7th pay commission

Apprehending that the seventh central pay commission may restore parity between different government services in terms of compensation and career progression, Indian Administrative Service (IAS) officers have shot off many letters to the department of personnel and training opposing any such move.
Apprehending that the seventh central pay commission may restore parity between different government services in terms of compensation and career progression, Indian Administrative Service (IAS) officers have shot off many letters to the department of personnel and training opposing any such move.
More than 100 letters from IAS officers of different cadres and batches have been sent to the secretary of department of personnel and training in the last few days, just a few weeks before the seventh pay commission submits its report to the government, according to two people familiar with the development.
Mint has seen a few of these letters, which highlight the deep rivalries between the cadre of various All India services.
The seventh pay commission, headed by retired Supreme Court judge Ashok Kumar Mathur, is expected to submit its report in the third week of November.
The common thread across these letters is a demand to maintain the edge that IAS officers get when it comes to pay and empanelment compared with other serviecs such as the Indian Revenue Service and Indian Police Service.
Dismissing the argument by the other services that they too qualify for recruitment after taking the same exam, IAS officers point out that they were empanelled in IAS as they performed better in the Civil Service Exams than their counterparts in the other services.
“Equality of opportunity to perform is the backbone of healthy competition but equality of rewards irrespective of one’s performance is an antithesis to the whole idea of competition,” said one of the letters.
Another letter drew parallel to the recent world championships where Jamaican Usain Bolt won the 100 metres race by 0.01 second. “Can the silver medallist now claim that he should also be given a gold medal because he lost out so narrowly?” the letter questioned.
There are around 4,500 IAS officers and a majority of the country’s top policymaking positions currently are held by officers of this cadre. Most of the posts of joint secretary and above are dominated by IAS officers.
IAS officers also pointed out that they did not bargain for pay and rank parity when they chose the service that requires them to work long hours, and often in remote locations. They added that it will be unfair if the latest pay commission and the Union government decide to apply parity among different services “retrospectively” because they did not bargain for it when they opted for IAS.
One of the two persons cited in the first instance pointed out that 99% of civil services aspirants target the prestigious IAS cadre. “But if the seventh pay commission recommends bringing all central services on par with IAS, its charm would be lost and administrative service will no longer attract the brightest talent,” he said.
To be sure, officers who belong to other services such as Indian Police Service (IPS), Indian Forest Service (IFoS), Indian Revenue Service (IRS), Indian Railway Accounts Service (IRAS) and others do not agree with this claim of their IAS counterparts having an “edge”. The officers from these services have been actively demanding pay parity with IAS and Indian Foreign Service Officers and have made representations to the seventh pay commission.
As per their arguments, an IAS or an IFS officer gets Rs.4,000-5,000 a month more than officers belonging to other services after four years of service, which goes up to Rs.15,000–16,000 per month by the 14th year and Rs.18,000-20,000 per month by the 17th year of service.
That’s because IAS and IFS officers are accorded additional increments at 3% each over their basic pay.
In its representation to the seventh pay commission, the Indian Civil & Administrative Service (Central) Association, the representative body of IAS officers, demanded that the salary structure of the officers should be comparable to private sector packages. The letter proposed benchmarking the salaries of the officers with the private sector’s salaries but with a discount to factor in the “public service” component.
“It is a matter of opinion as different services will have different opinions (about pay parity and opportunities for higher posts). But there is a sound case for reforming the colonial system (of services), which we continued with after independence. Even today, some people who are eligible for IAS in civil services examinations prefer customs and revenue for more money,” said constitutional expert Subhash Kashyap, referring to the corruption that’s associated with those services.
More than 100 letters from IAS officers of different cadres and batches have been sent to the secretary of department of personnel and training in the last few days, just a few weeks before the seventh pay commission submits its report to the government, according to two people familiar with the development.
Mint has seen a few of these letters, which highlight the deep rivalries between the cadre of various All India services.
The seventh pay commission, headed by retired Supreme Court judge Ashok Kumar Mathur, is expected to submit its report in the third week of November.
The common thread across these letters is a demand to maintain the edge that IAS officers get when it comes to pay and empanelment compared with other serviecs such as the Indian Revenue Service and Indian Police Service.
Dismissing the argument by the other services that they too qualify for recruitment after taking the same exam, IAS officers point out that they were empanelled in IAS as they performed better in the Civil Service Exams than their counterparts in the other services.
“Equality of opportunity to perform is the backbone of healthy competition but equality of rewards irrespective of one’s performance is an antithesis to the whole idea of competition,” said one of the letters.
Another letter drew parallel to the recent world championships where Jamaican Usain Bolt won the 100 metres race by 0.01 second. “Can the silver medallist now claim that he should also be given a gold medal because he lost out so narrowly?” the letter questioned.
There are around 4,500 IAS officers and a majority of the country’s top policymaking positions currently are held by officers of this cadre. Most of the posts of joint secretary and above are dominated by IAS officers.
IAS officers also pointed out that they did not bargain for pay and rank parity when they chose the service that requires them to work long hours, and often in remote locations. They added that it will be unfair if the latest pay commission and the Union government decide to apply parity among different services “retrospectively” because they did not bargain for it when they opted for IAS.
One of the two persons cited in the first instance pointed out that 99% of civil services aspirants target the prestigious IAS cadre. “But if the seventh pay commission recommends bringing all central services on par with IAS, its charm would be lost and administrative service will no longer attract the brightest talent,” he said.
To be sure, officers who belong to other services such as Indian Police Service (IPS), Indian Forest Service (IFoS), Indian Revenue Service (IRS), Indian Railway Accounts Service (IRAS) and others do not agree with this claim of their IAS counterparts having an “edge”. The officers from these services have been actively demanding pay parity with IAS and Indian Foreign Service Officers and have made representations to the seventh pay commission.
As per their arguments, an IAS or an IFS officer gets Rs.4,000-5,000 a month more than officers belonging to other services after four years of service, which goes up to Rs.15,000–16,000 per month by the 14th year and Rs.18,000-20,000 per month by the 17th year of service.
That’s because IAS and IFS officers are accorded additional increments at 3% each over their basic pay.
In its representation to the seventh pay commission, the Indian Civil & Administrative Service (Central) Association, the representative body of IAS officers, demanded that the salary structure of the officers should be comparable to private sector packages. The letter proposed benchmarking the salaries of the officers with the private sector’s salaries but with a discount to factor in the “public service” component.
“It is a matter of opinion as different services will have different opinions (about pay parity and opportunities for higher posts). But there is a sound case for reforming the colonial system (of services), which we continued with after independence. Even today, some people who are eligible for IAS in civil services examinations prefer customs and revenue for more money,” said constitutional expert Subhash Kashyap, referring to the corruption that’s associated with those services.

Till Date About 93 Per Cent of the Adult Residents in India Aquired Unique Identity – Aadhaar on Their own Volition

Till Date About 93 Per Cent of the Adult Residents in India Aquired Unique Identity – Aadhaar on Their own Volition

Till now, it is found that 93 per cent of the adult residents in India voluntarily acquired and possess Unique Identity – ‘Aadhaar’. To achieve universal Aadhaar coverage, the UIDAI is now focusing on Child enrolment, besides mopping up remaining persons.

UIDAI having issued first Aadhaar number on 29th September 2010, has till date generated more than 92.68 crore Aadhaar in just five years time. This success has been possible due to people’s voluntary quest to empower themselves with the unique identity that is portable and authenticable online anywhere, anytime on a digital platform. It has been established in no uncertain terms that nobody can fake anybody’s Aadhaar established identity on authentication. Hence, the targeted delivery of direct benefits under various welfare schemes and programmes became a dream come true with Aadhaar proving itself as a strategic policy tool for social and financial inclusion, increasing convenience and promoting hassle-free people-centric governance.

Out of the 24 States/UTs where UIDAI has been mandated to enrol and issue Aadhaar numbers, it is found that 16 states/UTs have more than 100 per cent adult population saturation with Delhi on the top with 128% followed by Himachal Pradesh (111%), Andhra Pradesh and Telangana (111%), Punjab (110%), Kerala and Haryana (109 % each), Chandigarh and Sikkim (107% each), Jharkhand, Goa and Puducherry (106% each),Tripura (105 %), Rajasthan (103%), Chhattisgarh and Maharashtra (101%); 5 states/UTs have above 90 per cent adult saturation with Andaman and Nicobar Islands (97%), Karnataka and Madhya Pradesh (96% each), Uttarakhand (93%) and Uttar Pradesh (91%); and 3 states have above 80 per cent adult population saturation with Gujarat (89%), Daman and Diu (82%) and Bihar (80%). In all in States/UTs assigned for the Unique Identification Authority of India (UIDAI), Aadhaar saturation among adult population is 98 per cent.

In other 12 States/UTs which are being covered by RGI for enrolment has an overall 76 per cent saturation with Lakshadweep (109%), Dadra and Nagar Haveli (103%), West Bengal (89%), Odisha and Tamil Nadu (88% each), Manipur (65%), Nagaland and Jammu & Kashmir (63% each), Arunachal Pradesh (50%) and Mizoram (46%). In two of the RGI States namely Assam and Meghalaya, there are some local issues which have resulted in low saturation.

It may be pertinent to mention here that there are 18 States/UTs in total having more than 100 per cent Aadhaar adult population saturation. One may wonder as to how more than 100 per cent Aadhaar can be generated in a State/UT.

That is due to the fact that the population figures are based on the Census of 2011, while Aadhaar are generated to the real population which has increased by 2015. That is, the base (divider) is taken as the population based on 2011census.

Migratory population from other states could also enroll in these States/UTs with more than 100 per cent Aadhaar adult population saturation. Actually, Aadhaar is a unique lifelong identity, which is available free of cost and any individual irrespective of age and gender and who is a resident in India and satisfies the verification process laid down by the UIDAI, can enroll for Aadhaar on a voluntary basis anywhere in the country.

Reforms need to reach the needy

Though reforms are aimed at increasing the efficiency through enhanced competition, they do not automatically result in growth. Neither does economic growth by itself translate into better social sector outcomes. A definite policy paradigm that prioritises social welfare is needed

Reforms are on everyone’s lips. Whenever growth slows down, it is blamed on the slowdown in the implementation of reforms. Despite the enormous noise made about reforms, there is no clarity on what constitutes reforms and what the impact of reforms is on growth and social sector spending.

Looking back, 1991 is an important landmark in the post-Independence economic history of our country. The country then faced an acute economic crisis, triggered by a severe balance of payments problem. But the crisis was converted into an opportunity to bring about fundamental changes in the content and approach to economic policy.

C. Rangarajan

Until the end of the 1970s, and to a large extent even in the 1980s, development was state-directed and state-driven. The government subscribed to the theory of ‘commanding heights’ which meant that key sectors of the economy were to be under state control. The private sector was kept in check through an elaborate scheme of licences and controls. In foreign trade, ‘import substitution’ was the guiding principle and this meant quantitative controls on imports and high import tariffs.

Efficiency and equity

A fundamental shift from this perception to one supporting a liberalised economy occurred in the early 1990s. There is a common thread running through the various measures introduced since July 1991 — the objective of improving the productivity and efficiency of the economy by injecting a greater element of competition. This is sought to be achieved by removing the barriers to entry and growth. This has led to the dismantling of various controls and licences. Many areas which were exclusively reserved for the state are now open to the private sector. As a consequence, the role of the state as a producer of marketable goods and services has gone down.

However, simultaneously, its role as a regulator and as a provider for public goods and services has increased, even though with respect to the provision of public goods, several mixed models are available. The touchstone of reforms is, therefore, improved efficiency which comes from improved competition. The emphasis on efficiency, however, does not exclude considerations of equity. If improved efficiency can lead to faster growth, that itself can generate larger surpluses in the hands of the government which can be utilised to increase social sector expenditures and provide better social safety nets. Much, therefore, depends on the rate of growth and how the surpluses generated are utilised.

What has been the record of India in terms of economic growth and social development in the post-liberalisation period? In the post reform period beginning 1992-93, the economy has grown at an average rate of 6.8 per cent. In the more recent period, the growth rate has been even higher. Over the decade beginning 2004-05, the average annual growth rate has been 7.6 per cent. Between 2005-06 and 2010-11, the growth rate was 8.7 per cent. Contrast this with the annual growth rate of 3.5 per cent between 1952 and 1980.

Poverty reduction

It is true that the Indian economy grew between 1980 and 1990 at 5.6 per cent. But the economy faced its worst crisis in 1991-92 and the growth rate fell to 1.0 per cent. It is extremely doubtful if, without a change in the strategy of development, growth would have picked up again.

“Liberalisation is premised on the need to create competitive markets and should be extended to all sectors. Much remains to be done in regulating the pricing of natural resources and improving the agricultural productivity”

Social development has many dimensions. One composite indicator is the behaviour of the poverty ratio. However, over years, there have been some changes in the methodology for measuring poverty. That growth has a favourable impact on the poverty ratio is seen even from recent data. The annual rate of growth of per capita income in the period between 1993-94 and 2004-05 was 4.3 per cent and the growth rate for the period between 2004-05 and 2011-12 was 6.7 per cent. The annual decline in the poverty ratio in percentage points (according to the Suresh Tendulkar committee’s methodology) was 0.74 in the first period and 2.18 in the second period. In fact, the finding that the decline in poverty was much faster in the latter period is valid irrespective of where the poverty line is drawn. Between 2009-10 and 2011-12, according to the Tendulkar Committee’s methodology, the reduction in poverty ratio was 7.9 points. According to the Rangarajan Committee’s methodology, it was 8.7 points.

Without doubt, the poverty ratio still remains high. However, what is important to note is that the faster the growth, the greater the reduction in the poverty ratio. To reduce the poverty ratio substantially and to improve our performance on other social parameters, the country needs to grow faster in a sustained way. Leaving aside these data, it is the high growth phase which witnessed the induction of several far-reaching social development programmes such as the rural employment guarantee scheme and extended food security scheme. Social and community service expenditures of the central and State governments, taken together, increased from 5.3 per cent of GDP in 1990-91 to 7 per cent of GDP in 2013-14.

GST, reforms in agriculture

Given the favourable impact of reforms on growth, what should be the focus of reforms in the coming years? The objective of reforms is to improve efficiency through enhanced competition. The introduction of the Goods and Services Tax (GST) will be a step in the right direction, as it will help in enhancing efficiency. ‘Acquisition’ is against the spirit of competition and the reach of any Land Acquisition Act must therefore, be limited. At the same time, we should avoid fixing the price of land. Farmers have become fully conscious of the value of their land. They are unlikely to sell them at throwaway prices.

There are still some segments of the industry which are subject to a number of controls of the pre-1991 type. A typical example is the sugar industry. Molasses are subject to a type of control which results in a subsidisation of the liquor industry. The basic principle underlying liberalisation is of the need to create competitive markets with minimal barriers to entry and should be extended to all sectors. Pricing of natural resources has become an issue. In the absence of competition, transparent mechanisms for fixing the prices must be followed which will be fair to both the producers and the end users.

Among the sectors that have remained untouched by reforms, the most important is agriculture. Even as much remains to be done to improve agricultural productivity through scientific research and improved dissemination of knowledge, there are areas like marketing where reforms are badly needed. The present marketing arrangements, particularly with respect to vegetables, are archaic. Barriers to movement of trade across the country must be brought to an end.

Reforms do not necessarily translate into growth. The policy framework that gave our country an annual growth rate exceeding 9 percent between 2005 and 2008 was very much in place when our economy witnessed a substantial slowdown post 2011. Reforms are at best a necessary condition for growth. They are not sufficient. The investment sentiment must be carefully nurtured. The investment climate is a function of several factors. We should not forget that non-economic factors also play a key role.

Equally, growth does not automatically result in increased social sector expenditures. There has to be a definite policy focus. Social sector expenditure must be prioritised to reflect the needs of the society. The administrative framework and delivering systems must be such as to maximise benefits. Efficiency in the use of resources is critically important. This is where good governance comes in.

Reforms, to be credible, must not only result in higher growth but also benefit all sections of society. Government must therefore, pursue a two-fold strategy: of accelerating growth through an appropriate reform agenda and deploying the surpluses generated through growth to augment social welfare.

The long battle against red tape

The reams of red tape that make life miserable for Indian entrepreneurs are being thankfully snipped. The latest rankings from the World Bank on the ease of doing business show that India has moved up 12 places since last year, or a more modest four places if the new methodology used this year is applied to the scores on business regulations in previous years. India is now at 130 among 189 countries. It is not exactly a stellar performance. But what is important is the direction of change.

The biggest strides over the past decade have been made in the ease of starting a new business in India. Some of the important reforms over the past few years have been the introduction of an online value added tax (VAT) registration system, a sharp reduction in business registration fees and, more recently, the decision to eliminate minimum capital requirements as well as doing away with the need to get a certificate to begin business operations. The last move itself has saved Indian entrepreneurs five days of trouble. A longer view tells us an important story. The days needed to start a new business in India have fallen from 127 in 2004 to 29 days in 2015.

The Narendra Modi government has done well to focus on reducing business regulations. Such administrative progress especially matters at a time when structural reforms are making little progress. Some simple changes in rules—for instance, when new companies apply for an electricity connection—have helped India move up the global ease of doing business rankings. It is also worth asking whether India is actually progressing more rapidly than the latest numbers indicate.

The World Bank uses data from the two principal commercial centres—Mumbai and New Delhi—to rank India. But the state rankings released by the government last month show that the most rapid progress in easing business regulations comes from states such as Gujarat, Rajasthan, Chhattisgarh, Madhya Pradesh and Odisha, which are outside the ambit of the World Bank report.

We have already pointed out that some of the best work has been done in making it easier for businessmen to start a new enterprise. It is high time the Modi government paid more attention to the other end of the business life cycle. Too much capital gets frozen because it is so difficult to shut down a business in India. That is why the new bankruptcy law being prepared by the government is so important to the Indian business framework.

For example, when it comes to withdrawing capital from a struggling business, India has an abysmal record in terms of resolving corporate insolvency. It takes about 4.3 years for a settlement. China does it in 1.7 years. Ireland takes a mere three months. It is the same story on the financial front. Just 25.7 cents are recovered from every dollar invested in a failed Indian business. The comparable figure in China is 36.2 cents. The star global performer on this parameter in Japan: 92.90 cents to a dollar. The haircuts in India are clearly too large.

There is clearly a lot of work still to be done on all fronts. Many countries such as Costa Rica, Uganda, Jamaica and Senegal have worked hard to ease business regulations in recent years.

However, the best country to emulate is Georgia. It has moved up the rankings in a dramatic way over the past decade. It was at 100 in the 2006 rankings. Its current position is 24. The prime minister needs to ask his policy advisers what India can learn from Georgia.

The battle against red tape has only begun. There will be a temptation to have premature celebrations. Two reality checks are in order. First, India is still very much in the bottom half of the global rankings on the ease of doing business. Second, as many as 122 of the 189 countries that the World Bank has studied have been easing the rules for doing business. That defines the challenge ahead.

Market no fix for education It has become clear that there is no difference in the learning outcomes across private and public schools

About a decade ago, the world of education was abuzz with evidence as to how “low-cost” private schools were solving India’s problems in education, and were better than public schools on all counts, including learning outcomes. It was touted as another instance of how markets could serve all needs, and feted in the pantheon of innovations for the “bottom of the pyramid”. This was a fine drug for the market addicted; it’s just that it was not true. Private schools were not delivering better learning outcomes as compared to public schools then, they don’t do so now. The claims on other things like infrastructure were equally misleading.

There were many issues with the evidence and the conclusions drawn. To mention some: extreme over-generalization from narrow studies, choice of variables and inadequately disclosed conflicts of interest of some of the evidence gatherers. Most of the so-called evidence also ignored one of the most fundamental of issues. Learning of students across two schools cannot be compared unless the children in the two schools come from similar socio-economic backgrounds. Schools have an impact on learning outcomes for sure, but so do the opportunities and environment provided by the family and close community.

The population of private school students, on average, is from socio-economically better-off families, as compared to public schools. So, unless the impact of socio-economic background is somehow accounted for, it’s not possible to simply compare learning outcomes. As better (and non-conflicted) evidence has gathered in the past decade on this matter, it has become clear that there is no difference in the learning outcomes across private and public schools, and on most other parameters, public schools are better. This is true not just for India, but across the world. I have written many times about this before, including referring to the relevant research papers.

India has now successfully provided for near universal access to elementary education. However, in the past decade, we have acted inadequately in systemically improving educational outcomes. Social and cultural factors (not educational) have driven up enrolment in private schools from about 17% to 30% of the school-going population. But, learning outcomes have not improved; in fact, they have declined on certain measures. This has not diminished the continued chanting of markets-will-fix-education mantra by the faithful. This is really the lost decade for quality in Indian education.

Addictions are hard to cure, especially when there is no intent on the part of the afflicted. So, as it has become clear that there is no difference in learning outcomes across public and private schools, the market-addicted have retreated to building another case. This is a case based on efficiency. They are triumphantly declaring that economic efficiency of private schools is much better, since they deliver similar outcomes (which they were denying till not long ago) at much lower costs; that is, again private schools are the solution. This narrative is as misleading as the one on learning outcomes. But those interested in building such narratives are not interested in reality, especially if it doesn’t fit the narrative. Let’s fleetingly look at the underlying reality.

The efficiency case rests on the lower costs of such private schools, as compared to public schools. This is driven by huge differences in teacher compensation. Private schools pay their teachers one-tenth to half of what is paid in public schools. And teacher compensation is often 70-90% of any school’s cost. Isn’t the most basic next step to try and figure out how this cost structure works and its implications?

Almost all those who become or want to become teachers do so to join public schools. The “teacher labour market” is entirely driven by the public school system. The overwhelmingly large majority of private school teachers consist of those who fail to get recruited in public schools or who are trying to get recruited. If all teacher salaries were to be at the level of that of private schools, it would demolish any incentives for qualified and capable individuals to become teachers, increasing the problems of our school education manifold.

This point hits starkly when the actual salaries in private schools are looked at, which average between Rs.3,000 andRs.9,000 per month, and the lows are at Rs.1,500 per month. The range of the average is about that of semi-skilled construction labourer; let’s not talk about the lows. Is there any case to pay such salaries to teachers? Is this what should be paid to those entrusted with the future of our children and the nation? And if actually our school system were to pay these salaries, imagine who will become teachers and what will be their lives?

Our curriculum is based on broad and deep aims of education. But even with a narrow definition of learning outcomes, both private and public schools are performing very poorly. This is the problem to tackle, without getting misled by the false argument of economic efficiency. Our energy must be invested on systemic improvement of the fundamentals; there is no other way to improve education

भारत के लिए कारोबार सुगमता सूची में शीर्ष 100 में शामिल होना असंभव नहीं'

भारत के लिए अगले साल कारोबार सुगमता की सूची में शीर्ष 100 देशों में शामिल होना असंभव नहीं है। यह बात वर्ल्ड बैंक के एक शीर्ष अर्थशास्त्री कौशिक बसु ने कही। कांग्रेस की अगुवाई वाली यूपीए सरकारों के शीर्ष आर्थिक सलाहकार रहे बसु ने माना कि मोदी सरकार ने आर्थिक क्षेत्र में जो सुधार लाए हैं, वे एक साल में ही अपना रंग दिखाने लगे । उन्होंने लघु और मध्यम आकार की कंपनियों की नौकरशाही संबंधित लागत कम करने में दिख रही रुचि को लेकर भी मोदी सरकार की तारीफ की।

वर्ल्ड बैंक के मुख्य अर्थशास्त्री और वरिष्ठ उपाध्यक्ष कौशिक ने कहा कि भारत यदि नियोजित आर्थिक सुधार बरकरार रखता है जिसमें वस्तु एवं सेवा कर (जीएसटी) और नौकरशाही संबंधी लागत कम करता है तो देश के लिए अगले साल 100 शीर्ष कारोबार सुगमता वाले देशों में शामिल होना असंभव नहीं है। बसु ने कहा, 'अब तक जो बदलाव हुए हैं, उन्हें बढ़ाया जा सके और थोड़ा मजबूत किया जा सके तो भारत के लिए अगले साल इस सूची में शामिल होना असंभव नहीं है।' 

बसु ने मंगलवार को जारी वर्ल्ड बैंक की रिपोर्ट में कहा, 'कुछ ऐसे देश हैं जो एक ही बार में 30-40 पायदान ऊपर आ गए हैं लेकिन आम तौर पर ये छोटे देश हैं। भारत जैसी बड़ी अर्थव्यवस्था के लिए यह मुश्किल है लेकिन अब तक जो हमने देखा है उसके लिहाज से असंभव नहीं है।' इस साल भारत 12 पायदान चढ़कर 142वें स्थान से 130वें स्थान पर आ गया। बसु ने इसे भारत जैसी अर्थव्यवस्था के लिए उल्लेखनीय उपलब्धि बताया जो सुधार के पहले साल में ही हासिल हुआ। 

उन्होंने कहा, 'आम तौर पर हम अन्य देशों में देखते हैं कि जब सुधार शुरू होता है तो पहले साल में गतिविधियां नरम होती हैं फिर दूसरे और तीसरे साल में तेज गतिविधि नजर आती हैं। भारत में पहले साल में ही तेज गतिविधि नजर आई है। इसलिए उम्मीद बहुत बढ़ जाती है।' बहरहाल, उन्हें लगता है कि अभी बहुत लंबा सफर तय करना है। उन्होंने कहा, 'भारत में लघु एवं मध्यम आकार की कंपनियों के लिए कारोबार सुगम बनाने के लिए नौकशाही से जुड़ी लागत कम करने में गंभीर रुचि दिखती है। बहरहाल, यह समझना महत्वपूर्ण है कि यह बस शुरुआत है। अभी लंबा सफर तय करना है।' बसु ने एक सवाल के जवाब में कहा कि तीन ऐसे क्षेत्र हैं जिनमें भारत को सुधार और पहलों की जरूरत है। 

उन्होंने कहा, 'पहले भारत को ट्रांजैक्शन कॉस्ट कम करने और नौकरशाही से जुड़ी बाधाएं कम करने की जरूरत है जो व्यक्तियों तथा लघु उपक्रमों के आड़े आती हैं।' उन्होंने कहा, 'दूसरे भारत को बेहतर बुनियादी ढांचे - सड़क, रेलवे, बंदरगाह - की जरूरत है। बुनियादी ढांचा निवेश में सुधार होता रहा है लेकिन गतिविधि बरकरार रखने की जरूरत है। और, तीसरी चीज है समावेशीकरण। भारत विविधीकृत समाज है और आपको ऐसी नीतियां चाहिए कि सभी समूहों को लगे कि वे पूरी प्रक्रिया का हिस्सा है, समाज के अंग हैं। इसमें वंचितों के लिए स्वास्थ्य और शैक्षणिक मदद भी शामिल हैं।' 

बसु ने कहा, 'समावेशीकरण अर्थशास्त्र से इतर चीज है लेकिन यदि ठीक तरीके से किया जाए तो अर्थव्यवस्था को इससे बहुत लाभ हो सकता है।' आर्थिक सुधार के संबंध में बसु ने कहा कि कई बड़े सुधार होने हैं। उन्होंने इनमें से वस्तु एवं सेवा कर (जीएसटी) को सबसे बड़ा सुधार कार्यक्रम बताया। उन्होंने कहा, 'यदि इसे अगले साल तक लागू किया जाता है तो इससे बहुत फर्क पड़ेगा। यह शुरुआत में बिल्कुल सटीक नहीं होगा लेकिन आने वाले दिनों में इसमें संशोधन और सुधार संभव होना चाहिए।' 

बसु ने कहा, 'एक और बड़ी साधारण सी बात है। भारत में मालवाहक ट्रक एक शहर से दूसरे शहर जाता है तो औसतन 60 प्रतिशत समय वह रुका होता है और ज्यादातर समय चेक पोस्ट, कागजी काम और कर एवं शुल्क अदा करने में लगता है।' उन्होंने कहा, 'जीएसटी लागू होने पर भारत में एक नियम होगा जिससे कोई चेकपोस्ट आड़े नहीं आएगा। सभी शुल्क या तो आरंभ बिंदु या गंतव्य पर अदा किए जाएंगे।' उन्होंने कहा कि आर्थिक नीति तैयार करने के लिए बहुत से कुशल पेशेवर लोगों की जरूरत है और सौभाग्य से भारत सरकार में कुछ कमाल 
पेशेवर हैं और यदि दो लोगों का नाम लिया जाए तो वे रघुराम राजन और अरविंद सुब्रमण्यम हैं।

Living in nuclear la-la-land

Last week, shortly before US President Barack Obama's meeting in Washington with Pakistan Prime Minister Nawaz Sharif, its Foreign Secretary, Aizaz Ahmad Chaudhry, acknowledged small-yield, short-range tactical nuclear weapons (TNWs) as part of his country's nuclear arsenal. In March, Lieutenant-General Khalid Kidwai, the long-time chief of Pakistan's Strategic Plans Division (which controls nuclear weapons targeting) had said the same thing in a talk in Washington; but since Mr Kidwai had recently retired, that was not official confirmation. Now Mr Chaudhary has explained that TNWs are Pakistan's counter to India's so-called Cold Start Doctrine. This doctrine, the very existence of which is denied by New Delhi, is an operational plan to punish unacceptable Pakistani provocations - such as high-casualty terrorist strikes in India - by launching swift, shallow offensives into that country with tank-heavy forces.

Pakistani military planners know that, given India's powerful tank forces, they would be spread too thin to halt India's Cold Start thrusts. Inevitably, many thrusts would make headway, capturing Pakistani border towns and creating the impression of an Indian victory. The rapidity of Cold Start offensives would overtake the deterrence time lines that had prevailed earlier. Now Indian war objectives might be met before Pakistan's General Headquarters (GHQ) at Rawalpindi could signal to New Delhi - halt, or we will cross the nuclear threshold, using traditional nuclear weapons of 15-20 kilotonnes (KT) or more, delivered by missiles over hundreds, even thousands, of kilometres. GHQ tightly controls these "strategic" weapons, so it takes time to ready and launch them, providing India's offensive forces the time to achieve their ends.

To speed up their nuclear response, Pakistan developed TNWs - relatively small nuclear weapons, usually below 2-3 kilotonnes, which are launched at battlefield targets like tank forces, at ranges of 60-100 kilometres, through short-range missiles. Due to the distances between the National Command Authority in Islamabad and the India-Pakistan border, TNWs would have to be located near the border and placed under local corps commanders. This "de-centralisation" renders TNWs vulnerable to theft or, even unauthorised use by renegade commanders. While Pakistan must be developing preferential access links (PALs) for its TNWs - software codes to restrict their operation to select commanders - these would take time to implement and perfect. And, in the confusion of a possible battlefield debacle, TNWs could well fall into the hands of unauthorised persons.

Such doomsday scenarios create the insecurity and uncertainty that suit Pakistan. Islamabad hopes that by posing a clear and present danger, it can force Washington's hand, extracting concessions - like a nuclear pact - that would allow Islamabad spin-doctors to claim Pakistani equivalence with India, a cherished strategic objective. Mr Sharif implicitly justified his TNWs by blaming a "hostile" India for forcing his military's hand. Addressing the US Institute of Peace, Mr Sharif declared that India's "dangerous military doctrines… will compel Pakistan to take several countermeasures to preserve credible deterrence." Nobody doubted he was talking about TNWs.

New Delhi has little control over Pakistan's decision to deploy TNWs. Nevertheless, Indian policymakers must now incorporate in our nuclear doctrine a realistic response to TNWs. Our nuclear doctrine - issued as a "draft nuclear doctrine" in August 1999, and modified slightly in a gazette notification on January 4, 2003 - pledges that India "will not be the first to initiate a nuclear strike, but will respond with massive retaliation should deterrence fail."

This implies India's default response to a Pakistani TNW strike - even against Indian troops on Pakistani soil - would be "massive retaliation", i.e. striking counter-value targets (towns and cities) in Pakistan with the full weight of India's arsenal. However, India's massive response would only damage, not destroy, Pakistan's nuclear arsenal. According to the well-respected Arms Control Association, India and Pakistan have about 120 nuclear weapons each. Even if India's "massive retaliation" destroys half of Pakistan's arsenal (and there is little surety of that), India would then have to absorb Pakistan's "second-strike" response, which would consist of about 60 nuclear bombs on Indian towns and cities. This would be an unimaginable blow. Yet Indian planners blithely go about their day as if the game would surely end with India's massive first strike.

Furthermore, few outside Lutyens New Delhi swallow the notion that India would respond to a single TNW by reducing Pakistan to a smoking ruin (albeit one that would shortly afterwards reduce India to the same state). Deterrence is a mind-game that one side quickly loses if the opponent does not believe that a threat will be executed.

Former Israeli Air Force chief, General David Ivry, explains deterrence through a formula - "Power (P) x Intent (I) = Deterrence (D)" - which regards deterrence as the product of two factors. The first, i.e. power, is not the actual capability of the deterring country (India), but what the country being deterred (Pakistan) believes its capability to be. If Pakistan believes, rightly or wrongly, that Indian missiles and aircraft cannot deliver nuclear weapons to Pakistani targets, the P in the equation will be zero, and deterrence will fall to zero too. The second factor, i.e. intent, represents the deterring country's "political and military willingness to use force". Regardless of India's actual strength and intent, if Pakistan believes that Indian policymakers do not have the stomach for obliterating Pakistan with a devastating "massive retaliation", the factor D, i.e. the deterrence value of the Indian arsenal again falls to zero.

That is why Israel has retaliated swiftly and overpoweringly to every provocation: pre-emptively smashing three Arab air forces in the Six Day War of 1967, rescuing hostages from an El Al airliner hijacked to Entebbe in 1976, pre-emptively destroying an Iraqi nuclear reactor at Osirak in 1981, taking out Syrian anti-aircraft missile sites in the Bekaa Valley in the Lebanon War of 1982, avenging the killing of three Israeli civilians in 1985 with punitive air-strikes on the Tunis headquarters of the Palestine Liberation Organisation, and striking and destroying a suspected nuclear facility in the Deir-ez-Zor region of Syria in 2007. Given Israel's willingness, even eagerness, to use pre-emptive or retaliatory force, its I-factor is extremely high, raising deterrence.

In contrast, New Delhi's forbearance pegs its I-factor close to zero. India's military was poised on the border for 10 months after Pakistani terrorists attacked India's parliament building in 2001, but New Delhi desisted from using force. Similar restraint was displayed after a terrorist squad sailed into Mumbai from Pakistan and killed 165 people in the infamous 26/11 attacks. New Delhi also shrank from retaliating against Pakistan in 1993; after 257 people were killed in serial bomb blasts in Mumbai; and in 2006, when a series of bombs in suburban trains in that city killed 187 Indian citizens. The last time India used force against Pakistan was in 1999, when troops from that country sought to change the border in Kargil.

Without passing judgment on such restraint - forbearance is often advisable - New Delhi's remarkable consistency in avoiding the use of force subtracts credibility from any Indian doctrine of massive retaliation. Pakistan's formal announcement of TNWs is a reminder for the Indian doctrine to incorporate flexible retaliation, which increases our planners' options, and complicates the opponents' calculations.