Delhi Hi Ast (It is only Delhi)

“Sultanat-e-Shah Alam, Az Dilli ta Palam” (literal meaning “the kingdom of Shah Alam, is from Delhi to Palam”).

After almost 175 years, we see history repeating. History is a fascinating subject which has always interested me simply because as you scan world history across centuries, you see the same pattern repeating again and again. I am about to report a similar observation in the current political context. It is a tale of two glorious dynasties and what they got reduced to. And the similarity of situations in their dying gasps. We often get dazzled by the noise and light of the news media but look underneath and we notice that all that remains is “Delhi Hi Ast”. Let us look at both stories and enjoy the similarity in histories.

The two dynasties in question are the “Great” Mughal dynasty and the “Greater” Nehru-Gandhi dynasty both incidentally centered around Delhi (Agra for a while for the Mughals but the same vicinity).

Both dynasties were founded by self made charismatic men – Babur for the Mughals who left the rather dry and sour Samarkand to the rich and prosperous lands of Hindustan. He was brave, strong and innovative and founded the Mughal empire after duly defeating Ibrahim Lodi in the First Battle of Panipat.

The Nehru Gandhi clan was founded by Motilal Nehru who was a self made lawyer who made it big and earned so many riches that young Jawahar could be sent to UK for study (in addition to getting the family’s laundry done in the UK).

Humayun and Akbar took the Mughal clan further and expanded to greater glory across India. These were the expansionists, the Mukesh and Anil to the earlier generations’ Dhirubhai (Babar). Akbar expanded the empire to half of India and made smart alliances to spread the Mughal influence through the rest.

For the Nehru clan, we had Jawaharlal who became the top freedom fighter, right hand man of Gandhi Bapu and the left hand man of Lord Mountbatten till landing the Prime Minister’s post of India. He won elections after elections, made the Congress the top and only party across states in India in addition to setting up the modern institutions in the country – this was the time of unbridled expansion of the dynasty but in a very “deserving and able” mode.

Then we had the Jahangir and Shahjahan phase where the empire was consolidated, high noon of the dynasty when there was no challenge, the whole atmosphere and ecosystem was of and for the Mughals. The times were relatively peaceful and the Mughal mansabdari system created a powerful nobility which ran the empire for the Emperor while the bosses partied.   

This can correspond with the Indira Gandhi phase of the Nehru Gandhi clan where the dynasty was at it’s most powerful. Indira Gandhi was the zenith of her power and set up the modern day “dynasty fronting armies” that fight battles for the dynasty i.e. the media, intellectuals, the universities like JNU, the literary awards and academies which constituted the “Durbar”.  

We then have Aurangzeb who laid the seeds of downfall of the dynasty even at the height of it’s power. Despite being very able, Aurangzeb pursued intolerant policies like destroying temples, re-introducing the jazia tax on Hindus and waging endless wars with “infidels” (primarily the Marathas) which started bankrupting the empire.

For the Gandhi clan, Rajiv Gandhi played a similar role – at the height of power (400+ seats) with a strong mandate, charisma and popularity, he took gross missteps like Shah Bano, Ram temple and Bofors that started the decline. The institutions that his mother nurtured during her time started maturing and began to exert complete control on the discourse of the country  that were going to give great dividends to the dynasty despite the decline.

It took the Mughal empire 150 years to come down to the terminal state. It all started with ineffectual descendants of Aurangzeb who became more and more disconnected from the ground and started ceding control to powerful regional leaders like the Nizam, Farrukhsiyar, Sayyid brothers who started carving out their own domains. They were also beaten down by the Marathas (modern day BJP?) who rose from the West and expanded their kingdom across India. There were added troubles due to invasions by Nadir Shah (who took away the Koh-i-noor) and Ahmad Shah Abdali.

The Nehru Gandhi clan had their own share of troubles as they lost power, had non dynasts occupy power, NDA come to power (1998 to 2004) before grabbing power through Manmohan Singh but never being in power themselves because of the ineffectual nature of the descendants (Rahul and Priyanka).

In the end, with the advent of the British, the realm of the last Mughal “Emperor” remained to that of Delhi – hence the saying “Sultanat-e-Shah Alam, Az Dilli ta Palam” which means the kingdom of Sultan Shah Alam is from Delhi to Palam. Bahadur Shah Zafar was the last king who had scores of relatives and hangers on who used to praise him every day and raise his ego to the sky as he stayed busy with poetry and arts while his kingdom was snatched from him.

The Nehru Gandhi clan is now in a similar predicament. It did not take 150 years for this situation to arise for them since this is democracy and the people do have a say in matters now as against the monarchical ages where the sword could be wielded. We are witnessing the last ineffectual dynast who is not capable at all. The adversaries have taken over most of the states in the country and the main adversary (BJP) has captured most of the country from them. The situation is dire…yet, one light shines brightly (and with a last gasp) for them…Delhi.

Delhi stands with the Gandhi clan – the Lutyens media, the star journalists, the academics and intellectuals and the elite universities are part of this Delhi. They dominate the airwaves, they project images to the world that magnify the message 20 fold and thus give a projection of invincibility to the dynasty. As we have noticed in the last few years – every story emanates from the Delhi ecosystem – JNU, Rohith Vemula, Una, Dadri, award wapasi, Gurmeher and many more.

The Delhi  ecosystem picks an issue and spins it into a big yarn projecting it as if these are national issues. Viewers within the country and outside think that is the nation and it’s concern – it worked initially but over a period, the common folk have seen through the game. The dynasty has also begun to believe that these are the main issues that matter (hence the folly of standing with the Azaadi gang) while the ground beneath their feet has completely shifted. The dynasty is in power in a handful of states while majority of the states are either ruled by the BJP or regional parties.

In the end, what remains with the Nehru Gandhi dynasty is Delhi and it’s own echo chamber just like it was for Bahadur Shah Zafar. Of course there will be noise in the coming few years as the dynasty fades away since their loyalists still remain in Delhi – recent example being the EVM tampering issue. However – make no mistake – this will be noise only with lot of flash – the ground has shifted and the end is coming.

To conclude, history repeats itself – sometimes as tragedy and sometimes as farce. Patterns are always the same and for the dynasty…what remains is “Delhi Hi Ast”….

New series starting - Lassi with Lola Liberal

Hello all,

     We start a new series shortly. Meet Lola Liberal - she was my college mate. Highly intelligent, beautiful, confident and modern. Also very successful and jet setting. She had a soft corner for me back then (in my more handsome avataar) and has since kept in touch. We have been meeting ever since and have engaging conversations over lassi (which she loves for some quaint reason - unlike the usual mojitos and tequilas she is used to). She is a "liberal" and has a natural angst against the "cow guys" (as she calls them) i.e. RSS/BJP and that makes for some great debates. She was also a Barkha fan like everyone else but is slowly developing doubts due to my persistent "Bhakt" arguments. She gets agitated over the latest NDTV+ attack on PM Modi and invariably calls me for a lassi. The series is about our conversation on the "outrage of the day" - hope you will enjoy it and follow it on my blog.

- A

Modi and Muslims..a perspective from the UAE visit - Minhaz Merchant

Minhaz Merchant hits it bingo in this column...contrary to what minorities think...Modi is the true "savior" of Muslims..

http://www.dailyo.in/politics/modi-in-uae-muslims-bjp-government-islamic-middle-east/story/1/5720.html

PM Modi's UAE visit - a strategically important area for India and Indians - an account from Zafar Sareshwala

Zafar Sareshwala's column on PM Modi's visit to UAE...the biggest highlight is him visiting the migrant workers' camp...no PM has done it so far...

Key Highlights:

• A PM has visited UAE after 34 years
• UAE has surplus investment fund of trillion dollars which they are keen to invest in infra projects (as they did in Malaysia and transformed the country)
• The Sheikhs who controlled the country and the money were impressed by the "New Captain" who meant business...India is the closest investment avenue for them these days and this visit is bound to generated inflow of FDI
• 2.6 million Indians residing in the UAE. Nobody takes care of these Indians. There are Indian Diasporas across the world but these 2.6 million Indians spread across the Gulf are engaged in labour-intensive industry. No administration or no PM of a country even addresses them. Normally, high net worth individuals are given prominence.
• But Modi has had a great connect with these people when he visited their camps. This made these labourers from India very happy and euphoric. They now believe that their lot can improve because the PM of their country went to meet them.
• Modi visited the Sheikh Zayed Grand Mosque..resting place of the founder of UAE Sheikh Zayed...place was thronged by Muslims, non Muslims alike...people were chanting "Modi, Modi"...
• In the visitors' book meant for important dignitaries and heads of the State the PM wrote that 'Peace, harmony are the fundamental and core principles of Islam.'
• The notion of Modi being anti Muslim is being dispelled slowly and steadily...

http://www.rediff.com/news/column/zafar-sareshwala-what-modis-uae-visit-means/20150817.htm

Make In India working

Foxconn investing $5Bn in Maharashtra in a manufacturing facility, FDI surged by 40% from what was last year, GM investing another $1Bn, Uber another $1Bn...


http://blogs.wsj.com/briefly/2015/08/12/five-things-that-show-modis-make-in-india-campaign-is-working/?utm_source=Offstumped_Report&utm_medium=Offstumped_Report&utm_term=Offstumped_Report&utm_campaign=Offstumped_Report

Back with a whimper

After a long, long hiatus of more than 5 years...back to writing here...the action moves from Facebook to here. 

Wide Angle 50 - How an Economy grows and why it crashes - Part 2

  Continuing the story of Usonia. Before that, the minor matter of having completed 50 wide angles – self pat on back. Last time, we saw how Usonia was all out of fish in their reserves and it was becoming impossible to match the value of the Fish Reserve notes (FRN) to actual fish since there were none left.

Sinopia to the rescue:

                The Fed was out of fish and the senators and current chief Lindy B met to discuss the way forward, some senators suggested they tell the truth to the islanders which was obviously not accepted. Lindy asked the brilliant economist Ben Barnacle to take over at the bank. Ben suggested inspiring confidence among the citizens by spending more FRNs so that they could start spending again – if needed, they could drop FRNs from palm trees. No one could figure out how to spend more when the problem rose from spending too much but they all kept quiet since they didn’t have Ben’s economic training. Fate intervened though, one of the island’s ambassadors from a far flung island called Sinopia brought some strange looking people with him.

                In Sinopia, the citizens still fished entirely by hand and they were ruled by an all-powerful king. In Sinopia, all citizens were required to fish but their catch did not belong to them. Instead, the fish were turned over to the king who then decided which subjects deserved how much. In this system, the king and his court dined on ocean delicacies while the average Sinopian got by on half fish per day. Much like Usonia before the first development of capital, Sinopia had no savings, no credit and no business. From the Usonian perspective, the Sinopian economy was stuck in the dark ages.

                What the Sinopian king had decided was that since the Usonian economy was prosperous he wanted the same level for his island. He also concluded that since the FRNs were used as money across the ocean by all so possessing them was a good thing. The Sinopian ambassador offered fresh fish in return for FRNs to the Usonians. The senators were overjoyed and the deal was struck. On asked by the ambassador whether the FRNs would always have real fish to back them, Lindy assured him, “Just look around, do you think we are short of fish?”

                The deal went ahead, each day, fresh fish filled canoes came from Sinopia which were exchanged for canoes filled with FRNs. The technicians of Usonia used these fish to replenish the Fish reserves at the bank and use them to prop up the currency. The Sinopian king did not know what to do with the FRNs so he decided to order the nets that Usonian manufacturers made so well to improve the efficiency of the Sinopian fishing. The rest of FRNs which was essentially trade surplus he left in the Fish Reserve Bank since Sinopia did not have a banking system.

                The transactions brought a boom to Usonia because of the foreign demand as well as deposits of Sinopian fish swelled the availability of credit. Even though the Usonians were spending more than they saved, there was still plenty of fish available to lend at low rates of interest. With plenty of real fish to add meat to bones of official fish, Usonia’s problem of fish-flation disappeared. With plumper fish, prices stopped rising and living standards rose again.

                The Sinopian king also added some incentive to his people so that they would keep fishing – those who purchased nets from the king could keep all the extra fish they caught. This resulted in an increase in the Sinopians’ daily fishing activities. They accumulated savings and expanded production. As a result, Sinopian entrepreneurs were now able to build factories to make other goods like spoons and bowls. Even though most Sinopians still lacked these things, they sold these goods back to Usoina for more Fish Reserve notes.

Service Sector steps up:

                The influx of Sinopian savings pushed down interest rates and the Usonian entrepreneurs came for loans for companies that required local workers to deliver a service since these jobs could not be outsourced and were less capital intensive. Celebrating this, Ben Barnacle explained that the Usonian economy had developed to the point where the lowly process of fishing and production could be relegated to poorer economies leaving Usonians free to pursue more sophisticated service sector jobs like chefs, storytellers, tattoo artists and the like. Evidence of this was the descendants of Charile who opened Surfing universities across the island striking a deal with Sinopian producers to manufacture the boards there. The activities like surfboard design and surfing instruction remained at home.

                The Usonians were now specializing in consumption while Sinopians were striving hard to work and save for a better future where they could stop fishing and live off the FRNs. Ben Barnacle theorized this by saying that Usonia had a comparative advantage at consuming and this was a great benefit to the entire ocean. The optimistic, can-do spirit of Usonia meant that their citizens never feared to spend as a result other islands could outsource consumption to Usonia. On the flip side, he explained that the Sinopians were considered best at generating savings and manufacturing products. Therefore it was more efficient to outsource production to Sinopia.

Fish Window closed:

                The other islands began to get wary of the acceptance of FRNs which was enhancing Usonia’s economic powers especially Bongobia. Chuck DeBongo, the charismatic leader of Bongobia started to send more and more of his financial agents to the bank’s fish window to exchange his notes for real fish. When those withdrawals started to make a real impact on the fish reserves, official fish started to become smaller again and fishflation came back. To prevent this, close the bank’s fish window to foreign depositors. From now on, the value of FRNS on the international market would be determined by what someone was prepared to trade for them, not because they could be redeemed for fish. In truth, the notes’ value would hang on Usonia’s status as a great economic and military power.

                This caused some flutter among islands who started to sell of FRNs but since the FRNs were a favoured mode of transactions across the ocean, the fall stabilized. The currency crisis was over, fishflation was under wraps and FRNs maintaining their status despite closing of the fish window, the Usonian economy settled down. A few years later, a boost to prosperity was provided by election of Roughy Redfish to senator-in-chief. He lowered taxes, rolled back burdensome regulations on business and reduced trade barriers. However, he failed to reduce government spending – the gap between what Senate spent and what it raised in taxes continued to grow.

Hut glut:

                We now enter familiar and recent territory. For generations, owning a hut was considered a dream on the island and people bought huts after saving for a lifetime paying cold, hard fish. Over time, banks started making hut loans to the island’s more secure borrowers. These loans had an underlying security which was the hut itself, if the buyer could not pay back, the hut could be sold. Some islanders resented the fact that access to hut loans was so unequal. The wealthy usually got loans easily while those who had no savings or poor credit were being denied. Sensing a potent campaign issue, the Senate got into action.

                Senator Cliff Codd argued that hut ownership was at the core of the Usonian dream and he mandated creation of two agencies – Finnie Mae and Fishy Mac to buy hut loans from the bank. These loans would be ultra low interest and with little down payments. The hut buyer would then pay back the agencies directly. The bank would immediately get back its money which it would use to make new loans and be rewarded a generous fee. With the Senate guarantees in place, the bank dropped interest rates as it no longer needed extra revenue to protect from default.

                Another agency, Sushi Mae was devised to underwrite loans for youngsters wishing to enrol in surfing school. With easy access to Sushi Mae loans, tuition fees were increased aggressively without worrying about pricing its customer off the market. Soon, tuitions began rising much faster than the overall rate of fishflation. Most economists assumed that the higher prices were reflective of the increased social value of a surfing degree. In a few years, surfing school tuition became one of life’s most daunting costs.

                Due to low interest rates, demand for huts rose astronomically and the peripheral industries like hut decoration etc. grew too. So did prices of huts and this resulted in a hut glut. Everyone hailed this as a revolution and a period of tremendous economic boom  followed with the huts at the core of the whole mania.

Hut rut:

                Even more familiar and more recent territory. One particular luxurious hut complex called Crater View condos went unsold because of high prices. Suddenly, everyone began to sell which resulted in an over supply of huts in the market and prices plummeted. Finnie and Fishy crashed leaving a pile of useless loans. The senators and chief George Bass and then Barry Ocuda tried to raise customer confidence by providing stimulus packages – they wanted to get customers spending again buying houses in fear that falling prices would mean a deteriorating economy. This of course did not work because the prices were beyond anyone’s reach and hence no one was buying, however more incentives were given to buy. In addition, Ocuda decided to transform the economy by adopting Llama based carts (which were thought to be less polluting) and re-laying the paths across the islands for Llamas to boost the economy. Nothing worked and the economy remained in a rut.

Sinopia wises up:

                Sinopians were still working very hard and producing things and savings but they barely had a life. The Sinopian king was made to realize this by a simple farmer – why not use the goods we make and fish we create and trade them inside the island thus satisfying our own needs instead of going after worthless FRNs. The value of FRNs was only because of Sinopian fish and they had made the products too so all they had to do was trade their goods for real fish.  The king agreed and decided to stop trading fish with FRNs.

Fish hit the fan:

                As the fish supply dried up, fishflation came back and when the fish disappeared from vaults, the island returned from where it had started  -  no savings, no credit, no investment. The senators were arguing on how to stimulate the economy but no one had an answer what they could stimulate it with. Suddenly, they saw Sinopian ships coming towards the island. Everyone was overjoyed that the Sinopian fish were now available but what the Sinopians simply did was bought everything on the island with their FRNS and real fish. Since no one on Usonia had any real fish, the Sinopians could outbid everyone, while leaving they left behind the worthless FRNs.

                The senators surveyed the devastation and wondered where it had gone wrong. They had spent so why did the economy not grow. Finally, it dawned on them, it was simpler than they thought. Addressing the population still looking for answers, Senator Ocuda uttered the most honest words any politician could say ,”Does anybody here remember how to make a net? I think it is time we all went fishing.”

Analysis:

                This Wide Angle was not meant for my own thoughts since the story itself says so much. However a few parting thoughts – an economy is quite similar to a home. You cannot spend more than you make. You can only spend inside what you earn. You save and then invest thus improving what you do and also to earn more and pave for a better future. That is the same for a country. Governments often get into trouble by spending more than they have. When the gaps get too big, difficult choices arise.

                One is to increase revenue by raising taxes, which is quite unpopular. Another option is to cut government spending like subsidies, bad loans, expenditure on salaries etc. Politically, this is more difficult than raising taxes since no government wants to give things up and the affected parties vote. To avoid these unpopular options, governments choose to default i.e. tells its creditors that it cannot pay the full debt. The fourth and often favoured option is to inflate money i.e. simply printing more notes that pays the creditors but what they get is not worth much. Inflation is simply a means to transfer wealth from anyone who has savings in a particular currency to anyone who has debt in the same currency.

                Another peculiar problem for the US is that its citizens are not saving but taking loans – the savings are being done in developing countries like China and India. The reserve status of the dollar is basically helping keep this imbalance of trade afloat. Like it happened in Usonia, this arrangement is going to break some day and the resulting crash will be devastating – it started in 2008 but the stimulus provided by the administrations has delayed the pain.

                Closer home, we never had  good policies to begin with because of the whole emotional, socialist, left ward political management of the economy. There was brief hope from 1992 to 2004 when successive governments committed themselves to fiscal discipline, disinvestment and reducing subsidies. However with the “aam aadmi” government back, we have seen the worst of economic decisions like NREGA, loan waivers to farmers and almost no reform. What we are seeing is results of that mismanagement, inflation rate nearing two digit (remember inflation was at 3% around 2003-2004) and economic problems for everyone. The sad fact of India is that these things are not even remotely close to discussion in anyone’s minds, they should be because it is your taxes and economic potential that is being mismanaged and it will bite you in one way or other in the future – in the past, one had Western countries to escape to, that may not be such a great option anymore since they are in a Usonia like situation themselves.

                Finally, the voice of the free market advocate is generally a lone cry in the dark since despite being simple, these concepts are technical and more difficult to grasp than emotional statements like “there should be no poverty, garibi hatao” or “aam aadmi ko kya mila”. This book and this column are representations of that lone cry, hope someone hears it.