 and 5 are for technology demonstration and publicity purposes alone.  For safety reasons, cars having level 4 or 5 will have very limited application in near and medium term future.

Most technological innovations are incremental in nature. Most of the Indian cars are at level 0. It doesn’t make sense to disallow level 5 when we are at the level 0. Disallowing it only means that the government, as of now, is averse to increasing automation in the automobile sector.

We Indians are always averse to automation as we worry that it would take away jobs. In the early eighties, all trade unions mostly supported by left parties went on a general strike to stop the introduction of computing technology in the banking sector. What happened? It delayed but couldn’t stop automation. And, the delay had its own cost.  We should remember that no one is born as a driver, a clerk or a teacher. We are all trainable. We can learn to do new jobs. The responsibility of the government is to facilitate that training. It should leave it to the market to sort out whether the technology is good enough to survive or not.

When a new technology comes into being, it creates winners and losers. When we move from level 0 to 2 or 3, some of the drivers may lose their jobs but many would get jobs in the IT industry. Given that India is the market leader in IT services having more than half of the world share, this movement will bring many jobs to the IT sector. I am not saying that the government should not think about drivers who may lose their jobs. Rather than stopping a new technology, the government should focus on training and equipping those drivers so that they earn their livelihood in the changed environment.


We don’t have any autonomous cars in India. However, the regular taxi drivers have already started losing their jobs. The advent of aggregators such as Uber and Ola brought a new category of drivers: part time drivers. Many of them are students or have other jobs. They got into this part time profession because it is economically beneficial. They would change to something else if this market stops rewarding them adequately. Some of the ‘kali-pili’ (black-yellow) taxi drivers have already lost their job but it doesn’t imply that the aggregator should not be allowed to function in the market.

I am not averse to the government playing a role in the market. But, the role has to be either of a regulator or of a facilitator. The government should not try to become a player. Minister Gadkari also promised that the government would come up with an aggregator platform which taxi drivers could use. This doesn’t make any sense to me.  Even the government has realized that the public enterprises rarely become good players in the market. That is the reason, our government is trying to get out from many businesses such as air transport and hospitality.  On the other side, Mr. Gadkari is talking about entering into another business. The government should act as the referee, as the rule maker, as the regulator rather than aspiring to become a player in the market. A player with a vested interest in the system can never be a good referee.

Even if the minister doesn’t ban this new autonomous technology, given the condition of our roads and traffic, he’ll have his wish come true. This would be really sad for the country.  The government should try to facilitate the entry of this autonomous technology as there are economic gains to be made. After all, stopping the introduction of a new technology is not good for the economy.

Modi, Yogi and the BJP

(Image taken from  http://www.logicalbharat.com/yogi-modi/)

Let me stick my neck out and say that there was no ‘Tsunamo', a portmanteau of Tsunami and Modi indicating the swell caused by Modi’s charisma alone, in the UP election. Let me also be clear that I am not trying to deny that Modi is immensely popular and contributed significantly to the BJP’s win in  UP. However,  Modi should not be given the sole credit as the term Tsunamo indicates. The BJP won as it was able to crack the winning formula and, more importantly, there was no united opposition. And, of course, Modi’s charisma was important for the formula.

The role of the absence of the united opposition is easier to understand. The SP got 21.8%, the BSP got 22.2% and the Congress got 6.2% of all votes. If they had come together, it could be said that their collective vote share would have been 50.2%, enough to decimate the BJP (worse than Bihar) in the first-past-the-post system. We shall come back to this point later.

The notion of the winning formula is more complex and, more importantly, it raises the question what stopped other parties from coming up with the winning formula.

Indian polity revolves around emotive, cultural and societal issues and not around economic issues. Religious sentiments (represented by Kamandal) and caste equations (represented by Mandal) are two such non-economic issues which have dominated the Indian polity for the last 25-30 years.  It is to the credit of  Modi that he made ‘achchhe din’ (representing development, an economic issue) as one of the important poll planks in the 2014 general election. Unlike many economic activities in which all participants gain, an election is a zero-sum game, meaning the win for one indicates the loss for all others. When Modi’s ‘achhe din’ was pitted against Nitish’s ‘sushashan’ in the 2015 Bihar election, the later with the help of opposition unity and caste arithmetic was able to defeat him. The BJP and Modi realized that development alone is not enough to win elections. It has to be supported by emotive issues and caste calculations.

In the 2017 UP election, BJP paid attention not only to the development plank and used Modi’s charisma but also to caste calculations at the constituency and district levels. What also worked in BJP’s favor is the availability of a cadre of volunteers belonging to the RSS to do booth level vote management. The absence of these volunteers in Bihar election cost the BJP dearly. The BJP win in this UP election can very well be attributed to the carefully crafted winning formula which was a combination of Mandal, Kamandal, and the hope for development which was backed by Modi’s charisma from the top and the RSS volunteers on the ground.

The RSS volunteers have been doing the lion share of ground work.  The RSS has a very pronounced cultural agenda. And, given their contribution to the electoral win, it is not possible for the BJP to ignore their right to weigh in heavily on the choice of the chief minister.

Yogi Adityanath represents this agenda in the BJP. It is no wonder that he has been given two deputies: Keshav Prasad Maurya to satisfy and represent the polity motivated by Mandal arguments, and Dinesh Sharma to represent the organizational side of the BJP and satisfy the Brahmins.

It is too early to say how the new ruling dispensation in Uttar Pradesh will turn out to be. Will they be able to take ‘sabka sath’ (everyone along) and do ‘sabka vikas’ (development for all)? Or, will they cater to the Kamandal and Mandal constituencies only?

If we look at the past RSS nominees for the post of chief ministers, we can clearly put them in two categories: 1. Who learned to look beyond the RSS, and  2. Who could not look beyond the RSS and caste politics. In the first category, we have Modi and  Shivraj Chauhan; and in the second category, we have Kalyan Singh and Uma Bharati.  Modi started his political career on the Kamandal plank: overa period, he metamorphosed into a Vikash Purush (a man for development) and again, after demonetization, into a ‘garibo ka messiah’ (savior of the poor). The same is true for Shivraj Chauhan and Raman Singh. These people continue to have long tenures.  Kalyan Singh and Uma Bharati failed to move beyond Mandal and Kamandal and, consequently, had short-lived tenures.

Successful politicians anticipate and shape the mood of the public and change their persona accordingly. Only time can tell whether Yogi would be able to reinvent himself or remain a prisoner of his current persona of a firebrand Hindu leader.

I am not saying that the Indian polity would suddenly move away from Kamandal and Mandal. Their importance in Indian elections cannot be denied. Just look at vote share of major parties in UP: irrespective of the winner, the BSP and the SP and the BJP have constantly received votes greater than 20 % each. However, the role of development would become gradually more and more important. All political parties talk about it. As 20% vote does not guarantee a win, you need a development agenda in addition to religious and caste calculations. As more development happens, the size of the middle class will increase. For them, Mandal and Kamandal may or may not remain important but their expectation for improved public services and its delivery and better law and order would definitely rise. Thus, my belief is that we have entered a cycle which is slow but virtuous.  In this cycle, all political parties will pay some attention to Vikas (development). Without Vikas, it would be difficult for them to come back to power.


If the BJP wants to win the next general election, it has to balance Mandal and Kamandal with a significant dose of development. If Yogi fails to reinvent himself, he would provide a platform for most of the opposition parties to unite against the BJP. The electoral math would become difficult for Modi to surmount. If Yogi goes through a successful metamorphosis, he would be able to pull traditional voters of the opposition parties (particularly of the BSP) in the BJP fold, and the BJP will have a great chance of succeeding in 2019.

Reducing Black Money in the Economy

Reducing Black Money in the Economy

What is black money? Black money is the money on which no taxes are paid. There are several channels through which black money gets generated. Let us consider three main channels

1.    Money Generated in Black Markets: Black markets emerge either when the State is weak or when the State effectively cedes control by, for example, prohibiting (ex: banning the sale of alcohol in Bihar and Gujarat) or limiting (license-quota raj) certain activities that are then picked up by daring entrepreneurs. All the gains generated in black markets take the form of black money.

2.    Bribe/Business Malpractices: An elected official or a government employee can not declare any bribe that he receives. He doesn’t  pay any taxes on this earning. This money, typically, doesn’t get invested in the white market and many times lies in the proverbial mattress. This is also black money as it gets generated through illegal means.

3.    Grey Money: When a seller doesn’t report the money (on which taxes have been paid- white money) received from a buyer of goods or services and pays no taxes, the money acquires the color black. Again, when the seller uses this money to purchase some other goods or services, and this new seller  pays his taxes, the money becomes white. In this case, the underlying economic activities are not illegal. Tax evasion is the only reason that the money becomes gray.

There are different ways of tackling the black money generated in these different categories. Black markets would not just cease to exist because the government has demonetized the higher denomination notes. The problem is of prohibition and license-quota raj. When I was young, hardly a day passed when I would not read a story of gold smuggling in newspapers. Now, we don’t hear such stories. What has changed? When the liberalization lead to the lifting of prohibitions, smuggling became a losing proposition. The only way to dismantle black markets is by removing prohibition and  liberalizing the market. Once the market is liberalized, those daring entrepreneurs join the legalized market and generate surpluses for the whole economy.

Curbing bribe and business malpractices are more difficult. We Indians believe in discretion rather than rules. Out bureaucrats and elected representatives enjoy  an amazing level of discretions. This discretion gets translated in favors which promote all sorts of corrupt practices. The process to fix corrupt practices is long and arduous and involves reforming state’s administrative setup. India embarked on the path of reforming the economy in 1991 which, in turn, lead to the removal of many discretions. Unfortunately, India didn’t complete the task and, more importantly, never tried to reform the administrative setup seriously.  

The origin and flourishing of gray money solely depend on  the tax regime in the country. The tax is collected for providing public goods and redistribution to the poorer section of the economy. In our country, the highest  income tax slab is approximately at 33%, which is way lower than what we traditionally had. As an extreme, in 1973, we had a whopping 97.5% as the tax rate. High tax rates (income/corporate/others) promote tax evasion. Lowering the income tax rate to the current level not only increased the tax base (people who pay taxes) but also increases the total income tax collection. The income tax rate should be reduced further. Many economists argue that the current rate is appropriate. They invariably compare India with  western countries, where the income tax rate is comparable to what we have or higher. Just to note, in some Scandinavian countries, the income tax rate is as high as 60%. The quality of public goods and for that matter redistribution of income is of far superior quality in western countries. It is not fair to compare India’s tax rate to those of western countries.Taxpayers in India don’t feel that they are getting a fair return for the taxes they pay for. They consider the current rate high. This high rate deters the income earners to declare their earnings correctly. Less than 5% of  the Indian populace pay the income tax. A higher proportion of total tax collection comes from indirect taxes, which is not a good idea as the rich and the poor pay at the same rate. I believe that decreasing the tax rates across the board not only will help broaden the tax base but also will increase the total tax collection. The demonetization has already  shown the stick to public, now it is the time that the government should show carrot by decreasing the tax rate so that more and more people declare their income and pay the taxes.

It seems that the time is ripe to carry out  the tax reform. The GST is being launched. It should bring more and more merchants/traders within the ambit of the tax regime. The government through the GST council and the general budget should commit to a complete road map to reduce both indirect and direct tax rates.

Side-effects of Demonetization

The downside effect of demonetization is a liquidity (absence of money as the medium of exchange in the economy) crunch.  The two main functions of money are to act as a medium of exchange and store of value. The logic behind demonetization is: 1. to put a stop on using these currency notes as a store of wrongfully gained value, 2. to stop the use of counterfeit notes from circulation. The problem is that demonetization has also jeopardized the medium of exchange function. In absence of currency notes, many desired transactions can not take place. An economic transaction between a buyer and a seller takes place because the buyer is willing to pay a price higher than the cost to the seller. The transaction generates a surplus to the society as both the buyer and the seller gain. This liquidity crunch would severely affect the economy. Prof. Ajay Shah in his article published in Business Standard paints a very scary picture. He says that removal of currency notes will decrease the liquidity to the extent that the country may go into recession. Prof. Shah recommends the restoration of a stable monetary system as soon as possible.

Prof. Shah’s logic is based on two facts: 1. India transacts in cash, and 2. currency notes of INR 1000 and 500 constitute 86% of the total cash volume. In absence of cash, major economic activities (86% percent: Prof. Shah’s estimate) would come to halt. This would adversely affect the income of potential sellers of goods and services(a demand shock) as well as adversely affects the mobility of the would-be buyer (a productivity shock). As there may be many small traders who would not be able to withstand this temporary shock, Prof. Shah thinks that the economy may not be able to bounce back  even when the system returns to normalcy.

The situation is bad, but probably, not as bad as Prof. Shah makes it out to be. However, the restoration of the stable monetary system is of utmost necessity. If this demonetization has to succeed, the government needs to pay immediate attention to ameliorate the liquidity crunch. Unfortunately, Prof. Shah doesn’t suggest anyway to improve the situation.

Let us, first, understand why I think that the situation would not lead to a recession.

Not all these demonetized currency notes were used as the medium of exchange. A fair proportion was used only as the store of value (in the proverbial mattress). All the arguments supporting the demonetization rely on this proportion being higher. Come December 30, we will have a fair idea of this proportion. If this proportion comes out to be low, the demonetization would be a colossal economic waste.      

More importantly, potential buyers and sellers would not waste economic opportunities because they don’t have cash.  I am not talking about barter. As two can barter only when there is a double coincidence of want meaning one has something that the other wants and the other has something that the first person wants.  It is difficult to find such  double coincidences. The solution lies in technology.

The Way Forward: Use of Technology

India, the principal provider of digital services to the world, lies far behind in the use of digital cash. Achieving a higher degree of cashlessness in the economy requires multiple and complex steps.  Fortunately, barring some crucial stages, all necessary ingredients to make our economy a digital economy is present in the country.

Fortunately, India has amazing mobile penetration. There are more than 103 crore mobile connections and more than 13 crore broadband connections. We all know how to top up/refill cash in our mobiles.  One can top up in the mobile account/ deposit accounts such as paytm, or all the banks can come up with such mobile cash accounts. This mobile cash can be used as a medium for transactions. The only innovation required is to top up without cash.  I am thinking of something like the ubiquitous STD booths at every corner  that we used to see at every corner in India  in the late nineties and early two thousands. These can be present in villages, cities, everywhere. People can go to these booths and top up their electronic cash account. The plus point would be that all these money would remain legally traceable. The government needs to act fast to come up with and promote such  platforms.

Political Aftermath of  Demonetization

According to the United Nation ( other estimates are also in the same ballpark), the per capita income in India in nominal terms in approximately USD 1585 which in rupee terms translate to INR 108000  per annum or  INR 9000 per month or INR 300 daily. Please remember, that the income distribution is positively skewed, meaning that the median earner in India earns much less than INR 300 a day. How many thousand rupees (strike that), 2000 rupee or for that matter 500 rupee currency notes, does an average Indian keep? A Jan Dhan account which allows deposits up to INR 50000 in this Nov9-Dec30 period and daily exchange limit of INR 2500 are more than enough for the average person.  The debate on demonetization is largely a political and monetary debate for the middle class.  An average Indian doesn’t care either for this demonetization or the debate. My belief is that he or she is happy that the government has done something to eradicate black money.

In consequence, I expect to see some political realignments. Losing the Bihar election was a big eye opener for the Bhartiya Janta Party (BJP). It figured out that it would lose whenever the opposition parties would cobble together a united opposition. Its traditional coalition of  upper caste north Indians, traders, and the urban middle class is not good enough to retain power in 2019.  The pan-Indian support that it got in 2014 may not be so solidly behind It in 2019. It needs to expand its base to all over India, particularly in the rural parts.  If BJP is able to manage this demonetization successfully, its potential to extend its reach significantly is likely to be realized.

Modi’s Move: A Retrospective Study of the Background

There are two hypotheses concerning corruption in India: greasing the wheel and sanding the wheel. The proverbial wheel represents the Indian economy.  The idea is that India has dysfunctional institutions and an obdurate bureaucracy, so corruption works as the lubricant and helps things advance, thereby enhancing the economic performance of the country. ‘Sanding the wheel’ notion alludes to the detrimental effect of corruption on the economy.

Not surprisingly, many scholars have found empirical evidence in support of the ‘greasing the wheel’ hypothesis. It means that corruption in India does help in achieving higher economic efficiency. What it doesn’t mean is that corruption is good for the country. Corruption is good only in the absence of good institutions. To put it simply, the best is to have good institutions which work without corrupt practices. And, the second best option is to turn a blind eye to corruption if institutions are dysfunctional.

Improving institutions involves lengthy and costly political processes. There are always people who thrive on the current setup of institutions. Any change/attempt to change the setup brings stiff opposition from these people. Even the economic liberalization of 1991 which improved the economic health of the country manifold had to face opposition from different quarters.

Mr. Narendra Modi became the Prime Minister of India in June 2014. It is not wrong to say that development and curbing the use of black money were two of his most important poll planks. By 2014 the process of institutional reforms had slowed down. The Congress party which ushered the economic reforms found itself unable to carry out any more reforms. The growth rate had deteriorated. Corruption was rampant. Anna’s movement against corruption became a testimony of public anger against corruption. The people of India wanted development and wanted to be ridden of rampant corruption. They voted for Mr. Narendra Modi with great expectation that he would be able to fix the twin issues of development and black money.

What made corruption so rampant and growth rate so low in India? [Between 1960 and 1980, India had a very low growth rate: 1.5% on average, it was jokingly called the Hindu rate of growth.] Despite the availability of cheap factors of production such as land, labor, and minerals, businesses didn’t thrive in India. The system that we had in place was called the license and quota raj which was antithetical to domestic investment and inflow of foreign capital in productive sectors. The license and quota raj also promoted several corrupt practices. For example, it became almost a norm to pay a bribe to get a license to start a factory. These corrupt practices were largely supported by the use of black money. Narasimha Rao’s government (1991-96) dismantled the license-quota raj to a large extent. Unfortunately, the corrupt practices and use of black money didn’t go away; it not only remained rampant in the economy but also permeated to the lowest level.

To experience a high growth, the kind which the Indian public was expecting, the kind which South Korea and Singapore experienced, it became necessary to have fair, honest and efficient institutions which promote domestic investment and inflow of foreign capital. The presence of corrupt practices and black money has stifled the both. Black money cannot be reinvested back in the formal sectors. So, people invest their black money in land, real estate and gold which creates excess demand causing the rate of return to rise in these sectors. Increased rate of return attracts even those investors who have no black money. The presence of corrupt practices and black money distorts the business environment which decreases the inflow of foreign capital.

India lacks the political consensus for reforms. Only strong political leadership at the prime ministerial level in the presence of dire economic situation is able to force economic reforms in the country. The Modi government has been trying its  best to reignite the engine of growth. However for Modi, the political math: the number in Rajya Sabha (the upper house of the parliament) is not in  favor. The Modi government’s attempt to pass the land acquisition bill failed. The entrenched interest of organized labor resists any reform in labor laws. Fortunately enough, the parliament was able to pass the GST bill. The government is carrying out piecemeal reforms, but the country is not able to achieve the high growth rate that is expected of it. The government gets A for the effort but a mediocre B- for the result.

The question was how Modi could Trump this game? There are two main ways of treating a disease: one is described in Ayurveda and another is popular in Allopathy.  Ayurveda emphasizes treating the root cause and fixing the system while allopathy believes in curing the symptoms. More than a half-way through his tenure, Prime Minister Modi sees that time is running out. For one reason or the other, he is unable to follow Ayurveda and is not able to fix structural problems of the economy. What worried him the most was his inability to make any progress on the account of bringing back black money. His government needed to do something fast. He needed to do something out of ordinary. And, it seems that Mr. Modi has found that something extraordinary: an allopathic tool to tackle the twin political issues of growth and black money.

One must appreciate Mr. Modi, as this move is not only extraordinary but also risky. Fight against corruption and black money in India is considered a difficult proposition for the simple reason that almost all of us have some black money and/or have used corrupt practices for some short-term gains. We all talk about the need to curb corruption but none of us really want the complete elimination of black money and corrupt practices. After all, it helps us lubricate our inefficient institutions.

The short-term impact would be chaotic.  Modi will need his leadership skills to manage this transition. There is a high probability (>0.5) that this move may not achieve the desired result. If this happens, Modi will be remembered as one term prime minister who squandered his chances on a crazy idea. But, I still appreciate his gumption that he decided to handle the black money in this particular way. There is also a good probability (less than 0.5) that he would be able to get the desired result and reap the electoral benefit in the next election.

What’s Next: Beyond the Breaking of Cycle of Terror

In my last blog  (randomthoughtsbyvk.blogspot.com/2016/09/cycle-of-terror-attack-on-uri-in-which.html), I advocated the need to  carry out a surgical strike on terrorist camps located in Pakistan Occupied Kashmir (PoK). One week later, the Indian Army did just that. I must congratulate Indian political leadership and the military.  Now, the question is: what’s next?

The first thing that we need to understand is who the enemy is. Indians living in the Kashmir valley and Pakistani citizens (even if they have an adverse opinion of India and Indian actions ) are not the enemy. The enemy is the Pakistani establishment: its government, army, ISI and terrorists. The Indian establishment should target these base and evil elements and try (as much as possible) to avoid causing any harm to  the innocent Kashmiris and Pakistanis. Like us, they are mere victims. And also, it is in our long-term interest to protect the civilian population. People from Kashmir ( J&K and PoK) should see their future in India and not in Pakistan. 

The aim should not be to destabilize Pakistan or to escalate the tension, but to make sure that the Pakistani establishment understands that they would have to pay a proportional price for any misadventure against India. Over a period, Pakistan started believing that India doesn’t have the political will to retaliate. By going in for a surgical strike, India has made it clear to Pakistan, and more importantly to the world, that it is not going to tolerate any such unprovoked attacks on Indian soil. 

This episode is not yet over. The ball is in the Pakistan’s court.  There are  three main possibilities:  

1.    Terrorist Attack/s in Indian Cities: The Pakistani establishment treats terrorism as one of its state strategies. It is most likely that they would try to do something along the line of the Mumbai Attack, the Parliament Attack, or the Pathankot Attack, or even a Plane highjack. The Indian establishment should be in a state of alert. Thwarting such attempts are very important. What is also important is that the Indian government should be ready to give a fitting (measured and proportional )  response by attacking  terror camps and training grounds of the terrorists who dare to participate in such misadventures. 

Time has also come to have a federal/central police force to tackle these terrorist attacks. I         understand that law and order is a state matter. However, the time is ripe for states and the         center to come together in the national interest and give birth to such a force. Cooperation on GST clearly demonstrates that if there is a need they can come together. We should not overburden the army with internal security.

2.    Fanning the separatist movement in Kashmir:  Pakistan may try more mischief in the Valley. The key to our response should be that we differentiate between  common citizens living in the Valley and political leaders hobnobbing with the ISI and the Pakistani Army. We should figure out ways to help our fellow citizens in Kashmir and punish these errant political leaders. Completing the Kashmir Railway quickly would be a step in the right direction. Including more and more Kashmiri youths stakeholders in Kashmir’s tourism Industry will also help.

3.    Retaliation along the LOC: This is the third possibility. The military should be prepared to give a fitting response (measured and proportional) to any Pakistani misadventure. The Indian establishment has asked the villagers living in the border areas to move out. These villagers need governmental support. The government should make all efforts to provide them transportation, food, abode and jobs. 

On the diplomatic front, our diplomats were very successful in isolating Pakistan. Not a single government (including China) said anything negative about these strikes. Our diplomats must have worked very hard  to achieve this.  They deserve to be congratulated. Their job, however, has not ended. They should continue to work with/on the western, south Asian countries and China towards making  Pakistan understand the pitfalls of using terrorism as a state strategy. The most important is to convince China that supporting terrorism is not going to help anyone in the world. China is strategically tied to Pakistan, and it sees Pakistan as a counterweight to India’s growing influence. However, in this highly connected world no-one is a permanent enemy or a permanent friend. Moreover, China has also seen the effect of extremism in one of its states “the Xinjiang Uyghur Autonomous Region”. The task ahead for our diplomat is making the Dragon see red in any form of terrorism. 

I should also mention that this terrorist strike has made the job of the central government more difficult. Their responsibility is to teach the Pakistani establishment a lesson without escalating  the tension. The speech given by the prime minister in Kozhikode was in the right direction. We should not forget that our main fight is against poverty, illiteracy, unemployment and  corruption. The government has to tackle these issues along with the menace caused by elements across the border. 

Cycle of Terror

The attack on Uri in which sixteen of our soldiers were martyred saddened me. The use of non-state actors to a wage a proxy war should be deplored at all levels. What surprised me most was the reaction of some of the political parties and commentators. Rather than supporting,  they blamed the army and the government. You may call me naive but I am of the view that at such times it is important to show a united face to the world community. It is imperative to make Pakistan understand that at any times of crisis, we are nation with one opinion. This is not the time to indulge in politics.

Pakistan’s modus operandi is very simple. It goes for a limited attack against India through non-state actors/terrorists. I remember Pakistan supporting the hijacking of an Indian Airlines commercial flight IC-814, Pakistani militants attacking our Parliament house and  the 26/11 attack in Mumbai. Pakistan’s strategy is to rely on big global powers to restrain India after each provocation.  It knows that given the nuclear capabilities of the two nations involved, the US, the UK, Russia, and China among many other nations would  put pressure on India to show restrain. To show that Pakistan is acting against these non-state actors, it officially bans some of these terrorist organizations, such as JAMAT UL DAWA, but in reality allow them to function without any hindrance. And when the temperature cools down, it even removes the official ban saying the evidence against these organizations were inadequate. The cycle repeats itself. If India needs to move forward on the issue of Kashmir, it needs to break the cycle.

Breaking the cycle is easier said than done. There is a lot of confusion: partly because what we want and what we are willing to do to achieve what we want are not that clear.  One thing that is clear is that we, Indians, do not like the current status of Kashmir. So, when I hear that the Modi government is working with a new doctrine (“Modi-Doval Doctrine”),  it gives me some hope. This is a recognition that the our current approach is not working. The current government which came into power with a decisive mandate has full right to to tinker and change the policy prescription. And if the policy fails, the political parties and others have all the rights to criticize the government. But to begin with, the government deserves our full support. Criticism at this point looks rather petty and dysfunctional.

At the current time, we do not have any white paper or official statement on the government’s policy. All discussions on this topic point to Mr. Doval’s 2010 lecture. Rather than relying on the lecture alone, let us see what the government has done so far. Mr. Narendra Modi became the first prime minister to talk about Baluchistan, Gigit and Baltistan. It is common sense to express your maximal position in a dispute. It gives you more bargaining space. Unfortunately, India never mentioned Baluchistan, Gigit and Baltistan earlier. Prime minister Modi certainly took the right step and gave clear indication to Pakistan that India would bring these regions also in the discussion. 

Some elements in the government have talked about stopping the provision of several amenities to Hurriyat leaders. I hope that this step is a well thought out part of the doctrine. What the government need is to distinguish between the Kashmiri populace and the elites who are leading the unrest. India should focus on punishing these elites while ignoring the wrongdoing of the general Kashmiri youth. What typically happens is the opposite: to control the situation, the Indian state ends up inflicting pain to the general populace while mollycoddling the leaders of these unrests.

Unfortunately there are no details of the Modi-Doval doctrine in the public domain. At this stage, I can only hope that the doctrine contains strategies to break the cycle of Pakistan’s misadventures. Pakistan has been playing this game for a long time and is used to getting away with it. Now, it is time for India to demonstrate that it would not take things lying down. Pakistan begins the cycle by inflicting pain on India and relies on the western world to rein in India from giving a befitting reply to Pakistan. India needs to change the game. One option is to surgically strike some of the terror camps located in Pakistan Occupied Kashmir (PoK). It is important that India begins with only those camps located in PoK and not the ones located in Pakistan. The distinction is important because of two reasons: first,India considers PoK as its integral part, and has all rights to take action in its own territory; second, as Pakistan considers PoK as an independent territory (only in name and not in action). A surgical strike will give clear indication to the world and Pakistan of the Indian intention. As earlier, the world leaders would like to de-escalate the tension and would put pressure on Pakistan not to retaliate. A strike in Pakistan would become difficult to manage diplomatically. 

Strip and Cavity Search

Devyani Khobragade,  India's Deputy Consul General in New York, was arrested, strip searched and put in the cell with common, petty criminals and drug addicts by U.S. Attorney for Southern District of New York. This lead to outrage in Indian media, polity and public. In retaliation, the government of India withdrew airport passes issued to US diplomats and removed the traffic barricade on the road leading to the US embassy in New Delhi.

The alleged crime that Ms. Khobragade committed was that she underpaid her nanny. This is a serious crime not only in the US but also in India. There can be two different approaches to see whether the diplomat was correct in paying  less than the prescribed minimum wage. The two approaches represent two different normative ethical theories: Deontology and Teleology. Deontological approach judges an action right or wrong based on the action's adherence to the set of rules. The rule prevailing in New York prescribe $7.25/hour for the workers who are not tipped and $4.90 to $5.65 for the workers who get tipped in various different industries. Ms. Khobragade was paying her nanny a wage of $ 3.31 per hour in addition to free lodging and boarding. In New York city, even basic boarding and lodging amenities would  bring the nanny's hourly wage above $10 per hour, well above the wage rate specified by the law of the land. If you ask me, I say that the diplomat didn't underpay her nanny. One problem, however, remains that the New York law didn't specify the minimum hourly wage rate for which workers get free accommodation and food; therefore if one goes by the strict interpretation, $7.25/hr rate should have been paid to the nanny.

The second approach, teleology or consequentialism holds that the consequence of one's action is the fundamental basis for the judgment about the rightness of that action. The nanny was having a better life as the consequence of getting this job the diplomat. She was not held captive or worked unwillingly. She took this job with the full knowledge of perks associated with it. Clearly, the diplomat compensated her well. No mistake, one can attribute to the diplomat on the consequential principles.

Low enforcement agencies  work on deontological principles. However, laws are made using consequential picture in the mind. Even if Ms. Khobragade is guilty based on strict deontological interpretation of  law, she should not have been strip searched. I am saying it tot because she is a diplomat and enjoys privileges but because such procedures are inhuman in nature. To me, strip search and cavity search are violation of human body and mind and tatamount to rape. It should be done only in exceptional cases and not in all cases. This is not an excuse that the standard procedure was followed in her case. It is time that government of India should start protesting the human right violation of all suspects in the US. It is imperative that Government of India ensures that no one, particularly no Indians,  should go through cavity search unless there is a specific need.
 
India is the most populous democracy and the US is most powerful democracy. The US needs India as much as India needs the US. Both governments should work together to get out of this mess because this mess, if not amicably resolved, has potential to put the US-India relationship in jeopardy.