#128 Where The Clear Stream Of Reason.. 🎧

While excellent newsletters on specific themes within public policy already exist, this thought letter is about frameworks, mental models, and key ideas that will hopefully help you think about any public policy problem in imaginative ways.

Audio narration by Ad-Auris.  

India Policy Watch #1: Jabki Dimaag Khaali Hai (While The Mind Is Empty) 

Insights on burning policy issues in India

- RSJ

The sound and the fury surrounding all that’s happening in India now is quite maddening. Any kind of meaningful analysis risks drowning in it. In any case, there’s no analysis possible any more in India. There are only positions. We have fallen in love with the culture of intellectual nihilism. All arguments start with a bad faith assumption. And before you end it, you are tagged with toxic monikers and a litany of half-truths in the garb of whatboutery. And they bookend any discussion between two ‘argumentative’ Indians these days.

We cannot say we didn’t see it coming. It is easy to cast democracy into a vessel that channels the passions of the majority. You can ride those passions to the levers of power. But it is another thing to govern and meet the aspirations of the demos. The easy way then to cover for failures is to continue fighting some mythical ancient regime or entrenched enemies who are undermining your efforts. This is imagined victimhood. When this becomes a political, social and cultural defence to any challenge, intellectual nihilism follows.

Facts don’t matter then. Only faith does.

We are in a tight spot today. To come out of it requires leadership, farsighted policymaking capabilities and a consensus on the path to nation building almost at par with the task we had on hands right after independence. This isn’t easy even with the best of intentions and capabilities at your disposal. Instead, I fear we have real constraints in thinking our way clearly through this.

Acknowledging The Problem

The economy wasn’t in a great shape going into the pandemic in April 2020. The twin balance sheet problem and the shock of demonetisation meant a modest 4-5 percent growth was beginning to look the best we could do. The national lockdown and the impact of the first wave has meant we will end up with about an eight percent decline in GDP in FY20-21. The general consensus within the government early this year was India had seen off the pandemic and a V-shaped recovery is well on its way. This second wave has set us back again. So, where does that leave us on the economy? There are a few factors to consider here:

* Unlike wave 1, this time the impact has been felt more directly by the consuming class. This is evident from conversations with friends and colleagues, social media posts and the case counts. People have been scarred and sentiments have taken a hit. More importantly, people will wait to get vaccinated before lowering their guards. The lessons of complacency seem to have been learnt. The talk of wave 3 and its likely impact on kids have only queered the pitch. Vaccination to about 50 percent of people looks unlikely before the end of 2021. This would mean when the wave 2 subsides, there won’t be a quick bounce back in terms of increased mobility and consumption spends. There will only be a gradual return to any kind of normalcy.

* Unlike last wave, this wave has impacted the hinterland. The extent of the impact is difficult to ascertain but the ground reporting from rural UP and Bihar has been heartbreaking. Rural supply chains have been disrupted and the expectation that rural economy will hold out like last year are misplaced.

* Much of the heavy lifting last year to support the economy was done by the RBI through monetary policy. There’s a limit to that and it seems we have reached the end of it. The fiscal room available to the government is quite limited. It is worse than last year. The fiscal deficit is the highest it has been in a long time. Yet, the government will have to come out with some kind of a stimulus soon. People are hurting. But where will the money for stimulus come from? Expect more headline management like the Rs. 20 lac crores Aatmanirbhar Bharat package announced last year.

* Exports could be a silver lining considering most of the developed world will be back on growth path by next quarter. The challenge is how well are our businesses (especially SMEs) positioned right now to take advantage of it. It is difficult to be an export powerhouse while simultaneously dealing with an unprecedented health crisis impacting the workforce.

* The consensus growth projections for FY21-22 have already been lowered from 11.5 percent to 9-9.5 percent. My fear is this will slide down to 7-7.5 percent range by the time we have seen through wave 2. Since this wave is unique to India in terms of spread and impact, our economic performance, deficit and the future prospects will be an outlier compared to most of the world in FY22. We will have to keep an eye on the sovereign rating given our circumstances. There’s a danger lurking there.

Given these, it is evident we will need to bring together our best minds across government, administration and industry to navigate these waters. But that will require to acknowledge we got things wrong to reach here. This isn’t likely going by precedence. It will also be interesting to see how Indian industry and capital responds to this. Of course, the public stance, like always, will be cheerleading the dispensation. But it is no secret that private capital investment has been stagnant for most of last decade. Indian capital doesn’t put its money where its mouth is. It is far too clever for that. As 4-6 percent growth (if that) becomes the accepted norm for this decade, it is likely that Indian industry and the wealthy will try and conserve what they have instead of taking risks. There are other second order social implications that might arise out of another ‘lost decade’ of tepid growth that Indian capital will be worried about. They might continue to prefer a ‘strong leader’ given these concerns.

It is also clear now that any recovery will be K-shaped to begin with. The formal, organised and larger players will consolidate their gains and grow at the expense of the informal and smaller players. This trend has been seen over the past 12 months. The stock market, divorced from the real economy, already knows it and it is reflected in the performance of the benchmark indices that represent 30-50 top companies. This structural shift to an oligopoly in most sectors is evident. This will allow the state to control capital more easily as markets turn less free. In any case, the benefits of aligning to the political dispensation are already evident in the list of richest Asians. So, the industry will be more than willing to be subservient. These aren’t the best of conditions for releasing the animal spirits of enterprise.

The Absent Media And Opposition

It isn’t difficult to foresee the challenges outlined here and to set up a policy framework to address it. There are two problems here. First, the centralised nature of governance in the current establishment precludes any acknowledgement of missteps or an honest assessment of the problems on hand. Second, the conventional outlets of holding the government to account, the opposition and the media, are mostly absent. Large sections of mainstream media are owned directly by the industry who would rather cheerlead than ask tough questions. Many in the industry and the media may even be ideologically aligned to the establishment. The opposition is fragmented with regional leaders often holding their own in the assembly elections. But any kind of national mobilisation to politically counter the party in power is not in sight. The PM continues to be popular despite the wave 2 failings. The political genius of the PM has been to dissolve the natural fragments of region, caste, or even, language, that precluded over-centralisation of power in the past. The Lok Sabha elections will continue to be presidential in nature for the foreseeable future. So, any real political opposition will need to contend with this.

The other source of opposition, class, has disappeared from Indian politics for long. Students’ unions are politicised along party lines and have no independent line of thinking, trade unions have no teeth and farmers movement is splintered despite the protests we see against farm laws.

The near absence of media and opposition has meant policy debates and discussions have suffered. There’s complacency and lack of rigour in policy making as has been evident in the past many years. There is no price to be paid for policy failure. And any failure is quickly papered over with some kind of narrative.

The Surrender Of Elites

Lastly, let’s turn to the elites. The section that often tends to have a disproportionate share of voice in the polity. The institutional elite have either been co-opted or they have thrown in the towel in the face of an overwhelmingly popular establishment. Universities, courts, bureaucracy, police and what’s referred to as civil society can no longer be counted on to be independent voices that will uphold the tradition of the institutions they serve. This isn’t a first in our history. But, remember, the last time it happened the consequences were terrible. That should, therefore, give us no solace.

The other set of elites are those who have provided intellectual scaffolding to this dispensation over the years. Loosely put, this group would identify themselves ideologically as either conservatives or belonging to the right. I have articulated their grouses in earlier editions. It runs the spectrum - the resentment with a liberal constitution that was not rooted in our civilisational values, the anger at the radical act of forgetting our history that the Nehruvian elites thrust upon us in their wisdom, the overbearing state and the failures of leftist economic policies during the 60s-80s that held us back and the deracinated deep state (“Lutyens Delhi”) that apparently controlled the levers of power regardless of who was in power.

In the past seven years it should have been clear to them these grouses aren’t easy to set right nor will their elimination lead to any kind of great reawakening in the masses. The intellectual articulation of a political philosophy that’s suited to the modern world while addressing these grouses isn’t clear yet. Instead, what we have on our hands are thuggish attempts at settling imaginary scores and continuing degradation of scientific temper in the hope it will usher in a modern version of our glorious past. If these intellectuals want the supposed UP model of today to be what India of tomorrow should look like, good luck with that ending well.

I have been reading the great Hindi essayist, historian and scholar, Hazari Prasad Dwivedi over the past few months. Dwivedi was an intellectual powerhouse who was deeply rooted in the Indic tradition and philosophy. A great Sanskrit linguist who spent a lifetime studying the Sastras and writing beautiful expositions on them, Dwivedi should be more widely read today. His essays, their themes and his arguments, betray no trace of western enlightenment influence. He had a clear-eyed view of the richness of our heritage and its relevance in the modern age.

In his anthology, Vichar Aur Vitark (Thoughts And Debates), there’s an essay titled ‘Jabki Dimaag Khaali Hai’ (“While The Mind Is Empty”) published by Sachitra Bharti in 1939, which is often quoted by Pratap Bhanu Mehta to make a specific point about our current obsession with our glorious past and the identity crisis among Hindus. As Mehta writes:

This identity is constituted by a paradoxical mixture of sentiments: a sense of lack, Hinduism is not sure what makes it the identity that it is; a sense of injury, the idea that Hindus have been victims of history; a sense of superiority, Hinduism as the highest achievement of spirituality and uniquely tolerant; a sense of weakness, Hindus are unable to respond to those who attack them; a sense of uncertainty, how will this tradition make its transition to modernity without denigrating its own past; and finally, a yearning for belonging, a quest for a community that can do justice to them as Hindus. This psychic baggage can express itself in many ways, sometimes benign and creative, sometimes, malign and close minded. But these burdens cast their unmistakable shadow upon modern Hindu self-reflection, often leading to a discourse on identity that Dwivedi memorably described as one, where the ‘‘heart is full and the mind empty (dil bhara hai aur dimag khali hai).’’

The passions that have been fanned to animate the majority cannot lead to nation building in the absence of intellectual rigour and clear reasoning. The problem is once that genie of passions is out, it is impossible to put it back in the bottle. Its demand will never be sated.

I will leave you with an extract from Dwivedi’s essay (my mediocre English translation follows):

My translation:

But when the mind is empty while the heart is brimming over, there cannot be any possibility of an engaging exposition of the Sastras. 

Otherwise, there isn't any reason to be anxious about a race whose writ once ran from the shores of River Vaksh in Central Asia to the end of South Asia, the imprint of whose culture transcended the Himalayas and the great oceans and whose mighty fleet once controlled the waters of the eastern seas. It is true that this mighty race is a pale shadow of itself today. The sons of Panini (the great Sanskrit grammarian from Gandhara) sell dry fruits and heeng on streets today while the descendants of Kumarjiva are involved in the basest of trades. Yet, there's a hope that there must be a semblance of that glory still running in the veins of this race. And it will show its true colour some day. But then I wonder. After all, a tree is known by the fruits it bears. The state of disrepair that the Hindu society is in today must trace its cause to that once glorious civilisation of the past. How can that tree be so glorious when its fruits we see all around today are so terrible?There was indeed an age of prosperity for this race. That is true. Those verdant streets of Ujjain, the gurgling sounds of river Shipra and the celestial music of the kinnaras still echo in the Himalayan valleys - these memories remain fresh in our minds. And amidst these riches, our eyes can clearly see the attack of the Huns and the defiant stand of the Aryans, the numerous rise and fall of empires, the thunderous roar of Vikramaditya. The glories of Magadh and Avanti were unparalleled. Its elite could wield the sword and the brush with equal felicity. They could fight fire with fire and let their hair down when they wanted. But things changed. The elite suppressed the masses; they paralysed the polity. The chasm within the society began to open up. The elites immersed themselves in the pleasures of the material world while the masses were tied down to scriptures and their orthodoxy. One took refuge in merriment while the other was often lampooned for their outdated beliefs. And the fissure in the Hindu society widened further. Over the centuries every invader used this to their advantage - Huns, Sakas, Tartars, Muslims and the British. They divided us further and they ruled. Today that Pathan dry fruit seller asked me if that beautiful house belonged to a Muslim or a Christian and could scarcely believe it could be that of a Hindu. And I wondered if the chasm continues widening everyday. But then the Sastras don't bother about such identity issues of the Hindus and I lack the courage to intellectually confront this issue any further. When the mind is empty and the heart full of passion, isn't it enough to have even mentally contended with the existential conundrum of our race.            

Matsyanyaaya: A Cautionary Tale on the ‘Israel Model’

Big fish eating small fish = Foreign Policy in action

— Pranay Kotasthane

Full diplomatic ties between India and Israel were established quite late in 1992. Even so, this bilateral relationship has quickly grown into a robust and multi-dimensional partnership over the last three decades. This is a welcome development.

Israel’s technological prowess finds many admirers in India. In casual conversations, this admiration often escalates into a desire for emulation — "see how they tackled terrorism, we should learn from it", or "we should also have mandatory military service, like Israel does", or "why can't India kill terrorists in Pakistan the way Israel assassinates Iranian nuclear scientists?"

The latest round of Israel-Palestine conflict should, however, force uncritical admirers of the Israel model to update their Bayesian priors.

A side note before I begin: what model Israel adopts is its own problem and I have neither the competence nor the inclination to challenge its approach. Every conflict today has its own set of initial conditions and a long and bloody path-dependent history. I am only interested cautioning people who seek to transpose Israel’s strategy to an Indian context.

Here are my four strategic insights from the Indian perspective for those in awe of the 'Israel Model'.

#1 Force alone cannot end insurgencies

Even an overwhelming superiority in force structure is insufficient for ending insurgencies. The US experience in Afghanistan and the ongoing Israel-Palestine conflict both demonstrate that insurgencies are not easy to dislodge. Neither the Iron Dome nor the ‘Mother of all Bombs’ can fully deter an insurgent force from retaliating in the future.

Force can, at best, modulate terrorism but it can't end insurgencies. Ending insurgencies also requires co-opting rival elites and making compromises with insurgent factions. More the disproportional use of force, more elusive such dealmaking becomes.

#2 Assassinating terrorists can be both ineffective and high-cost

Fed on a diet of Hollywood movies, the assassination programmes of Mossad and Shin Bet are admired by many people in India. Every terrorist attack in India raises one question: if Israel can kill Iranian nuclear scientists, why can’t India kill the likes of Hafiz Saeed?

This romanticisation of an extensive assassination programme misses the fact that such operations have often been strategically ineffective. Praveen Swami’s take in MoneyControl on Israel’s assassination programme highlights this point well:

“From 1971, when a new Palestinian resistance emerged in the West Bank and Gaza, both targeted assassination and sometimes-indiscriminate civilian killing were deployed on a growing scale. Forty-man covert assassination squads, code-named Rimon, or Pomegranate received target lists from Israel’s internal intelligence service, Shin Bet for execution.

The killings formed the backdrop to the rise of terrorism, culminating in the savage massacre of Israeli Olympic athletes in Munich in 1972. Mossad responded by unleashing Operation Wrath of God—arguably the best known of all its efforts—which, over the course of twenty years, used covert teams to target their alleged killers across Europe and the Middle-East.

Leaving ethics aside, the gains from Israel’s tactics are controversial: Rimon’s killings didn’t deter the outbreak of the First Intifada in 1987; indeed, it could be argued to have radicalised an entire generation. Even leadership-decapitation operations, like the 1988 assassination of Palestine Liberation Organisation second-in-command Khalil al-Wazir, did little to change the course of history. Arguably, Israel’s anti-PLO operations only served to open the way for more dangerous Islamist groups.”

Another unintended and yet anticipated consequence of such an approach is the potential of domestic spillover. If a State repeatedly uses assassination against State enemies, how long before it becomes an acceptable method against domestic anti-national ‘enemies’ ?

A key cognitive dissonance is at the centre of democratic statecraft — in the amoral world of international relations, the grammar of power applies while in a liberal domestic realm, rule of law explicitly restrains the primacy of power. This delicate balance is tougher to achieve in a State with an extensive assassination programme. A secondary consequence is that conflicting parties become incapable of compromise and dialogue and resort to acts that further aggravate the situation.

#3 People matter more than territory

The Israel-Palestine conflict is a visceral conflict over a piece of land. Such is its history and deep-seated animosity that today, even localised fights over pieces of neighbourhood land have the potential to trigger a full-scale arms exchange. The lesson for India is that the desire for territorial integrity should not override the primary goal of peace and prosperity for all Indians. Take the instance of India’s land border with Bangladesh. In the 2015 Land Boundary Agreement, India gave away more land than it got back from Bangladesh. In a strict sense, India’s territorial integrity was violated. And yet, it was a prudent decision because, among other things, it put an end to the abomination called a third-order enclave — a piece of India within a piece of Bangladesh within a piece of India within Bangladesh. The hitherto uncertainty over the border had led to a denial of basic services to Indians in such enclaves.

#4 Excessive use of force is counterproductive in the Information Age

Despite its clout, the international narrative has gone against Israel over the past month. International coverage has portrayed Israel as the aggressor. The armed attacks by Israel were broadcasted widely and the bloodied faces of Palestinians led many countries to pressurise Israel for a ceasefire.

The key lesson here for India is that information age conflicts will be global by default. In the Industrial Age, state suppression could be covered up; that’s no longer the case in radically networked communities. State use of force against non-combatants is almost certain to receive instant condemnation from other countries. This further calls for prudence in using force.

In sum, there’s a lot to be gained for both sides from a stronger India-Israel partnership. But a blindfolded emulation of the Israel Model will do far more harm than good.

India Policy Watch #2: Vaccine Inequity 

Insights on burning policy issues in India

- Pranay Kotasthane

Vaccine inequity — you are going to be hearing a lot of over the next few months. It is a hydra-headed term being used in a variety of contexts — some make sense and others don’t. Let’s explore all its facets.

#1 Vaccine inequity in the international relations context

Canada, UK, EU and other rich countries are hoarding vaccines for its citizens. Citing inequity, repeated calls have been made by concerned citizens, groups, and WHO for releasing these hoarded doses.

However, equity is orthogonal to the amoral world of international relations. Equity presupposes morality but when the international relations operates on the principle of matsysnaaya, every country is on its own. Calls for vaccine equity then may well make some countries donate a few token doses from their hoarded stock to ward off future criticism but it is unlikely to cause a significant shift in national stances.

Instead of asking for vaccine equity, appealing to national interest will work better. At present, India is perhaps not in a position to cause pain to a state that doesn’t offload its excess supply. But it can definitely promise to deliver benefits to countries that do. A lowering of tariffs on some goods or conceding on a less-important point in a trade negotiation in exchange of vaccine donations, has higher chances of securing vaccines from abroad.

#2 Inter-state vaccine inequity

State-wise allocations have also come under fire on the grounds of vaccine inequity. This is not surprising. Neither is it solvable to everyone’s satisfaction. The paradox of distribution, in Deborah Stone’s words, is that “equality often means inequality, and equal treatment often means unequal treatment. The same distribution may look equal or unequal, depending on where you focus.”

Till there’s supply scarcity, equalising distribution across states is impossible. Regardless of the formula used, it will be contested on the ground of being unequal by states that don’t fare well on a particular formula.

In such a case, the goal should be distribute fairly and not equally. In the current circumstances, the fairest way out is to transparently declare a formula for distribution of vaccines from the union government quota and simultaneously allow states to procure additional doses on their own.

#3 Digitally inflicted vaccine inequity

Getting a vaccine appointment requires you to have a phone, an internet connection, and the ability to read English, and that this is unfair to people who have access to none of them. This is the vaccine equity dimension I sympathise with most.

The CEO of the National Health Authority dismissed these concerns in an Indian Express article thus:

“Imagine the chaos if online appointments had not been compulsory. Vaccination centres would have been swamped by people, creating not only law-and-order issues but also risk of infections. Invoking the digital divide, as the authors do, is premature and misplaced, for the vaccination drive is evolving as it unfolds, and data is the torchlight for correcting the anomalies.”

“CoWin provides for on-site registration of people without access to the internet, smartphones or even a feature phone. Out of the 18.22 crore doses administered as on May 16, only 43 per cent have been administered through online appointments, the rest availed of on-site registration. Self-registration is just one component of CoWin. On-the-spot registration, walk-ins, registration of four citizens on one mobile number and use of common service centres for assisted registration underline the inclusive nature of CoWin.”

Of course, what he hasn’t mentioned is that walk-in registration and appointment is not available for 18-44 age group. It would be fair if a predetermined percentage of vaccine slots are opened up for walk-in registrations. Even cinema halls allows on-spot movie ticket bookings in addition to the online-booked ones; surely our COVID-19 vaccination drive can accommodate for this requirement. Further, some centres can be dedicated for walk-in registrations.

As the supply constraint eases, this problem should become less serious.

#4 Income inflicted vaccine inequity

The argument here is that since the rich, formally employed citizens can get themselves vaccinated through their employers, the employers must in turn vaccinate low-income earners for equity reasons.

This is a flawed argument. A government-run channel providing free vaccines is a better alternative. Mandating the private sector to cover up whenever the government fails is morally repugnant. It is precisely the kind of thinking that has allowed us to give our omni-absent state a free pass.

A reminder to end this section. Given that vaccines have positive externalities, the primary goal of the vaccination drive should be to give jabs to as many people as soon as possible. Doing so in a fair and transparent way is the best that can be done for equity. To prioritise equity over speed would be counterproductive. The option is to choose between two suboptimal outcomes. After all, confronting trade-offs is the what separates better policymaking from the worse one.

HomeWork

Reading and listening recommendations on public policy matters

* [Audio] Dr. Rajendra Prasad Memorial Lectures series, 1969: Acharya Hazari Prasad Dwivedi on Guru Nanak: Personality, Concerns and Objective. Wonderful speech combining history and philosophy.

* [Article] An excerpt from a promising new book on ending counterinsurgencies.

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