AH, IT’S time for Indians to indulge in their four-year itch again. It’s once again time for that great, once-in-four-years festival called “general elections”. Some starryeyed call it a celebration of democracy, some see it as an opportunity to escape the long arm of the law and gain respectability, some see it as a time to forge new alliances, and then some see it as an opportunity to extract some fresh commitments from politicians when they are at their most vulnerable.
While in this high season of corporate governance, the government-in-power’s balance of achievements and failures is expected to come under close scrutiny. But, the one other balance sheet of greater importance will escape inspection. The elections have given the government an escape route — it will now have to present only an interim budget, which is a vote-on-account asking Parliament for funds to tide over all the must-spend expenses till the next government takes over and presents a full budget. So, this government can only use the VOA opportunity to tom-tom its achievements, advertise its success with the economy (before the current downturn upset all their plans) and make some noises about how it cares for the poor, the farmers, the marginalised (in all its forms — gender, religion and caste). With the Election Commissioner watching hawk-eyed, it cannot actually implement new taxes, though it can announce new economic measures. While presenting the interim budget in 1991, former finance minister Yashwant Sinha (as part of the Chandrashekhar government) had, for the first time in Indian economic history, announced the government’s intention of divesting its equity in public sector units.
This government probably doesn’t need to do much about indirect taxes since it has already implemented some tax cuts through its two stimulus packages. But, surely, the finance minister should be allowed to make some course corrections where gross anomalies exist. Here is the Mocha Master’s list.
The government has loaded one cess after another on the income tax paid by individuals. This is taxation through the backdoor, using a surreptitious route to milk the most under-represented political class. This also exhibits how the government, unable to stem the rot in its finances, is passing on its burden to the salaried class. The education cess, for instance, is the government’s admission that it is squandering away the tax-payer’s contributions and needs more funds to fulfil its basic duties. In the debate over stimulus packages in the US, some economists feel that tax cuts might achieve much more in reviving the economy than throwing money into one project after another. The Indian government could examine the option of removing the cesses as one of the viable alternatives for firing up the economy.
Some sanity might also be required in the levy of service taxes. No one is complaining about the basic concept of service tax. If excise duty can be levied on manufacture of goods, then service tax is also logical, especially when services contribute to a good 50% of GDP. But, just like small-scale units enjoy tax breaks, there should be some service tax relief for home offices, to nurture entrepreneurship. In these times of economic upheaval, the government will have to devise some strategy that encourages entrepreneurship, especially one that supports people who have been either laid off from their jobs or those who opt to work from their homes. And, service tax breaks for small-officehome-office can be a great booster shot, even if they are for a limited period.
The time has also come to think of a maximum retail price for some services. Just like there is MRP for a wide variety of goods, which restricts the exploitation of the consumer in the hands of the manufacturerwholesaler-retailer nexus, some kind of a similar arrangement is required for services also. For instance, take the airline industry. Although many of the private airlines are advertising low fares, these are deceptive. For instance, if a private airline advertises a Rs 2,500-fare for Mumbai-Bangalore, the actual money paid by the passenger works out to Rs 5,500.
Out of the hidden difference of Rs 3,000, a major component is scooped up by the airlines as something called “fuel surcharge”, which was imposed when oil prices had shot up. Now that the prices are down, the airlines are reluctant to pass on the benefits to passengers.
Utilities, especially power suppliers, too have hidden costs. Today your power consumption might be just worth, say, Rs 2,800. But, your total bill might end up being as high as Rs 4,500 on account of various cesses, and cross-subsidies loaded on you. For instance, a typical Mumbai electricity bill includes the following items, over and above the “energy charges” which is based on your consumption of electricity — standby charges, cost of expensive power, fixed charges, fuel adjustment charges, electricity duty and tax on sale of electricity.
If the government is serious about reviving the economy, the time might be right to review some of the hidden taxes, charges, levies that turn the economy into a highcost island. The start could be made with some of the cesses on income.
Courtesy: The Economic Times
Monday 26 January 2009
Monday 19 January 2009
Jai Ho! It’s Time for Bollywood to Globalise
Danny Boyle’s Slumdog Millionaire seems to have left Bollywood redfaced and indignant. At least, that’s the impression one gets after hearing all the noises emerging from this sprawling, and largely unorganised, industry. But seen in the broader perspective of India’s journey into globalisation, it somehow seems to make some sense. And, seems somewhat predictable too.
Marque voices and some leading purse managers in the industry have been grudging in their praise of the movie, particularly after it swept the gongs at two global film award ceremonies, the Critics’ Choice Awards and the Golden Globe Awards, and looks well on its way to sweeping many other honours. The carping is about how the movie exploits Mumbai’s slum life and its squalor. This complaint is not new. Bollywood has often taken exception to renowned Indian film directors winning awards overseas for depicting real Indian life, as distinct from the reel life that launched many spurious dreams.
Broaden the debate a bit and it has an uncanny similarity to the voices one heard when India embarked on its economic reforms and liberalisation programme. Home-grown Indian companies, till then cocooned and sheltered by the governments’ protective policies, initially formed informal clubs to lobby for a continuation of the old policies or for special preferential treatment to Indian companies. Later, when that didn’t help, they pooh-poohed the chances of any foreign investor succeeding in the Indian market. Their common refrain: they do not understand the Indian market, they do not understand the granularity of different cultural strands that together make up the complicated Indian tapestry, or worse, they did not understand the “environment”. The last one is obviously a euphemism — what it meant was that the multinational corporations didn’t know how to finesse the Indian political-bureaucratic nexus to their own advantage, thus giving the Indian companies an inherent edge.
How wrong all those assumptions have been. First, many smart Indian promoters sold away their brands and companies to MNCs as soon as the gates were flung open, thus inviting criticism from some of the more patriotic industrialists. Then, most of the foreign investors found willing joint venture partners among Indian companies, eager to lend their names for a onetime fee. These “invading” companies also were able to “understand” the Indian market better by hiring the relevant local talent, at times by offering salaries and working conditions far better than the Indian companies. The same tactic was also used for massaging the environment.
All this is also symptomatic of Corporate India’s reluctant acceptance of the phenomenon known as globalisation. In the end, though, parts of India Inc have come out smiling. That’s because the inherently strong companies realised competition is a way of life and greasing palms cannot become an organisation’s core competence. In fact, many Indian companies also took advantage of globalisation to acquire brands, companies and markets overseas.
Cut to Bollywood, which also seems to be in the early phases of denial. Slumdog Millionaire probably represents, in some ways, the initial stages of the entertainment industry’s globalisation pangs. But, globalise it must, whether it is kicking or screaming. Bollywood is suffering from a valuation crisis, especially after the market meltdown. Many home-grown studios — which opted for a corporate structure to facilitate access to cash and to leverage the euphoric bull run — have now become easy pickings for foreign studios. Most of these studios had earlier promised foreign studios either joint projects, or even joint ventures with substantial stakes. Unable to wriggle out of these commitments, many of these studios are bound to lament - somewhat true to form — the erosion of Indian cultures, ethos and values.
Slumdog Millionaire also represents a different way of doing things, in sharp contrast to Bollywood’s entrenched practices. Take casting. The film crew scoured countries and cities to search for the right faces; the boy, in fact, is a non-resident and the girl is a totally new face. The film producers and director even auditioned the young boy and girl together to see if they had the right chemistry on screen. In Bollywood, the leading man is decided mostly on a whim and a fancy, long before the screenplay is finalised. If it’s a big budget film from a well-known studio, the lead role is then usually reserved for the son of the studio promoter. In many cases, the leading man also dictates the choice of the female lead, script be damned.
In this case too, as was the case with Indian industry, the foreign studio has found Indian talent and financiers willing to risk their gifts and their finances on Danny Boyle because he comes with a past, a successful track record of having directed some very cutting edge cinema. Danny Boyle’s nationality — or his lack of Indian roots — never made any difference. What mattered was his craft.
There are many Indian companies which are happy to cater to only a market niche and do not desire global markets, but are eager to run their companies on global best practices. Likewise, there will be cinema that will cater primarily to Indian audiences but will be produced by implementing global best practices. And, that’s going to make all the difference.
Courtesy: The Economic Times
Marque voices and some leading purse managers in the industry have been grudging in their praise of the movie, particularly after it swept the gongs at two global film award ceremonies, the Critics’ Choice Awards and the Golden Globe Awards, and looks well on its way to sweeping many other honours. The carping is about how the movie exploits Mumbai’s slum life and its squalor. This complaint is not new. Bollywood has often taken exception to renowned Indian film directors winning awards overseas for depicting real Indian life, as distinct from the reel life that launched many spurious dreams.
Broaden the debate a bit and it has an uncanny similarity to the voices one heard when India embarked on its economic reforms and liberalisation programme. Home-grown Indian companies, till then cocooned and sheltered by the governments’ protective policies, initially formed informal clubs to lobby for a continuation of the old policies or for special preferential treatment to Indian companies. Later, when that didn’t help, they pooh-poohed the chances of any foreign investor succeeding in the Indian market. Their common refrain: they do not understand the Indian market, they do not understand the granularity of different cultural strands that together make up the complicated Indian tapestry, or worse, they did not understand the “environment”. The last one is obviously a euphemism — what it meant was that the multinational corporations didn’t know how to finesse the Indian political-bureaucratic nexus to their own advantage, thus giving the Indian companies an inherent edge.
How wrong all those assumptions have been. First, many smart Indian promoters sold away their brands and companies to MNCs as soon as the gates were flung open, thus inviting criticism from some of the more patriotic industrialists. Then, most of the foreign investors found willing joint venture partners among Indian companies, eager to lend their names for a onetime fee. These “invading” companies also were able to “understand” the Indian market better by hiring the relevant local talent, at times by offering salaries and working conditions far better than the Indian companies. The same tactic was also used for massaging the environment.
All this is also symptomatic of Corporate India’s reluctant acceptance of the phenomenon known as globalisation. In the end, though, parts of India Inc have come out smiling. That’s because the inherently strong companies realised competition is a way of life and greasing palms cannot become an organisation’s core competence. In fact, many Indian companies also took advantage of globalisation to acquire brands, companies and markets overseas.
Cut to Bollywood, which also seems to be in the early phases of denial. Slumdog Millionaire probably represents, in some ways, the initial stages of the entertainment industry’s globalisation pangs. But, globalise it must, whether it is kicking or screaming. Bollywood is suffering from a valuation crisis, especially after the market meltdown. Many home-grown studios — which opted for a corporate structure to facilitate access to cash and to leverage the euphoric bull run — have now become easy pickings for foreign studios. Most of these studios had earlier promised foreign studios either joint projects, or even joint ventures with substantial stakes. Unable to wriggle out of these commitments, many of these studios are bound to lament - somewhat true to form — the erosion of Indian cultures, ethos and values.
Slumdog Millionaire also represents a different way of doing things, in sharp contrast to Bollywood’s entrenched practices. Take casting. The film crew scoured countries and cities to search for the right faces; the boy, in fact, is a non-resident and the girl is a totally new face. The film producers and director even auditioned the young boy and girl together to see if they had the right chemistry on screen. In Bollywood, the leading man is decided mostly on a whim and a fancy, long before the screenplay is finalised. If it’s a big budget film from a well-known studio, the lead role is then usually reserved for the son of the studio promoter. In many cases, the leading man also dictates the choice of the female lead, script be damned.
In this case too, as was the case with Indian industry, the foreign studio has found Indian talent and financiers willing to risk their gifts and their finances on Danny Boyle because he comes with a past, a successful track record of having directed some very cutting edge cinema. Danny Boyle’s nationality — or his lack of Indian roots — never made any difference. What mattered was his craft.
There are many Indian companies which are happy to cater to only a market niche and do not desire global markets, but are eager to run their companies on global best practices. Likewise, there will be cinema that will cater primarily to Indian audiences but will be produced by implementing global best practices. And, that’s going to make all the difference.
Courtesy: The Economic Times
Monday 12 January 2009
Spot A Corporate Scam
FOR some it’s clearly winter, for those spoiling for a fight with neighbouring countries it’s a time for bellicosity and for many it’s a period of abstinence and renouncement. But, for Corporate India, this is, undeniably, a season for corporate governance. The nice-sounding, and sanctimonious, phrase moves from conference halls to board rooms this month as Satyam occupies business mindspace, boggles the popular imagination and becomes the new “shock-and-awe” item of the season.
The term ‘corporate governance’ tends to make an appearance and leave a strong impression mostly during times of market crashes and slow economic activity. During go-go times, no one cares. Even the Satyam skeletons would have stayed firmly locked up, rattling some consciences occasionally.
But, this time, long faces are discussing the issue seriously on television channels, equity analysts are saying they knew all along that India Inc was seriously in deficit and many company promoters are looking over their shoulders every so often.
Does this end here? Hopefully. But, if one is to hear all the doomsday artists and professional corporate watchers, this could just be the beginning of a long procession of companies waiting to be outed. So, here’s a favourite parlour game: how to spot and detect the next wrong ones. Look out for these traits:
* This one is a sure give-away. Be suspicious of companies suddenly launching on unrelated diversifications with great gusto. For instance, a chemicals processing company starting a floriculture project is a sure sign that it is planning some land-related scam or is using up shareholder’s money for a hare-brained project to be launched by the promoter’s son.
* Beware of companies which have huge related-party transactions. This is one old (and successful) model of siphoning off cash from the company. It is also a not-sosubtle way of ‘inflating’ sales. About 50% of one large, and listed, real estate company’s sales are to a group company (which stays resolutely private), but the money to be received from the same company somehow does not jive with the sales number. In this way, the listed company uses public money to build projects, sells them to the private company, shows pumped-up sales, but the buyer (the private company) is over time shown as incapable of paying up, the receivable is written off from the listed company and when the sales eventually happens, the shareholders of the private company gain the most. Cost is borne by the public, but profits stay with only the promoters.
* Keep your antennae up for companies which suddenly change their accounting policies. Many companies suddenly change either their depreciation policy or even their revenue recognition policy. A change in the depreciation policy allows many companies to either reduce their actual losses or helps balloon profits. Many corporates also suddenly change how they acknowledge revenue accretion. In many cases, this helps show a sudden increase in sales, resulting in better valuation on the stock markets.
* Another red flag: Companies that suddenly show a dramatic jump in sales, when nothing extraordinary has happened in the economic environment to justify the spurt in growth. One media company which went public a few years ago, showed a spectacular jump in its total revenue a couple of months before filing its prospectus. Recently, another technology company showed a 900% jump in sales over just six quarters ended September 2008! People should be beating a path to this company’s door for some clues on how to locate undiscovered multitudes of buyers.
* Many companies, during good times, entered into some exotic foreign exchange derivative contracts, hoping to punt on the movement of currencies they had no clue about, such as the Swiss franc. In good times, all’s acceptable. But, come crunch time and all these derivative contracts have now shrunk in value. But, the companies that bought these fancy products are yet to recognise the forex losses on their profit and loss accounts. It’s a bit like a time bomb ticking away in the accounts. Some companies have disclosed their exposure, but are refusing to provide for it, hoping it will go away one day like a bad dream.
* Ditto is the case with many companies which had loaded up on forex debt, like a famished urchin landing up at a free, five-star buffet. Today, they are shying away from showing the losses on these debts, especially since the rupee-dollar has moved adversely from the time they had contracted the debt. Expect to hear more about a fancy term called Accounting Standard 30 in the coming days.
So, what’s the lesson from this time? Sorry to sound cynical, but as long as the system stays what it is, there might be just a few more revelations, and then it’s back to business as usual. C’mon, we’re all forgetting the basics. Can you ask people to keep a tight rein on greed in a market that’s asking everybody to buy that fancy yacht, or that bejewelled watch, in the space of a heart-beat? Perhaps, it’s better for all of us if we were to accept this silver-tongued beast as an irrefutable part of our lives.
The term ‘corporate governance’ tends to make an appearance and leave a strong impression mostly during times of market crashes and slow economic activity. During go-go times, no one cares. Even the Satyam skeletons would have stayed firmly locked up, rattling some consciences occasionally.
But, this time, long faces are discussing the issue seriously on television channels, equity analysts are saying they knew all along that India Inc was seriously in deficit and many company promoters are looking over their shoulders every so often.
Does this end here? Hopefully. But, if one is to hear all the doomsday artists and professional corporate watchers, this could just be the beginning of a long procession of companies waiting to be outed. So, here’s a favourite parlour game: how to spot and detect the next wrong ones. Look out for these traits:
* This one is a sure give-away. Be suspicious of companies suddenly launching on unrelated diversifications with great gusto. For instance, a chemicals processing company starting a floriculture project is a sure sign that it is planning some land-related scam or is using up shareholder’s money for a hare-brained project to be launched by the promoter’s son.
* Beware of companies which have huge related-party transactions. This is one old (and successful) model of siphoning off cash from the company. It is also a not-sosubtle way of ‘inflating’ sales. About 50% of one large, and listed, real estate company’s sales are to a group company (which stays resolutely private), but the money to be received from the same company somehow does not jive with the sales number. In this way, the listed company uses public money to build projects, sells them to the private company, shows pumped-up sales, but the buyer (the private company) is over time shown as incapable of paying up, the receivable is written off from the listed company and when the sales eventually happens, the shareholders of the private company gain the most. Cost is borne by the public, but profits stay with only the promoters.
* Keep your antennae up for companies which suddenly change their accounting policies. Many companies suddenly change either their depreciation policy or even their revenue recognition policy. A change in the depreciation policy allows many companies to either reduce their actual losses or helps balloon profits. Many corporates also suddenly change how they acknowledge revenue accretion. In many cases, this helps show a sudden increase in sales, resulting in better valuation on the stock markets.
* Another red flag: Companies that suddenly show a dramatic jump in sales, when nothing extraordinary has happened in the economic environment to justify the spurt in growth. One media company which went public a few years ago, showed a spectacular jump in its total revenue a couple of months before filing its prospectus. Recently, another technology company showed a 900% jump in sales over just six quarters ended September 2008! People should be beating a path to this company’s door for some clues on how to locate undiscovered multitudes of buyers.
* Many companies, during good times, entered into some exotic foreign exchange derivative contracts, hoping to punt on the movement of currencies they had no clue about, such as the Swiss franc. In good times, all’s acceptable. But, come crunch time and all these derivative contracts have now shrunk in value. But, the companies that bought these fancy products are yet to recognise the forex losses on their profit and loss accounts. It’s a bit like a time bomb ticking away in the accounts. Some companies have disclosed their exposure, but are refusing to provide for it, hoping it will go away one day like a bad dream.
* Ditto is the case with many companies which had loaded up on forex debt, like a famished urchin landing up at a free, five-star buffet. Today, they are shying away from showing the losses on these debts, especially since the rupee-dollar has moved adversely from the time they had contracted the debt. Expect to hear more about a fancy term called Accounting Standard 30 in the coming days.
So, what’s the lesson from this time? Sorry to sound cynical, but as long as the system stays what it is, there might be just a few more revelations, and then it’s back to business as usual. C’mon, we’re all forgetting the basics. Can you ask people to keep a tight rein on greed in a market that’s asking everybody to buy that fancy yacht, or that bejewelled watch, in the space of a heart-beat? Perhaps, it’s better for all of us if we were to accept this silver-tongued beast as an irrefutable part of our lives.
Monday 5 January 2009
Another to-do list for politicos in New Year
RESOLUTIONS, promises, to-do lists. January always finds human beings indulging in some temporary exercise of will power, a willful abandonment of hedonism and a self-imposed regime of restraint. Some soldier on with their resolve, but most dump their long lists of self-imposed asceticism in a couple of months. That’s the beauty of these pledges—it’s like emerging from a crash purgatory course, all cleansed, radiant and beaming. In contrast, politicians take important vows only once in five years, and don’t even need to make any pretences of keeping up with them. But, they should see January 2009 differently.
A lot of expectations have been built up this year and the political class would do well to heed them. This year, in keeping with the season’s overdose of optimism and goodwill, might also just be that inflection point when the first strains of change become visible. Barack Obama’s “YW-C” call-to-arms seems to have had some impact in India as well. If politicians don’t want to be swept aside by a historical tide of anger washing up against their indefensible citadel, now is the time for them to draw up their own list of undertakings, thing to do over the year, in addition to their normal duty (which is, governing, eradicating poverty or strengthening the economy). Here are a few items from that list.
* Get the municipal corporations back in order. If necessary, legislate or amend existing legislation. It all begins here, whether it’s the citizen’s disenchantment with the system or the seeds of corruption, which then flower elsewhere. Most voters think at two levels — his immediate environment and then policies at the national level. The evolved ones may squeeze in a state-level tier. But, unhappiness with the immediate civic administration usually also gets expressed at the state level, as Sheila Dixit understood so well and Vilasrao Deshmukh refused to countenance. Look at the mess in the country’s richest and probably the best civic bodies (which is not saying much, given the abysmal state of all of them), Brihanmumbai Municipal Corporation. The muni has suddenly woken up to the prospect that the city’s water requirements is far higher than what can be supplied. The reason? Lack of co-ordination between the department that sanctions construction of new buildings and the one that’s in charge of water supplies.
* End the illegal trade in arms. It is true that, since 1990, this country has moved towards a liberal economic regime that puts great store by free markets. The shift in policies was spearheaded by the current PM, who was the FM then. But that doesn’t mean that we also believe in the laissez faire powers of an unfettered arms bazaar. It is common knowledge that firearms of any make, with matching ammunition, is available to anybody willing to shell out the cash. And, the hardware is available everywhere — Bihar, UP, Bangalore, Punjab, Maharashtra. Plus, corruption in the ordnance factories that allows leakage of ammo has been reported extensively. It’s time we ceased talking of Peshawar’s arms bazaar when our politicians and the police have been turning a blind eye to the thriving underground trade in armaments.
* There’s another business model crying out for state intervention. It’s called forced abductions, or kidnappings, which usually finds closure with the payment of a ransom. This is routinely practised by powerful thugs and patronised by politicians (in some cases by powerful ministers) and given free rein by the police force. Some times, in certain states, if the kidnapped person’s family is willing to pay the police a handsome percentage of the ransom amount, or the abductor fails to pay adequate commissions, then the kidnapped person might be rescued earlier than expected. This has turned into a perfect fund-raising exercise for political parties in the heartland and doesn’t require killing hapless PWD engineers. Surprising, Harvard or Wharton are yet to write a case study on this.
* Implement the National Police commission’s report at the earliest. The speed with which 26/11 has spurred the political class to rush through legislation (such as the National Investigation Agency or the UPAA amendment) or to create new wings of the police force (such as Maharashtra government’s decision to create an NSG-lookalike at the state level) invests the populace with a scepticism and a cynicism borne from years of misguided policies and corruption. Everybody is keeping his fingers crossed, hoping that these decisions do not become another opportunity for kickbacks or authoritarianism. There is a feeling that even if half the commission’s report is implemented, many of the problems bedevilling the police force could be sorted out. But, first, the police appointments have to be depoliticisied. A former home minister of Maharashtra was known to have opened a small time business in transfers - a literal version of the pay-as-you-go model. This arbitrary power needs to be taken away from ministers and vested with an all-party committee, probably headed by the CM.
A lot of expectations have been built up this year and the political class would do well to heed them. This year, in keeping with the season’s overdose of optimism and goodwill, might also just be that inflection point when the first strains of change become visible. Barack Obama’s “YW-C” call-to-arms seems to have had some impact in India as well. If politicians don’t want to be swept aside by a historical tide of anger washing up against their indefensible citadel, now is the time for them to draw up their own list of undertakings, thing to do over the year, in addition to their normal duty (which is, governing, eradicating poverty or strengthening the economy). Here are a few items from that list.
* Get the municipal corporations back in order. If necessary, legislate or amend existing legislation. It all begins here, whether it’s the citizen’s disenchantment with the system or the seeds of corruption, which then flower elsewhere. Most voters think at two levels — his immediate environment and then policies at the national level. The evolved ones may squeeze in a state-level tier. But, unhappiness with the immediate civic administration usually also gets expressed at the state level, as Sheila Dixit understood so well and Vilasrao Deshmukh refused to countenance. Look at the mess in the country’s richest and probably the best civic bodies (which is not saying much, given the abysmal state of all of them), Brihanmumbai Municipal Corporation. The muni has suddenly woken up to the prospect that the city’s water requirements is far higher than what can be supplied. The reason? Lack of co-ordination between the department that sanctions construction of new buildings and the one that’s in charge of water supplies.
* End the illegal trade in arms. It is true that, since 1990, this country has moved towards a liberal economic regime that puts great store by free markets. The shift in policies was spearheaded by the current PM, who was the FM then. But that doesn’t mean that we also believe in the laissez faire powers of an unfettered arms bazaar. It is common knowledge that firearms of any make, with matching ammunition, is available to anybody willing to shell out the cash. And, the hardware is available everywhere — Bihar, UP, Bangalore, Punjab, Maharashtra. Plus, corruption in the ordnance factories that allows leakage of ammo has been reported extensively. It’s time we ceased talking of Peshawar’s arms bazaar when our politicians and the police have been turning a blind eye to the thriving underground trade in armaments.
* There’s another business model crying out for state intervention. It’s called forced abductions, or kidnappings, which usually finds closure with the payment of a ransom. This is routinely practised by powerful thugs and patronised by politicians (in some cases by powerful ministers) and given free rein by the police force. Some times, in certain states, if the kidnapped person’s family is willing to pay the police a handsome percentage of the ransom amount, or the abductor fails to pay adequate commissions, then the kidnapped person might be rescued earlier than expected. This has turned into a perfect fund-raising exercise for political parties in the heartland and doesn’t require killing hapless PWD engineers. Surprising, Harvard or Wharton are yet to write a case study on this.
* Implement the National Police commission’s report at the earliest. The speed with which 26/11 has spurred the political class to rush through legislation (such as the National Investigation Agency or the UPAA amendment) or to create new wings of the police force (such as Maharashtra government’s decision to create an NSG-lookalike at the state level) invests the populace with a scepticism and a cynicism borne from years of misguided policies and corruption. Everybody is keeping his fingers crossed, hoping that these decisions do not become another opportunity for kickbacks or authoritarianism. There is a feeling that even if half the commission’s report is implemented, many of the problems bedevilling the police force could be sorted out. But, first, the police appointments have to be depoliticisied. A former home minister of Maharashtra was known to have opened a small time business in transfers - a literal version of the pay-as-you-go model. This arbitrary power needs to be taken away from ministers and vested with an all-party committee, probably headed by the CM.
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