Thursday, May 26, 2011

An Indian teenager in NYC

When I read the news of an Indian diplomat’s daughter Krittika being handcuffed and kept in a New York jail for 24 hours on suspicion of sending anti-Jewish hate mail to her schoolteachers, the news really didn’t sink in. Nor did I realize, that she is the daughter of an old friend of mine, Debasish Biswas, a Barrackpore boy, who had joined our foreign service and had served at various missions with diligence, intelligence and a genuine ever ready smile.

A teenage Indian girl sending anti-Jewish hate mails? A diplomat’s daughter being handcuffed and hauled over to keep company with `stars’ from New York’s red light district and petty criminals from Bronx, merely on suspicion that she sent some stupid mails? It seemed like one of National Geographic’s Jailed Abroad TV show series.

India is possibly the only major country, with no record of anti-Jewish hate crimes. Indians don’t even have any anti-Jewish jokes in their repartee! Jews have lived in India since 500 BC and have produced outstanding Indian leaders – from Gen JFR Jacob, the then chief of staff of India’s Eastern Army who plotted the Army’s lightning 14 day advance to help liberate Bangladesh in 1971 to David Sassoon, the 19th century business tycoon and philanthrophist to Pearl Padamsee, Mumbai’s famous theatre personality and well known poet Nissim Ezekiel.

Calcutta, of which Barrackpore is an extended suburb, has a special soft corner for Jews, who have among other things, run jute mills, the famous New Market bakery – Nahoum, almost an institution for Anglophile Bengalis besides prestigious schools and colleges. A girl from this milieu, could hardly be the type who would bombard her Jewish teachers with hate mails!

USA of course has had its more than fair share of anti-Jewish hate crime, despite having earned the credit of liberating Jewish survivors of Germany’s holocaust. Statistics released by the FBI for the year 2009, shows that 70 per cent of America’s hate crimes are committed against Jews. White American young men and women are the mostly likely culprits.

It turned out that the school authorities at John Browne High School where Krittika studied and the New York police had acted not only in haste but without doing basic investigation. The school later discovered the mails had been sent by a fellow student of Chinese origin!

The `Big Apple’ police force, which hauled Krittika, perhaps rightly argued that a diplomat’s family did not have immunity in criminal cases. However, the point that one can’t brand a person, especially an impressionable teenager, as a criminal and treat her as one, without checking out facts, seems to have been given a go by in the zeal to rope in a brown skinned `Jew hater’!

Teachers and school administrators who should have done an internal investigation before going to the police and treated the young lady, who was their charge, with far more compassion, obviously also need to do more than introspection.

The story unfortunately does not end there. The student who sent the hate mails has neither been expelled, punished or jailed for the crime for which Krittika was wrongly picked up. Perhaps he is a rich and powerful man’s son. Perhaps, the school has introspected and decided they should not mar any other teenager’s reputation and psyche even if he richly deserves a lesson in good behaviour !

Krittika and her father have rightly decided that New York City authorities need to be taught a lesson and have filed a compensation case for $ 1.5 million against the city. Lets see how a city famous for its statue of liberty and for having sheltered millions of people from all races copes up with this challenge to its reputation.

Friday, May 20, 2011

Bengal: Babus or Entrepreneurs

Many say that Bengal is a land of babus, middle class people who like me would prefer to work for others. The true Bengali would protest this is but a myth, while most outsiders would say this is more than the truth.

The reality is that only a small percentage of Bengalis actually do babu-giri. Lets go back in time and see what used to be and then compare it with what is and could be.

During the Pala and Sena period, Sonargaon was one of the many centre’s of Bengal’s flourishing trade, industry and high finance which had mercantile links with the Far East and of course with ports of the sub-continent.

There is enough evidence of entrepreneurship and trade prior to that with ports at Tamluk and in the Sunderbans.

During the Mughal period, trade did pass to a large extent into the hands of immigrant Marwari traders who followed Raja Man Singh. The Raja of Jaipur successfully invaded Bengal on behalf of Emperor Akbar, defeating Raja Pratapaditya, Isha Khan et all. However traditional Bengali businessmen from the Basak, Seth, Saha etc. communities remained strongly entrenched. The best bit was that Bengal being a cosmopolitan trading hub integrated the immigrants quickly and created a single entreprenuerial/trading class.

Many not so well off or dispossessed landlords (who had lost land due to wars/the Padma or Ganges changing its course/political intrigue at court/debt) joined business in the 17th and 18th century as `agents' of the East India company and traded in salt, textiles and indigo. The Sens of Berhampore were an example of this. Unfortunately most of these new businessmen lapsed into being landed gentry when the permanent settlement of Bengal came into being, by buying zamindaris.

During the 19th and early 20th century Renaissance period, Bengali bhadralok entrepreneurs set up steamship companies, sugar mills, tea gardens, chemical companies (Bengal Chemicals, Calcutta Chemicals etc.). At least one of them, Sir R N Mukherjee, became a steel and manufacturing tycoon whose wealth rivaled that of the Tatas and Birlas.

Post partition, many of the new metal forges, coach body building units etc. were set up by refugee gentlemen who had some money and an urge to get back their socio-economic status. The 1960s and 1970s saw CPM supported labour militancy forcing many mills and factories to down shutters. While gun-fights between Naxal, CPM, Congress cadres created terror in the minds not only of ordinary people but also potential investors.

A disastrous policy passed by Mrs Indira Gandhi’s cabinet in the 1970s, under the influence of an early `Bombay Club' of business lobyists, which equated the price of steel and coal all over India, spelled doom for East India’s metal based industries. Many factories in Howrah and Hooghly shut down in the wake of this policy. As did Rohtasnagar in Bihar, turning into a ghost town.

From 1971 onwards, the then Chief Minister Siddharth Shankar Ray’s battle against Naxalites degenerated into indiscriminate sweeps against educated boys studying in Bengal’s best colleges and engineering schools, which often ended in extra-judicial mass killings. Those who were saved from this turbulence were often spirited out of Bengal for a safer life outside.

In the late 1970s, when peace returned. Things could have been different. A flowering of entrepreneurship which many states witnessed during that period by-passed Bengal. There were many reasons for it. Not the least, that a generation of bright minds had been crushed in the name of fighting ultras.

But the real fault lies with the leaders of that time. They did not take any steps to build entrepreneurship. Business grows only with state patronage. It does not grow in a vacuum.

Where Bengal went wrong was in not using the West Bengal Industrial Development Corporation to develop a cadre of first generation educated entrepreneurs during the 1970s through 2010, when most other states did exactly that. WBIDC under Jyoti babu and Buddha babu lent only to traditional business houses and hardly to new entrepreneurs. The industrial development corporations of all other states did just the opposite and took care to hold the hands of young businessmen they set up, to ensure they went beyond incubation.

On the plus side, Bengal, espcially Calcutta or Kolkata as it is now called, remains a cosmopolitan place. It does not discriminate between an entrepreneur who speaks Bengali at home from someone whose mother tounge is Sindhi, Gujrati, Marwari, Urdu, Oriya, Tamil or English or French. Such a medley of cultures always retains the potential to throw up entrepreneurial spirits and choices.

Where Bengal can go right is by building this cadre now. Take people who have ideas, the education and possibly experience to set up enterprises and help them flower by giving them loans, holding their hands, by fast tracking their projects across government departments and by giving them the infrastructure and environment they need. While doing so, take care to retain the cosmopolitan flavour of Calcutta.

Let a thousand entrepreneurial flowers bloom, instead of a single giant industrial house. It will create more jobs and spread more backward and forward linkages than a single car factory could.

Saturday, May 14, 2011

Bengal - Why did the Red Fortress crumble: Economy

Now that Mamata Bannerjee has led the Trinamool-Congress combine to a landslide victory in Bengal. Its time to look back and see what went wrong with the Red Fortress to the extent that it crumbled under an onslaught by a rag-tag party.
People were of course, unhappy with minutiae of intervention by left cadres in their everyday life, by the fact that one had to be a party sympathiser at least for form's sake to qualify for jobs, business contracts and what have you. This unhappiness turned into palpable anger in rural areas which had resiliently stayed Red even while urban West Bengal had turned to Mamata more than a decade back, when land acquisition threatened to turn sharecroppers (whom the Left had made permanent land tiller with protected rights) into land oustees without compensation.
But beyond this there was unhappiness all around about how `Golden' Bengal had been turned into an industrial wasteland, with an economy in shambles, little or no job creation, poor roads, a weakened educational system and social upheavals by continuous inward and outward migration.
The Macro StoryLets just take the case of how West Bengal fared compared to the rest of the country since the economy was opened up two decades back. The visible changes in the economic juggernauts of Gujarat, Haryana, Tamil Nadu and Karnataka – spanking new highways, swank airports, bustling factories certainly make Calcutta’s malls, Salt Lake’s call centre’s and the Kona expressway pale in comparision.
But the real tale is hidden in the figures which data miners have hoarded in a report prepared for the deputy chairman of the planning commission. Between 2002 and 2009, the state, grew by 6.66 per cent, just below the national average of 7.83 per cent and well below the rates posted by rivals like Gujarat (11.19 per cent) which took away the Tata Nano project from the eastern state and Maharashtra (8.70 per cent). Even poorer neighbours –Orissa and Bihar posted faster growth rates at 9.34 per cent and 9.80 per cent.
So what really ailed Bengal? Economist Ashok Desai says “while the liberalization since 1991 (which boosted India's foreign trade) helped maritime states like Tamil Nadu and Maharashtra grow, West Bengal which has poor seaports could not catch up.” Others feel poor political infrastructure, red tape, inability to create a home-grown entreprenuer class and belated understanding on the part of Left that it could take advantage of a phase of liberalisation which they had so vehemently criticised to better Bengal, stopped growth from being a happening story in the state. This despite, rules being changed to end Socialist era laws which equated iron and coal prices all over the country, which gave Bengal's forges, foundries and factories, a huge advantage over the rest of the country.
Industry in the state which once boasted of being India’s premier industrial hub just could not play catch up with faster growing rivals, while farm growth which was substantially higher than the national average could never earn enough money to make the state a high flier.
Average State GDP Growth rate (%)
(2002-2009 )
Andhra Pradesh 8.20
Bihar 9.8
Gujarat 11.9
Haryana 9.28
Karnataka 8.10
Maharashtra 8.70
Orissa 9.34
Tamil Nadu 7.33
West Bengal 6.66
All India 7.83
Source: Databook for DCH: 28 March 2011 (Planning Commission)

Red in the Account Books
West Bengal can best be described as a classic middle class debtor's case - it can't climb out of debt and yet is not indebted enough to be termed bankrupt. The only problem is that the state is not a middle class individual but a major state government. Its total debt by the year 2011 has reached an astounding Rs 1,98,195 crore or nearly 41 per cent of  its state GDP. This is the third highest debt run up by any state in the country, but the other two states – Uttar Pradesh and Maharashtra - which have larger debts also have far larger economies and larger revenue streams to pay-back their loans.
West Bengal on the other hand, runs the risk of having to borrow to pay the interest pay-outs on its huge debt mountain. It managed to raise taxes worth just a tad over Rs 20,000 crore in the financial year gone by, just a little more than what it needs to pay simple interest on its loan.
Its total income during the year was Rs 47,572 crore, including transfers from the centre while its expenses were a whopping Rs 69,895 crore, leaving a fiscal deficit of Rs 22,323 crore, far more than the money it earns from taxes. Successive internal memos prepared by the Planning Commission have warned "the state seems to be very close to a debt trap." “The state will have to either raise more revenues or depend on larger central dole  to set its house in order,” said D.K.Joshi, chief economist with CRISIL.
Said Plan panel advisors who have been studying West Bengal’s case for long: “The whole problem is that the state is neither a basket case nor a top notch performer. States like West Bengal will always be demanding more money as they feel they can catch up with others doing well with just that extra effort. But the real problem is that extra money borrowed or begged from the Centre may not always be used to better one's state but merely to pay a huge army of babus or to pay back older debts.”