Amartya Sen: Academic governance in India remains deeply vulnerable

I am writing to you on a subject relating to the governance of Nalanda University in which all of us have been very deeply involved. As you know, at its last meeting on January 13-14, the board decided unanimously (in my absence - I had recused myself - leaving George Yeo to chair the meeting) that I should be asked to serve as chancellor of Nalanda University for a second term, when my present term expires in late July. The unanimity was, I was pleased to be told, firm and enthusiastic, coming from all members of the board, which - as you know - consists of representatives from different Asian countries (including China, Japan, Singapore and others), in addition of course to Indian academics and professionals.

However, the decision of the governing board becomes operational, according to the Nalanda University Act of Parliament, only after the visitor of the university (the president of India, ex-officio) gives his assent to the decision. I understand that the board's decision was conveyed to the visitor in mid-January, immediately after the meeting of the governing board, drawing his attention to the urgency of the matter, since the planning and implementation of new teaching and research arrangements are proceeding rapidly in the newly functioning university.

More than a month has passed since then and it now seems clear that the visitor has been unable to provide his assent to the governing board's unanimous choice in the absence of the government's approval. The governing board has not been favoured with a reply to its request, either from the president's office or from the ministry of external affairs. As board members are aware, our visitor - President Pranab Mukherjee - has always taken a deep personal interest in the speedy progress of the work of Nalanda University, and given that, we have to assume that something makes it difficult - or impossible - for him to act with speed in this matter.

Non-action is a time-wasting way of reversing a board decision, when the government has, in principle, the power to act or not act. This, as you might recollect, also happened to the revised statutes that the governing board passed unanimously last year. Many of these statutes (including the one pertaining to the chancellor's term of office) also never received formal acceptance or rejection from the ministry of external affairs, which had the role of coordinating with the visitor's office.

It is hard for me not to conclude that the government wants me to cease being the chancellor of Nalanda University after this July, and technically, it has the power to do so. This delay, as well as the uncertainty involved, is leading, in effect, to a decisional gap, which is not helpful to Nalanda University's governance and its academic progress. I have, therefore, decided that in the best interest of Nalanda University, I should exclude myself from being considered for continuing as chancellor beyond this July, despite the unanimous recommendation and urging of the governing board for me to continue. I take this opportunity also to thank the governing board very warmly for its confidence in me.

As you would also remember, there was considerable disquiet among board members about the government's evident unwillingness to appreciate the international character of Nalanda University and to pay appropriate attention to the multi-country governing board of the university. In particular, the governing board was kept completely in the dark about an attempted unilateral move by the government to rapidly reconstitute the entire board, and to do this in violation of some parts of the Nalanda University Act (reflected especially in the letters that have already been sent out to foreign governments, departing from the provisions of the act as it now stands).

I write this letter with a heavy heart since re-establishing Nalanda has been a lifelong commitment for me (as it is important also to you). While classes have very successfully started, on a small scale, in two schools (the school of history and that of environment and ecology), we are, as you know, in the process of planning other schools, including a school of economics, a school of public health, and a school of Buddhist studies, philosophy and comparative religion, and also of augmenting the intake of students. I have been personally much occupied with this planning but I will, of course, pass on the work-in-progress to the vice chancellor.

I am also sad, at a more general level, that academic governance in India remains so deeply vulnerable to the opinions of the ruling government, when it chooses to make political use of the special provisions. Even though the Nalanda University Act, passed by Parliament, did not, I believe, envisage political interference in academic matters, it is formally the case - given the legal provisions (some of them surviving from colonial days) - that the government can turn an academic issue into a matter of political dispensation if it feels unrestrained about interfering.

As a proud and concerned citizen of India, I take this particular occasion to communicate my general disquiet in public, which is why I am openly sharing this letter.

Also, since I receive a great many constructive suggestions every week about teaching and research at Nalanda University for possible implementation (a number of these suggestions coming from the public have indeed been extremely useful for the academic planning of Nalanda), I am using this occasion to publicly communicate that I shall do whatever I can over the remaining time I have, though the leadership of the long-run planning of Nalanda has, obviously, to come from someone else.

I end by thanking you for the help, advice and support I have been receiving from all of you, which I will continue to treasure even when I move away from Nalanda University this July.

Lateral entry into the #civilservice is not a good idea

There has been much sound and fury about the need for induction of talent from outside into senior positions in theGovernment of India at the level of joint secretary and above. Several articles and editorials have made the case for lateral entry, without any case being made in opposition. This article seeks to restore the balance in what has been a one-sided debate.

The Indian civil services, particularly the All India Services(AIS), provide managerial leadership for government as a whole. The civil services have knit the administrative framework of a vast and diverse country into a coherent whole and provided a strong integrating element which the country can ill-afford to tamper with. They have provided an outstanding link between the cutting edge at the field level and top policymaking positions. This bridge, while crucial to all systems, has been of strategic significance in the Indian context, given the diversity and widespread poverty of the population. The width and depth of field experience which the civil services provide is simply not available with outside talent. There is no way that external talent can bridge the gap between policymaking and ground level implementation better than career civil servants.

The proposal for lateral entry at senior decision-making levels, besides increasing the disconnect between policymaking and implementation, will also result in inequitable sharing of the benefits and burdens of government service, with permanent civil servants left to bear the burden of "humble" implementation and lateral entrants getting access to "glamorous" policymaking positions, without having roughed it out in remote and rural India in the rough and tumble of Indian democracy. While there would certainly be a beeline for lateral entrants to join top policymaking positions, there would be no such great desire to serve the country at the ground level.

While there may be exceptions, the experience of inducting private-sector managers to run public-sector enterprises is not particularly satisfactory. Whiz-kids from the private sector who ran Air India, Indian Airlines and Vayudoot proved to be failures. Clearly, performance is vitally influenced by the enabling environment and the best managerial capability cannot deliver results in an adverse operating environment. A major part of the disillusionment (if any) with civil servants can be attributed to this enabling environment where innovation and risk-taking have been at a heavy discount. The oft-cited example of the Unique ID Authority of India attributes credit to a single individual, overlooking the contribution of outstanding civil servants like the director-general of the Authority.

It has generally been perceived that a secure career path has become one of the biggest shortcomings of a career-based structure. This is simply not true. There is no assurance that all civil servants will automatically reach the highest positions. In reality, there is tough competition - increased through rigorous scrutiny and weeding out of officers for empanelment at the level of joint secretary and above. In fact, the career trajectory of civil servants has become increasingly uncertain, insecure and hazardous.

The best talent can be attracted only if there is reasonable assurance of reaching top level managerial positions. This is true for government service as much as the private sector. Any dilution of the potential horizon for growth would discourage competent and motivated people. By suggesting a contract-based system for positions of joint secretary and above, the signal would be sent out that only mid-career positions would be within reach in about 15-18 years of service and there would be considerable uncertainty about career progression thereafter. Coupled with unattractive salary scales and non-entitlement to defined pension since 2004, this would become a potent trinity to deter talented persons from aspiring to civil service careers.

A good managerial system encourages and nurtures talent from within instead of seeking to induct leadership from outside. Any failure in this matter is primarily a failure of the system to identify and nurture talent at the appropriate stage. For this, the remedy lies not through lateral induction but through more rigorous performance appraisal and improved personnel management. Large-scale lateral induction would, in fact, amount to a vote of no-confidence in the government personnel management system, rather than in the highly dedicated, motivated and talented officers who have chosen to join the civil services.

It is not clear how lateral entrants would be more performance-oriented and less process-compliant than the civil service, considering that process compliance is the sine qua non for any supervisory authority. Expecting any different from lateral entrants would result in private sector lambs being led to slaughter.

The difficulty in measuring performance in government is another obstacle to be reckoned with. It is not easy to assess the performance of a secretary to the government, given the sheer complexity and amorphous nature of the job. The induction of lateral entrants would not by itself suffice for better performance orientation and enhanced accountability. It would be as difficult to measure the performance of lateral entrants as it would of career civil servants.

The real challenge before the country is the challenge of implementation. Lateral entry into top-level policymaking positions would have no impact whatsoever on field-level implementation. In that sense, the proposal for lateral entry is a red herring to the fundamental issue of weak implementation.

To sum up, while there are many shortcomings in the civil services in India, the suggestion for large-scale lateral entry into top policymaking positions is ill-considered and half-baked. Lateral entry would open the flood gates for a spoils system, drive talented people away from a civil service career, would be inequitable in terms of sharing the burdens and benefits of public service, would widen the disconnect between policymaking and implementation, and would not by itself result in improved managerial performance or enhanced accountability. Lateral entry has been an exception in the Indian civil service system and should continue to be so.

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Presidents & PMs, past and present(s)

Narendra Modi's suit, the one with his name repeated on it a thousand times along the supposed pin-stripes, was auctioned for more than 40 times the value Rahul Gandhi put on it, Rs 10 lakh. Clearly, Mr Modi has some rich admirers.

But, just to remind Mr Gandhi, his grandmother is said to have had a very rich admirer, too, in the mid-1960s. He was a physicist, poet, musician and shipping magnate called Dharma Teja.

It was alleged by the socialists then that he had given Mrs Gandhi a very expensive mink coat, which of course she had denied indignantly. But no one believed her because Teja had been very 'close' to the Nehru family.

Jawaharlal Nehru had done him a few favours which helped him become very rich. His full story, which is utterly fascinating, can be found here:http://indiatoday.intoday.in/story/jayanti-dharma-teja-an-unheralded-comeback/1/371491.html

Dastur-e-jahan

Indira Gandhi and Narendra Modi may not have much in common - barring political style - but there is one quality that they do share: neither can be accused of personal avarice and corruption.

Yet, when the pages of history are turned - and regardless of the truth - the bespoke suit and the mink coat will pop up from time to time to remind everyone that it is best to beware the Greeks bearing gifts. Timeo danaos et donas ferente, as they said in old Italian, referring to the Trojan horse. You never know what time-bombs these gifts may contain.

The Africans and even the 'native' Americans discovered this to their cost. Whether it was bottles of rum accompanied by chicken, goats and glass beads or blankets infected with small pox, or something even more striking, giving gifts to heads of government, whether elected or self-imposed or hereditary, has been going on ever since government as an institution was invented.

It's a perk, but you are not supposed to avail of it fully. That's considered bad form. The rule in India is that you can take a maximum three items provided their value does not exceed a very low amount.

This provides the loophole. The trick lies in stating a very low value for whatever you fancy and then taking it home when end your stint by paying that low price. Everyone knows what's going on and everyone tips a wink.

There is another loophole, too, but only for the married. Expensive gifts can always be given to spouses who are usually under no obligation to declare them.

But some countries do insist on it. The rule, however, is observed only in the breach. Most countries think the issue is too petty to bother with - especially media editors who also have a rather good time via gifts.

Like I said, this gift business has been going for some time. Robert Clive was first surprised at the practice of Indian gifting and then delighted. He is believed to have told the British parliament which chastised him for being such a greedy sod - a mere 235 years or so ago - "I stand astonished at my own moderation."

Everyone who came to see him after he conquered Bengal, he told the jealous MPs, brought lovely presents. He said he simply could not refuse them without giving serious offence.

Poor fellow, imagine his dilemma. Maybe Modi (and, if she did receive the gift, Mrs Gandhi too) also felt similarly obligated.

Plus ça change...

One would have thought that the high moral ground that politicians have sought to occupy in the last 60 years would have ended the practice. No chance. As the French say, plus ça change,plus c'est la même chose (the more things change the more they remain the same).

The temptations are hard to resist. Tony Blair is supposed to have made off with gifts worth a small fortune, including expensive watches and guitars. But he had the bad luck to be detected and the British tabloid press had a field day. Others, one can be sure, must have helped themselves on the perfectly legitimate grounds that as long as it was not coming from your country's taxpayers, it was fine. That's certainly true.

In any case, it is not very clear what purpose the gifts serve in storage. It is not as if they are in a museum and people can view them.

Let me end by drawing attention to the link below which gives the gifts received by Manmohan Singh and Sonia Gandhi during October-December 2013. Look at the declared values.

It further confirms who the real boss was.

http://mea.gov.in/images/pdf/list_of_gifts_wef__1st_October-_to_December_new1.pdf

India Indonesia Joint Exercise Terminates

India Indonesia Joint Exercise Terminates

Exercise #GARUDASHAKTI-III, the 3rd exercise in the on going series of joint exercises between armies of India and Indonesia, was conducted at Counter Insurgency and Jungle Warfare School in Vairengte, Mizoram from 09 to 21 Feb 15. The exercise aimed at building and promoting positive military to military relations between the armies of the two nations. The scope included sharing experience in counter terrorism and conduct of joint counter insurgency training at platoon level aimed at neutralizing of terrorist threat. Indian Army was represented by troops from an Indian Infantry Battalion and Special Forces unit while personnel from 432 Battalion Kostrad Infantry (Airborne) and Gp I & Gp II of the Special Forces represented the Indonesian contingent. The joint training was aimed at enhancing the knowledge of each other’s military experience, skills and techniques and thereby enhancing the aspect of interoperability and responsiveness to a common threat in the future. The Exercise will go a long way in further strengthening the historical and diplomatic ties between both the nations.

The buzz around innovation

As write my twenty first Innocolumn, I find that I am reflective. Is innovation really increasing in the world? Is it too much of a buzz word? If so, is that good or bad? When plain Joe thinks of innovation, Apple, Google and the like come to mind. Why none from India or its mighty corporations?

George Mason University economist, Tyler Cowen, opines that no matter what the hype may be, the forward march of technological progress in the world has hit a dry spell since 1970. "Look at the period from 1870 to 1940 and think about how unbelievably creative and powerful that was," he argues. He goes on to wonder whether a great ability to manipulate information has been practised by a few people who keep talking about innovation. I get curious about its history and etymology.

In Indian languages, there is no colloquial word for innovation, emphasise colloquial - I know this because I speak Tamil, Hindi, and Bengali fluently. There are words but you have to resort to a Sanskritised artifice. Is that so in English as well? How and when did it come into English?

Emma Green's denouement of the history of the word 'innovation' (The Atlantic) provides a clue. Canadian historian Benoit Godin states that the word 'innovation' first appeared in the texts on law to mean renewing contracts. It had no connection with creativity, it merely meant renewal. During the seventeenth century, when Europe was far more conservative, every attempt to interpret religious matters was anathema. English puritan, Henry Burton, published pamphlets against 'church innovators' to suggest that such people were upstarts and imitators, not very complimentary. 'Innovation' in the early years carried a retrograde tonal quality.

With the industrial revolution, 'invention' became a highly desired activity and by 1800, the word came into common English usage. Soon, this previously pejorative word started to get applied to science, and the innovation word entered the lexicon through a mental association with technical invention; perhaps that explains why to this date, innovation is linked in many peoples' minds to R&D rather than to business models.

This is quite unlike in emerging markets, where the term jugaad has many contextual usages. An equivalent of jugaad exists in Brazil (gambiarra), in China (zizhu chuangxin) and in software (kluge).

Google's useful Ngram database of word use suggests that in 1800, the word invention was used four times as frequently as innovation; after a century and a half, invention and innovation became equally used; since 1970, innovation has overtaken invention and the innovation word has been used more frequently. The distance between the usages of innovation over invention is increasing. So what caused the pattern of word usage to change?

For the first time, in 1939, Schumpeter differentiated between the two words by stating that innovation involved commercialisation, not just a new idea. From 1950 onwards, the American economy brimmed with growth and ideas. Innovation began to be thought of and funded as a packaged, predictable research product. Some experts like Tyler Cowen feel that innovation peaked around 1970.

On January 1, 1969, a Bell Labs researcher, Jack Morton, and two scientifically trained journalists, William Maass and Robert Colborn, abandoned their traditional professions. They formed a company called Technology Communication, and this company placed advertisements in Scientific Americanand The Wall Street Journal inviting readers to become members of a new and elite group called Innovation Group. The company also began to publish a magazine, Innovation.

One year later in January 1970, 200 technology managers assembled for a workshop at Glen Cove, Long Island, to learn what it takes to be an innovator. They wove parables about how their lives were changed by 'the accelerating rush of innovation' and attendees were encouraged to 'seize the chance' that was offered to them. This weekend workshop, for which participants paid the modern equivalent of $3,000 each, captured a club-like exclusivity, expert insight and collective self-help.

In hindsight, Technology Communications Company, Innovation magazine and the exclusive Innovation Group created the fillip and buzz around innovation. As an aside, after the Long Island workshop, two tragedies occurred - Robert Colborn died of cancer and Jack Morton was set ablaze in a gruesome murder. What an end to enthusiastic purveyors of innovation!

This brief history demonstrates the value of creating buzz: writing about and celebrating innovation in a journalistic way. Whatever cynics might say, buzz has a value. It changes language and culture, and that is hugely important in social transformations.
R Gopalakrishnan

Appeasement for none Intellectual property policy should focus on implementation

A preliminary draft of a new intellectual property rights policy for India has been the occasion for much discussion. Commerce Minister Nirmala Sitharaman even felt it necessary to assert on Twitter that the proposed revamp is not meant to appease the United States, given that this remains a major outstanding irritant in relations between the two countries. The government has argued that the major changes in the draft are directed largely at promoting and protecting indigenous innovations. However, the stress laid in the new policy on better administration and enforcement of IPR systems and safeguarding the commercial interests of intellectual property owners may address some of the key concerns of IP-intensive industries in the US and other countries. Apex bodies of sectors like pharmaceuticals, clean energy (solar) and information technology continue to lobby with the US administration to ask India to bolster its IPR regime. India is a "Priority Watch List" country, according to the United States Trade Representative, for its supposedly weak IPR and patents regime. Any downgrade might entail trade sanctions; the new policy might hopefully avert that threat. In any case, India's IPR regime has undergone a marked change since the late-1990s. Some nine IP-related laws have either been enacted or enhanced between 1999 and 2012. These include the landmark amendment of the Indian Patents Act, 1970, which facilitated the switch-over from process patenting to product patenting. The updated IPR legal framework, the government has argued, is compliant with the provisions of the global agreement on the trade-related intellectual property rights (TRIPs). Certainly, it has not been challenged at the World Intellectual Property Organisation (WIPO).

But beyond the law is its implementation. And this has certainly been a weak point in India. Piracy and counterfeiting are rampant - which adversely impact the commercial interests of not only foreign but also domestic IP-owners in several sectors. They also hurt the end-consumer, who suffers from want of variety and authenticity as a consequence. Since online piracy, which has blurred geographical boundaries, has also assumed significance, the new policy draft has called for strengthening the machinery for curbing it effectively and expeditiously. The two most widely discussed aspects of the Indian IPR regime relate to compulsory licensing for the local production of pharmaceutical products that are decided to be otherwise unaffordable by national authorities; and efforts to bar the extension or "evergreening" of patents on grounds that are deemed trivial, such as incremental innovation that is apparently insignificant. These provisions might well stand up to international legal scrutiny; it is unlikely that the government will concede any major ground on this front.

One of the striking features of the proposed IPR policy is the emphasis on patenting of innovative utilitarian inventions which are the result of human ingenuity and creativity. The new policy draft stipulates amendment of the present laws or enactment of a new statute to facilitate the patenting of these innovations. Perhaps this will bolster grass-roots creativity. But the exact nature of a law to protect "jugaad" innovation - which by its very nature is haphazard - is difficult to imagine. The government's IPR policy should focus harder to implement the laws India already has. That in itself will help the country address concerns around adherence to global standards.

Demystifying the Budget

Voters should demand that the Budget provide numbers and implications that are easy for them to understandIt is February, that month of the year when the annual Budget of the central government takes centre stage. TheEconomic Survey is usually made public a day before the Budget is presented. As expected, the media coverage is already tending to be repetitive or too gushy. The hype surrounding the Budget gives it undue importance when assessed against the need for continuous government policy making and legislative, executive follow up action. This article attempts to demystify the Budget for the non-technically inclined readers of this newspaper.

The secrecy surrounding tax proposals on exemptions and concessions makes markets follow Budget announcements with trepidation. There is enough anecdotal evidence from the past to suggest that such confidentiality benefits individuals with prior access to privileged Budget information. Consequently, the broad contours of such changes, if any, should be provided well in advance of the Budget to give an opportunity to those likely to be impacted to convey their views. As for major policy reforms, these could be announced from time to time and do not have to coincide with the Budget.
Read our full coverage on Union Budget

The steep decline in oil prices has reduced India's current account deficit despite merchandise exports shrinking in the third quarter of 2014-15. The other wide imperatives for the economy, namely promotion of higher growth coupled with low inflation, are usually lost in analysing the minutiae in the Budget and the extent to which stock markets rise or fall. Equity market capitalisation currently stands at about 90 per cent of GDP and as per RBI's latest annual report only 4.1 per cent of the household sector's financial savings were invested in stocks and debentures as of 2012-13. About 57 per cent of such savings were invested in fixed deposits, 17.2 per cent with LIC and other insurance companies and 1.7 per cent in provident and pension funds.

Positive business sentiments would be promoted if this Budget includes language to resolve pending high profile tax cases. For instance, it is time to encourage foreign and domestic investment by disposing the Vodafone and several other big ticket cases involving not just foreign but also companies headquartered in India. Our revenue authorities often make highly inflated tax claims to meet over ambitious targets. It follows that such cases invariably end up in courts further clogging our sclerotic judicial system.

The Budget number which is discussed ad nauseam is the gross fiscal deficit (GFD) which was projected at 4.1 per cent of GDP last year. In simplistic terms, if the GFD number were to be driven more by well-conceived capital expenditure on infrastructure and the environment rather than on salaries, travel etc. clearly there would be positive implications over the long-term. This single number can be misleading and Table I shows the break-up over the last 10 years. In 2014-15 we expect a primary revenue deficit of 0.38 per cent of GDP. That is, we have little flexibility to invest for the future once internal debt servicing is included. The government should provide its best estimates for these numbers not just for the current year but on a rolling basis for the next three years.

If the Union Budget were to be formulated on an accrual rather than cash flow basis, as it is done now, principal repayments on internal debt and contingent liabilities of the central government would be included. It is too late for the government to move to accrual-based accounting for this year's Budget. However, voters should expect to see a discussion about the pros and cons of such an approach in the Economic Survey.

It would be useful if the Budget documents were to provide a summary table on central government tax revenues for the last five years in a few countries e.g. Brazil, Turkey, South Africa, China and Indonesia. We can, of course, obtain these numbers from the web-sites of the ministries of finance of these countries. We should seek this information in the Economic Survey as it would focus Indian attention on why central governments of several countries at comparable levels of development have tax to GDP ratios of around 20 per cent while for India this number is close to 10 per cent (Source: World Development Indicators - World Bank).

The Indian rupee has appreciated substantially against all major trading partner currencies in the last several years. Obviously, corporate borrowings in hard currencies are low cost if the rupee appreciates. The rupee is not on a free float with the capital account only marginally open for Indians. It is a managed float, the management of which should be the subject of close consultation between the government and RBI. This is different from the management of domestic interest rates about which government follows a hands-off approach. In this context, it is surprising that major daily newspapers have referred to India's foreign exchange reserves having reached record levels on several occasions in the last one month. It is unclear why FX reserves numbers are repeatedly quoted without reference to short-term (defined as residual maturity of one year) external debt, trade volumes or in months of import cover. The Economic Survey should address the extent of what appears to be significant rupee overvaluation, adequacy of FX reserves and associated risks in some detail.

To summarise, voters should demand that the Ministry of Finance provide Budget numbers that are easy to understand for the lay person. And, it should be one of the primary tasks of the Budget to explain the implications of the projected numbers.