Mysticism and Rituals

One of the conflicts in my mind that I have struggled with is spiritualism, mysticism as compared to rituals. Hence when I came across this book on life of Shankaracharya and his philosophy at Chinmaya Mission, I grabbed it. For here was a person who conceptualized Advaita Vedanta and promoted while simultaneously setting up temples and encouraging common man to practice rituals.  The biggest contradiction being that while as per Advaita Vedanta God is within us. The rituals prescribed in Vedas and Sanatan Dharma were about worshipping or keeping God(s) happy, in other words, God was outside of a person. The idea of God being external was so entrenched that even Ramanuja, was uncomfortable with it and proposed qualified Advaita Vedanta there by separating Brahman into Nar and Narayan.

Advaita sets a person on a spiritual journey of finding oneself. Just like philosopher Hegel said that God is journey of self-determination. According to Adi Shankaracharya, our consciousness gets veiled by adhyasa and agyan.  Adhyasa is super-imposition of other aspects such as body, mind of thoughts in our definition of self or I. When we meditate, we can observe our body and our thoughts. That consciousness is Brahman. Agyan is ignorance or our beliefs arising from our biases and emotions. We seek motivations in what is being said. Care more about who has said it rather than what is being said. We develop causal relationships based on our beliefs. All these are nothing but illusions. Even Garuda Puran says, that our relationships here are meaningless for in the larger scheme of things, we are all the same. A father and son in this world are equals in the after world.

Adi Shankaracharya realized that not everyone wants to embark on this journey of Self-discovery. Most people are too busy earning livelihood, taking care of their parents, kids, friends and relations.  Shankaracharya realized that rituals brought self-discipline and also reinforced the belief that God is approachable. That such persons can achieve liberation by being a good person. A person who is on spiritual journey does not need this assurance. He saw following rituals or devotion to God as first step in journey of spirituality. Today of course, we realize that this may not be true. Today the words have become more important than the spirit. It was rituals that excluded a section of society from worshipping in temples or from reading Vedas. If we really have to bring Amrut Kaal in India, we have to go easy on rituals and go high on spirituality.  

What game do your managers play? Cricket or Football ?

Tags

Agile Technology, Learning Organizations

Corporates of 90s play cricket and corporates of 2020 play football.

Cricket and Football, both are team games but are as different as Chalk and Cheese.

A Cricket team is collection of specialized skills, like bowling, batting or keeping wickets besides some general skills that everyone has, e.g. fielding and throwing a ball. Every player has a role and performs within the parameters set for it, to the best of his/her ability. For example, a bowler gets freedom to decide his field placing and how he would bowl. The captain has a key role and takes most of the decisions such as batting order, bowling changes and field placings. A captain who follows participative management style, may discuss with couple of his team mates, his seniors or his peers. Most members of the team may have some or limited say during team meetings when they may discuss strategies for various batsmen or bowlers. That is also a function of culture in the team. In some cases, only seniors join the discussions. Cricket also has different rewards, man of the match/tournament, batsman of the match/tournament or bowler of the match/tournament.

Football is a very different game. Most players have the basic skills related to ball control and passing such as dribbling. There are players who might have additional skills. Like cricket, football also has different roles such as goal keeper, striker, defender etc. but unlike cricket, the players often change their positions and take on different roles as per the need of the game. A striker may fall back to defend or in extreme situation, a goal keeper may go upfront to score a goal. Interesting thing is that in football, the captain does not direct or no one asks a captain before switching his role. There is fluidity and positions and roles change as per the need of the game. This is not to say, that the team does not meet prior to the game and has no strategy, but the strategy and tactics evolve or change during the game based on response from the opponent team. Football does not has individual rewards. Either the team wins or loses. Players may get rated for their performance, but there are no rewards for extraordinary performances or punishments for blunders. The biggest shame is facing your team or fans. It is collective win or loss. While a captain may get credit for win or blame for losing a match in Cricket, captains hardly find a mention in win or defeat in football. It is the coaches who are feted or blamed.

Corporate teams in 90s resembled cricket teams. People were drawn from different functional areas. Each person specialized in an area of knowledge. The team members were expected to contribute based on their knowledge and skill sets. The performance appraisal was that of individual with performance in the team as one of the criteria, it had no relationship with performance of the team as a whole. 

Football is very different. Every player understands the purpose of the team and has all information of the match. The person is able to take his own decisions and responds to the situation.  The business environment today resembles a football team. With advances in information technology, the information exchange is very fast and information asymmetry is minimal. The companies tend to lose any strategic advantage due to its innovations or strategic initiatives within a quarter or two. Market rewards companies that are nimble, responsive and can respond to tactical opportunities, like a football (https://rajneeshrastogi.wordpress.com/2017/02/26/what-corporate-managers-can-learn-from-football-teams/) .

The idea of structuring organizations and rewarding individuals is deeply ingrained. Unfortunately, most of the organizations have not been able to develop a culture of collaboration and cooperation and achieve the levels as seen in football. Besides appraisals systems, the organizations would have to change their work processes to empower teams that lead themselves ( https://rajneeshrastogi.wordpress.com/2017/03/18/building-football-teams-at-work/)

Cricket or football, whatever your game is, give it your best and enjoy.

How to determine if real estate is over-priced?

Real Estate in India has had a very long bull run in India. Some people feel it is high priced other feel it is still undervalued.

Two indicators that can be used to determine this are 1) Price to Rental Ratio and 2) Demand Supply gap, 3) Spread between buy and sell rates for the same property and 4) Return from real estate sector vis a vis other investments.

Price to rental ratio is a good indicator to gauge valuations in real estate irrespective of nature of property. This is somewhat similar to price to earnings ratio in stock market. Higher price to earnings ratio means that the company’s returns are lower vis a vis a price. A higher ratio would be sustainable only if the company grows at a high rate and delivers higher earnings in future. A higher price to rental ratio would indicate the same. If a property has a rental to price ratio of 3%, then it would have to deliver another 2-3 percent in capital appreciation or price appreciation to match returns of Fixed Deposits.

Capital appreciation is a function of demand and supply gap. In a country like India, demand supply gap varies for different cities or geographies and for different segments within a geography. The demand may not only be a function of demand for use but could also come from demand for investment which could arise due to excess liquidity, under-valuation. Real estate for a long time was also favourite of investors. Easy liquidity may also create asset bubbles.

Another indicator for stability of the market could be the difference in purchase and selling price. Taking stock market as an example, there was a time when market had “jobbers”. The role of jobber was to provide both buy and sell quote for a scrip. The difference between the quotes indicated stability of the market and turnover of stock. Higher the turnover and stability, lower was the difference between buy and sell quotes. Lower the turnover, higher was the difference. Some of the cities under Delhi NCR reflect the same where brokers provide two very different quotes for the same property.

The third and final angle for triangulation is to remember that real estate is also an asset class and just like other asset classes. It cannot beat the market consistently. Over a period of time, all asset prices end up giving similar kind of returns especially after adjustment for risk. Some of the assets like real estate and gold may not show high fluctuations, unlike stock markets. A comparison of returns across financial assets also gives us a good idea about how much returns can we expect from an asset class over the years. Real estate is no exception. Please see the charts below to see returns from different asset classes in US and India.

If we draw similar chart for India, Equity has given returns of 17%, with real estate at 15%. The bonds and Gold have returned lesser returns than both these asset classes.

We can use Noida as an example to see how we can use the above triangulation points.

If we look at residential sector in Noida. The land prices peaked around 2014-15. At that time, the price to rental ratio was more than 50 years (ranging from 50-55 years, depending on sector). The prices have come down around 30% of the peak rates. The flats have seen marginal increase in rates.

At current prices, Noida has a price to rental ratio of around 45% with the rental income ranging from 1.5-2.5% in the city. With banks offering FD rates of around 6%, either the rentals should increase to that level or rental returns should be supplemented with increase of prices. The price increase should be more than 3.5%.

If we look at the demand-supply situation, the city has a population of around 1.1 million which is growing at a rate of round 8-10% p.a. That implies adding roughly 100,000 persons every year. Assuming a family size of 4, the total demand would be roughly 25,000-35,000 every year. But the real estate in the city is not focussed on EWS which would be roughly 40% of the population. If we take out 40% population which is not target of builders, the additional demand each year would be roughly 15,000-20,000 flats (assuming a family size of 4).

This translates to roughly 4.5 years of demand. This does not include inventory held by investors who are looking to sell their properties. Now with economic conditions deteriorating due to Corona, the demand will come down further. Given the demand-supply, the prices should not increase. The only way, current investors can get a return of 6% is if the prices come down further and rental to price returns equal 6% for the next 4-5 years.  Hence, we can say that residential real estate is overpriced in Noida. The same framework can be used to evaluate prices in Industrial and commercial sector.

Roman Empire teaches us importance of culture and values in building great companies

Tags

Building Great Companies, Democractic Organizations, Learning Organizations, Organizational Culture

Roman Empire lasted some five centuries and at its height spanned from England to most of Europe, stretching from England to Greece, North Africa, West Asia. Romans dominated Mediterranean Sea. More importantly it was known as Empire without an end, that is neither the time nor space limited it. The empire became a role model for other empires and rulers. It changed the world. For example, Britain was a geography with multiple smaller kingdoms. Each group thought the piece (of land) that they had was their own. There was no political unity until Romans brought them under one rule. There by, in a way, Roman empire created Britain.
Interestingly we do have companies that have survived five hundred years but they are not widely known. The oldest one, Kongo Gumi, was setup in Japan in 578 A.D., within 100 years of decline of Roman Empire. Studying about Roman Empire made me realise importance of culture and its contribution in making companies great. Some of the cultural aspects that companies can adopt are:
1. Cultural Integration –
a. Governance structure and rules – Everywhere in Roman Empire the governance structures and rules were the same. The rules were inscribed on the walls of public buildings so that everyone could read them. Most companies today put their policies, processes and procedures on intranet for the same reason. To be consistent, the companies ensure that policies are interpreted the same way by everyone.
b. Architecture – Whole of Roman empire had distinctive architecture- grand community buildings such as amphitheatres, baths, forums, race tracks etc. These buildings fostered a feeling of being Roman. It would not be uncommon to find these buildings even in Algeria, part of which was once part of Roman Empire. While on one hand Romans built typical Roman buildings in acquired territories, they also replicated the best of what the acquired territory had to offer to Rome.
c. Citizenship Rights – All romans had same citizenship rights irrespective of which territory they came from. Hence a slave who was granted Roman citizenship, had same rights that any other citizen of Rome had. This is also important in companies especially now that we have multi-national companies with people of different religions, regions, colour and genders. Companies make HR policies for harassment and to prevent sexist or racist comments. But these are not inclusive actions, inclusiveness is attained by giving even minorities equal voice as Romans did.
2. Core Values
a. Inclusiveness – Romans did not force the territories to adopt their lifestyle or language. They adopted and included them, e.g.
i. Religion and Gods – Romans had multiple Gods. They included gods of acquired territories within fold of their Gods. At times, even giving them joint name for example Goddess Senua (of Britain) became Goddess Minerva Senua. The relationship with God was similar across the empire.
ii. Language – Though Roman and Greek were official languages, all the acquired territories were free to use their language.
3. Decisions made on Merit and Democracy – Romans had emperor but also had senate and four assemblies and local groups. The assemblies or different bodies met at Forum; a building built through out Roman empire. Candidates were selected by citizens who were allowed to vote. This promoted a system of merit since, as mentioned aforehand, Romans had strict and very defined rules on governance. This allowed even slaves to graduate and become Roman citizens. Similarly, anyone could become an Emperor. Their emperors did not come from Rome but from Spain, North Africa, Syria, Balkans etc. The citizenship to Roman Empire had to be earned. For example, soldiers could become citizens by completing twenty-five years of service or performing exemplary act of valour in the battlefield.
4. Role of women – Women played important role in Roman society not only in trade and craftmanship but also in royal household. For example, Livia, wife of Augustus, built buildings, organized religious festivals and reached out to other women. She was not an exception and many of the emperors had influential wives, mistresses, mothers and even mothers-in law. The companies are also now increasingly being gender conscious. More and more women managers are breaking glass ceilings.
If Roman Empire was great, it was because Romans developed a culture of discipline, inclusiveness, democracy and merit. One of the reasons for decline of Roman Empire was in-fighting between Romans over religious beliefs with advent of Christianity which believed in One God instead of multiple Gods (Core beliefs and values were being questioned). Today, when the work has become complex and inter-dependencies within roles has increased, when most companies are now promoting team work, these values (of inclusiveness, promoting merit, being democratic and discipline) have become even more important. The founders have to work on it from the day one. True to the saying, ‘Rome was not built in a day’, a company’s culture too cannot be developed in a year. It is a continuous process. Any IBMer would tell you that !( https://www.ibm.com/blogs/jobs/2018/12/20/i-think-therefore-i-am-an-ibmer/).

Design Thinking and Town Planning

The other day Mr. Ratan Tata mentioned that developers should be ashamed of creating slums. He is very correct in many ways. But the problem of slums has more to do with town planning than with developers. Take example of Noida which has been developed by a PSU, a UP government agency. The sector in which I live in, Sector 119, itself has provision for roughly 5000 HIG families. There are adjoining sectors which would also have similar number of flats. All these flats would need atleast 1 support staff each. But has NOIDA Authority provided for it? The support staff like drivers, maids, guards live in two adjoining villages. As the occupancy in these flats goes up, the load on villages will increase and I would not be surprised if we would see other NItharis developing in Noida. Interestingly Noida was supposed to be an industrial township. Any factory or industry would have a pyramid. With more of workers, fewer managers and may be very few owner(s) at top. Hence the housing facilities should reflect that pyramid structure with LIGs and EWS at the bottom and HIGs and Super HIGs at the top of pyramid. Design thinking can be used everywhere. Be it designing towns or designing Business Processes.

Click on link below and watch the Powerpoint Show
Design Thinking and Town Planning

Red Flags in Indian Economy

Tags

Asset bubble, GDP, Indian Economy, Make in India, Narendra Modi

For long, India was compared to China and suddenly with Chinese meltdown, India started to look much better. Despite logjams in parliament, India with its stable political regime, large domestic market, Indian multi-nationals and pipeline of foreign investments in manufacturing and services, seems much better than other BRIC economies that are plagued with some or a mix of factors such as high debt, poor infra-structure, political uncertainty or a bureaucratic regime that makes Indian bureaucracy look pink. .

Mr. Narendra Modi, instead of resting on weak Dollar prices, an economy that managed to move forward despite poor rains, needs to watch out for red flags.

Prone to bubbles
The Indian economy has been growing at a pretty decent rate with real GDP growth at around 7%. Most of this growth has come from growth of Services Sector. In 2014-15, the share of services sector was 52% in GDP and of this 20% came from real estate industry, financial services and professional services.
The growth in services sector comes primarily from abundance of cheap, skilled manpower that can speak English. The two stated drivers for growth have been 1) Development of technology that made outsourcing work to offshore centres easier and 2) the cost differential between labour costs in India and those in US and Europe. An unstated driver has been excessive liquidity in the West with very limited investment options especially in debt leading the investors to look at emerging economies. India has been able to attract most of this money not because it was the best but because it appeared to be less risky than other economies. It attracts liquidity from investors in US and other countries for investment.

As a consequence, India economy has been prone to asset bubbles. Two of the major ones are

1. Real Estate – The bubble is about to burst as indicated by the suicide committed by the Thane builder due to excessive debt. His struggle is a struggle faced across the industry, be it large, medium or small real estate developers or builders. The suicide is reflective of high risk in developing a property, especially getting bureaucratic clearances, and of poor returns. The rental income is around 3% of investment with little or no possibilities of capital appreciation in medium term due to high inventory levels. There are very limited chances of price appreciation in the next couple of years. Fuelled on low income rates and booming salaries, real estate had become the only investment option for lot of people.

The returns in real estate sector excluding cash components in the transactions may in some cases be poorer than other financial instruments such as equity. Please see the illustration below.

The government and RBI failed to read the signals and did nothing to cool it down. The sector is one of the biggest contributors to low sentiments in the economy. A softening of prices will help the other sectors in reducing their costs and help them revive it while the investment sentiment continues to be low. The challenge for the government is how to soften the blow and reduce prices.

2. Another bubble being built up in the economy is e-commerce. The driver again is global liquidity and lack of investment options. Most of the ecommerce ventures have been around for atleast 5 years and are running into losses. Despite this they continue to attract venture funds. Interestingly most of these venture funds have a stated policy of not funding ventures that do not achieve operational viability within the first two years of operations.

“Make in India” is not happening
Post World War and till 2008, it was US Economy that led recovery after global crisis. Part of it came from propensity to consume by US consumers but it was also because of the technical leadership of the USA companies. USA was the biggest spender in research till it was pipped by China couple of years back. This investment in research led to US companies becoming technical leaders on one hand and sought after brands on the other hand.

Compare it with India. Per thousand persons, India has less number of researchers than Kenya has. India’s spend on R&D is only 0.9% of GDP compared to 2.7% by USA, 2.08% by China and 4.36% by South Korea.

Another big symptom of skew in Indian economy is hiring pattern in Indian Engineering colleges. Of the class strength, 50% end up in coding, 35% pursue MBA or take a job with consulting companies and financial services companies basically as analysts. Only 10-15% engineering students pursue Engineering and take up either Engineering jobs or pursue post graduate studies in Engineering. The bulk of the engineering jobs still come from production and operations and not research and development. Most Engineering students from good colleges who want to pursue higher studies and want a career in research and development go abroad mainly to US for their MS. The brain drain still continues in India.

In Mr. Narendra Modi’s Gujarat, Doctorate graduates were provided ad-hoc jobs in teaching institutions at Rs. 5,000 per month killing any incentive for a student to opt for higher studies and a career in research.

“Problem of plenty and poor work culture”
India also faces problem of plenty. It has a huge population. This coupled with the lack of resources and gross mismanagement of resources limit India’s options for growth. The poor work culture including the culture of bribe permeates all sectors. For example, in auto industry, most quality control personnel are on cash retainership of vendors. The government is poor but the politician s who are meant to provide good governance are not. It’s a known fact that one of the major drivers for growth of real estate industry were politicians who used it to invest their ill-gotten wealth.
With increasing automation in software industry and replacement of manual labour with electrical gadgets, the country faces grave risk of growing economy with reduction in jobs. The low end jobs will be eliminated. Till now, India was able to work well as our population ensured that we had overqualified people in most of the jobs especially at the entrance level. Engineers replaced Diploma graduates on the shop floor just as MBAs replaced graduates in sales and other jobs. The problem of plenty with poor remuneration rates also meant that most of the graduates being produced in India cannot match skill sets of graduates in western world. The shrinkage in low level jobs will create serious problem for India and worsen economic sentiment. Given the hiring pattern at the engineering institutes, elimination of even 5% of entry level jobs in Software industry will create serious problems.

The country is also producing lot of graduates. The economy would have to maintain its growth to continuously absorb them and create jobs that can meet with their aspirations. Besides these, India also produces lot of unskilled and semi-skilled labour. With automation the low end jobs will be under pressure and reduce creating a mismatch in demand and supply. Already Government has been forced to initiate MNERGA to provide employment to rural poor. But the crisis will only grow in India with rising population.

Conclusion
The agenda for Mr. Jaitley is very clearly defined. The last decade and half as led to rise in living standards in urban areas. This has led to rise in aspiration levels across social classes and strata. This life style and aspirations can be only fulfilled if the Government can mobilise private and public investments in creating new jobs. For India to attract foreign capital it also needs to build physical infrastructure that increases efficiency, reduces costs and social infrastructure that is sustainable. Growth without jobs is not sustainable. A possible solution could be a MNERGA kind of scheme to develop physical infrastructure.

The government can also avoid automation if it can change the work culture of the country. Take for example, at home, machines and gadgets like washing machines are replacing manual labour and increasing fuel consumption. India needs to harness its human energy and reduce its dependence on energy from non-renewable resources. India needs to invest in research and development to create intellectual property and give its industry a cutting edge over others. It has to invest and fund research in colleges and encourage industry to invest in it so that we can develop competitive edge over China and US.

Sex, Gender and Sexuality

Sex, Gender and Sexuality

The other day, I was applying to an international development organisation for a job. The online application form had me stumped when it asked for my gender. Thinking back, I realise that’s the way it has become with most development agencies. Today gender empowerment is construed as empowerment of women. Say there is a gender training and everyone takes it as it would be about women empowerment.
I think its high time, we revisited basic definitions of sex, gender and sexuality.

SEX – was meant to define body type and the three sexes were Males, Females and Transgenders. The body characteristics of males and females were very clearly defined. The transgenders were different matter but physically people could differentiate the three sexes clearly.

GENDER – Gender were characteristics or qualities. Being masculine or feminine was distinct from being male or female. Femininity was characterised by gentleness, sensitivity and empathy. While masculinity was characterised by courage, independence and assertiveness. Females could also be independent and courageous just like there could be males who could be sensitive and could empathise.
Similarly tasks and jobs were also associated with feminine and masculine characteristics. For example, driving trucks was considered a masculine job and raising kids was considered feminine.

SEXUALITY – Sexuality is physical attraction and sexual preferences. A person could be homo sexual ( love somebody of same sex) , hetero sexual ( love someone from opposite sex) or pan-sexual ( someone who has sex with males, females and transgenders).

Conflict as indicator of Development

Tags

HDI, India

Conflict can be used as an indicator for development of a society or country. Conflict reflects fight for resources where the players perceive it as a zero sum game. Conflict could be both inter-specie and intra-species. Shrinking forests and loss of bio-diversity is reflection of inter-specie conflict, a conflict in which human beings are crowding out other species from the Earth. We are all familiar with intra-specie conflict between two individuals, within families, groups, religions, countries etc.  It assumes various forms such as crime, riots, acts of terror and wars between countries.

The primary driver to conflict is desire to control resources or access to resources and services. Take India for example, the rich can afford a quality of life which is similar to or better than their counterparts in west. Cost of human labour is cheaper and hence can afford drivers, maids etc. The quality of medical services, schools are same as western countries, albeit at a cheaper cost. They can afford 24*7 electricity supply and can eat authentic Italian, French or Japanese cuisines. Compare this with quality of life of poor. They have to rely on government infra-structure for transport, health facilities etc. The government facilities are inadequate both in numbers and quality of services provided. It’s a constant struggle to get resources. I remember my own visit to Safdurjung Hospital in Delhi when my father in law had met with an accident and was taken there. The doctors did not have tourniquet and I had to hold arm of the patient on the next bed while the doctor administered IV injection. The conflict is not about quantity of wealth but in differences in life styles or services and an aspiration to live that lifestyle.

At the society level, most of the crime is reflection of aspirations to live the lifestyle or frustrations of not being able to live the lifestyle or struggling to live. At the level of countries it leads to wars. For example, US would not hesitate to fight to in Kuwait to safeguard its interests in oil as the availability of oil affords it to maintain its lifestyle. And somewhere in between are naxalites in India, or protestors in Hongkong or Thailand who want more control in Governance, indirectly more control on allocation of resources. No wonder countries with poor governance see higher crime rates and/or conflict.

Level of conflict in a society can be a good indicator of development in the society. HDI does not include environment and only captures economic growth without capturing cost to environment. The other factors being health and education. Life Expectancy or Average age in a country is also a good reflection of conflict. People with poor access to health facilities, or countries with high level of conflict or man-made or natural disasters which result in shortening of life. For example, life expectancy increased from 44 years in 2001 to 63 years in Afghanistan.

Since it may be tedious to measure conflict, some of these surrogates may help to determine level of development of a country. These surrogates could be the factors that may lead to conflict over resources.For example, a society with very skewed distribution of resources would lead to growing frustration or stress and may result in crimes or a revolution as described by Karl Marx. So a surrogate could be wealth distribution within the society or income distribution within the society. There could be multiple indicators to capture these inequalities. For example, Gini’s Index, ratio of wealth owned by top 10% in the society and bottom most 10% in the society. Intra-specie conflict would be reflected in bio-diversity. Since forests are home to or part of eco-systems that sustains a wide variety of species, that can be taken as an indicator

1. Forest cover in a country – more forest cover would mean more land and more eco-systems for other species to survive
2. Corruption- Corruption and nepotism compromise merit and thus deny the rightful claim. Most often than not, people with resources are able to bend the system to enrich themselves or benefit themselves at the cost of worthyTransparency International already has an index for corruption in countries and ranks them on basis of level of corruption. More the corruption, higher is the cost of goods and services and higher is distortion in access to services. The rich will be able to afford better quality goods and services or would be able to jump queues.
3. Distribution of wealth or assets in the society. Percentage of wealth held by top 10% of the population. Distribution of income levels in the economy.

Interestingly some of the the countries which are ranked high in HDI also show low levels of conflict.

http://www.ask.com/wiki/List_of_countries_by_Human_Development_Index?o=2802&qsrc=999&ad=doubleDown&an=apn&ap=ask.com

http://www.happyplanetindex.org/data/

And the key differentiators between countries with high HDI/ High Happiness and high HDI and low happiness are

1. Quality of governance

2. Higher taxes on the rich

3. Welfare state, where government ensures quality education and health to most citizens besides safety and security.

Add to it personal freedom and the list is complete.

Sets the agenda for Indian Government or Mr. Narendra Modi as well.

Need for an India Vision

Tags

development professionals, India Vision

Need for an India Vision

It was during my MBA that I read the book Poverty by late Dr. Maqbul Ul Haq. The book moved me enough to look for a job inDevelopment. After my MBA, I started exploring the field and went and met with NGOs to understand their work. And with one of the NGOs, I went and stayed in a village for 4 days. That was my first overnight visit to a village. Till then it had always been day visits to my grandfather’s village. This was also the first time, I stayed on the other side of the village amongst “Chamars” or leather artisans as the NGO used to call them. During days, I would go with them from village to village mobilizing people to form a cooperative. The NGO used to work primarily in area of income generation.

As I chatted and spent time with villagers, I realized that immediate priorities or needs of most of them were to own a pucca house, a motorcycle and a tubewell for fields. A pucca house also meant significant investment in making that house livable such as round the clock electricity, fans and coolers. There was a village school and no medical facilities. While the group was willing to come together and form a cooperative for income generation, they were not keen to extend the cooperative for some of the other necessities like building common irrigation facilities for fields etc. Over the years, and after taking up job in one of the large international NGO which was also one of the largest NGOs in the country, I discovered that most development professionals only concentrate in one sector. There are very few cross sectoral projects. Also the projects that it had in different sectors were not layered on top of each other.

As I spoke with and interacted with many development professionals, I realized that most of them do not see beyond their sectors ( either as an individual or as organizations). The organizations do not have a collective vision of what a developed society will look like.  Interestingly, even at the global level, there is no collective vision or definition of what a developed society should or would look like. There are indicators which are spread across sectors.

In absence of this collective vision, for most villagers, progress in life was living life style of city people. For the development professionals and for people in cities, growth and progress in life meant living lifestyle of US and western world. While it was never a stated objective, it was always implied. There seems to be no common vision of Indian lifestyle or Indian way of life.

Since US lifestyle is looked up to by other parts of the world, especially, (so called) developing countries, this has affected choices in consumption in other countries. For example, the trend is getting increasingly replicated in urban India with the ratio of number of TVs in house/ number of bedrooms slowly creeping to 1. With the population  like that of India, it is a huge strain on environment. It also leads to huge demand for natural renewable and mainly nonrenewable resources. While researching for Montreal protocol, I had discovered that per capital consumption of CFC gases in US was 3 kg which was much higher than 0.003 kg in India and China. However a major concern of US and Western countries was that a ten time increase in the consumption factor in India and China would be catastrophic for Earth due to the population of these two countries.

Equating “development with American Lifestyle” is distorting the pecking order of investments in rural areas and amongst urban poor. Bulk of the investment goes in creating physical infrastructure or in consumer durables and non-durables instead of health, education, sanitation and other non-tangibles.

Thus, people in ‘developing rural India  have easy access to mobile phones, TV’s, cars , Maggie, Chips, Pepsi and other tangibles, but they do not have similar access to quality education, health services and potable water. There is also element of belittling traditional wisdom for sake of western ways which are considered modern way and hence better way of life.

Increase in the consumption with the so called development leads to increased demand for natural resources which has a cascading effect. There is increased demand for land for mining, for setting up manufacturing plants etc. This creates conflict with existing owners.

The present version of development is also leading to increased conflict in the society where the asset ownership is skewed. The rich continue to get richer and poor continue to lose out and get poorer. This has been very well explained by HouseHold model in Economics.

This has multiple implications:

1. Poor do not want to part with their assets such as land as they will lose their future income. Also they are not sure if they will get a share in increase of asset price in future as the rich would see increase in value of asset (due to their investment ) as return for their investment.

2. The disparity between the quality of life increases. The rich can afford to live a better quality of life on the assets and services of poor. Rich in India are able to create their own infrastructure and able to access same or better level of healthcare services, education etc. as in America. While the poor are dependent on state infrastructure which is inadequate in both quality and quantity.

Thus, accessing basic facilities becomes a struggle leading to anger and frustration. Also there is aspiration to live a lifestyle of consumption, leading to increased crime. Either way, it leads to increase in violence or class struggle in the society which could range from pickpocketing to Naxal movement.

The need of the hour

The need of the hour is, India Vision. Mahatma Gandhi wanted Ram Rajya in post independent India. The key characteristics of which were lack of conflict and crime, prosperity for everyone, that is, everyone either owns or has access to goods and services. Unlike US, we have to base our system on cooperation and sharing instead of owning. These are values that are taught and cultivated in East. Unlike US and West, we have to develop our own lifestyle and develop our own definition of a developed society.