Urban Indians lead the world in support of free markets


Ajay Shah draws attention to some very interesting findings from a Pew Global survey. To the question “whether you completely agree, mostly agree, mostly disagree or completely disagree with the following statements: Most people are better off in a free market economy, even though some people are rich and some are poor“, 81% of the (mostly urban) Indians said they agreed. As Dr Shah writes “In 2002, India was halfway in the list with 62% support. In 2009, India is at the top of the list, with 81% support.”

Similarly, to the question “What do you think about the growing trade and business ties between (survey country) and other countries – do you think it is a very good thing, somewhat good, somewhat bad or a very bad thing for our country?” 96% of the Indian respondents said that it’s a good thing, compared to 88% in 2002.

A few years ago (circa 2005), an India Today survey showed that the urban middle class wanted the job security of the public sector but the income and opportunities of the private sector. Are urban Indians changing their mind?

Dr Shah believes that a combination of demographic change (the median Indian is 29), experience of sustained economic growth and the absence of the need to protect a welfare state might be the reasons why the urban Indian ended up on top of the table.

Sunday Levity: Foreign origins of the South Indian breakfast

Can you stomach the truth?

Most people—most of all South Indians—react to this with shock and denial. Some go on and come to terms with it.

What could be more South Indian?
What could be more South Indian? Photo: avlxyz/Alpha

Well, the fact is the idli—a dish that is almost synonymous with South India—was probably an import from what is now Indonesia (and what was then the Sri Vijaya empire). This little morsel comes from the late K Thammu Achaya, food scientist and historian. As Vikram Doctor writes:

It’s…surprising then to read K T Achaya’s theory that idlis are a relatively recent introduction to India. He notes that the word might derive from ‘iddalige’, first mentioned in a Kannada work of 920 AD, but the indications are that this was made from an urad dhal batter only.

The Sanskrit Manasollasa of 1130 AD has ‘iddarika’, but again made from urad dhal flour only. Tamil apparently only first mentions ‘itali’ in the 17th century. All these references, Achaya notes, leave out three key aspects of idlis: “the use of rice grits along with urad dhal; the long fermentation of the mix; and the steaming of the batter to fluffiness.”

Only after 1250 AD are there references to what seem to be idlis as we know them. Achaya’s contention is that this absence from the historical record could mean that idlis are an imported concept — perhaps from Indonesia which has a long tradition of fermented products, like tempeh (fermented soy cakes), kecap (from where we get ketchup) or something called kedli, which Achaya says, is like an idli. This is plausible enough given the many links between Southeast Asia and South India, through Hindu rulers and traders. [ET]

D Balasubramanian had a good report on Dr Achaya’s works in The Hindu and there’s a little discussion on the subject over at Manjunath & Co’s blog. Although two of Dr Achaya’s most well-regarded works on Indian food seem to be out of print, his last book, The Story of our Food is available.

Meanwhile, the chillies in the chutney and the tomatoes in the sambar came from the Americas with the Europeans.

That’s not all though. It was Baba Budan, a 17th century Sufi from Karnataka who broke the Arabian monopoly on coffee. Legend has it that:

On pilgrimage to Mecca in the middle 1600s, Baba Budan, a revered holy man from India, discovered for himself the wonders of coffee. In his zeal to share what he’d found with his fellows at home, he smuggled seven coffee beans out of Arabia, wrapped around his belly. On his return home, he planted the beans in the hills of Mysore, India, and nurtured the young coffee bushes that resulted. Coffee flourished in the hills of India – hills now named after Baba Budan.

In short order, enterprising Dutch traders bought some of these coffee plants, and shipped them to faraway colonies in Indonesia and Ceylon. The Arabian monopoly of the coffee trade was over, and the Western world was waking up to a new aroma… one that would play a fateful role in Europe, and beyond. [Green Mountain Coffee]

Baba Budan gave his name to a hill in Karnataka, and more recently, spread his seeds wide—to cafes in Cincinatti and Melbourne.

Tea? Okay, it was probably grown and consumed in India long before the British came, but you don’t have to be Aakar Patel to accept that tea as we drink it today is largely a gift of British colonial rule.

So there’s more than one ‘foreign hand’ in the ‘traditional’ South Indian breakfast. The sugar that goes into it though–we have on Dr Achaya’s authority—is an Indian invention.

Tailpiece: Mr Balasubramanian notes that “Dr Achaya points out how in 300 BC, the Arthasastra described the balanced meal of a gentleman as 500 g rice, 125 g dal, 56 g oil and salt..(and this) is the same in essentials as the recommended balanced diet that the Indian Council of Medical Research laid down in 1987 AD.”

By invitation: How can we be sure Dr Singh has answers?

V Anantha Nageswaran

TN Ninan’s weekend rumination on Manmohan Singh’s purported successes on the external front is disappointing for two reasons: it does not make any useful point and it is misleading. The ongoing global financial and economic crisis is neither about global financial regulation nor its architecture.

In all fairness—whether or not Dr Singh was and is a great economist is beside the point—his tenure this time around, even after the Communists left the alliance, has not exactly been inspiring. He might not have been able to carry the day with his proposals. But he could have, at least, articulated the change, the vision and the blueprint that India needs, thus helping whoever comes after him (or himself) when conditions turn more propitious. The only thing we know is that he missed the Communists in his coalition. Continue reading By invitation: How can we be sure Dr Singh has answers?

Pragati July 2008: A better connection with Israel

Issue 15 - Jun 2008
Issue Contents


“Adamant for drift, solid for fluidity”
India needs leadership and a renaissance in its foreign policy
Harsh V Pant

Business interests vs national interests
As Indian companies grow abroad
Sameer Wagle & Gaurav Sabnis

The myth of illiberal capitalism
Multi-polarity, democracy and what the US might do about them
Dhruva Jaishankar


A survey of think-tanks
The post-American world; Asian geopolitics
Vijay Vikram


The India-Israel imperative
Indo-Judeo commonalities: the symbolic and the substantive
Martin Sherman


Fruits of knowledge
Apply knowledge-economy processes for food security
Mukul G Asher & Amarendu Nandy

Needed: A new monsoon strategy
The focus should be on groundwater recharge
Tushaar Shah


Know your consumer?
A review of Rama Bijapurkar’s We are like that only
Aadisht Khanna

Read excerpts | Subscribe

India’s foreign policy at a crossroads

Harsh Pant’s new book

Barring the Communists, both sides of the debate over the India-US nuclear deal claim that their position is informed by India’s national interest. Given the profound changes in India over the last two decades—a relatively short period of time in the history of nations— it is but natural that there are deep differences on India’s role in the international arena. This has not been helped by the lack a serious intellectual effort to define, discuss and arrive at a broad non-partisan consensus on the national interest. As K Subrahmanyam mentioned in his interview with Pragati—The Indian National Interest Review in May 2008, even the recommendations of the task force that he chaired on global strategic affairs have not been made public, less accepted by the government.

If India is to make the most of the opportunities that are available at this critical moment in history, and if it is to avoid repeating the grand mistakes of the past, there is an urgent need for such a debate. That’s part of the motivation behind Pragati. Now, Harsh Pant’s new book fills a void and, hopefully, will set the stage for the launch a debate “perhaps to end all minor ones that India has been having for the last few years”. Some excerpts from “Contemporary Debates in Indian Foreign and Security Policy: India Negotiates Its Rise in the International System” (available here) are on YaleGlobal Online. (linkthanks Yossarin)

Look out for Dr Pant’s essay in the July 2008 issue of Pragati that will be out tomorrow (July 1st, 2008)

Command vs Cell

India’s new Integrated Space Cell

The good news is that the Indian government finally moved its feet on setting up a defence organisation for affairs in space. But there’s a distinct pusillanimity, lack of ambition, embarrassment or perhaps, bureaucratic consideration in what it decided to call the outfit. Instead of calling it an aerospace command that strategists have been advocating, the government has decided to call it an Integrated Space Cell (ISC). Setting up a Command would have given it a weighty profile—commands are headed by officers of the rank of Lieutenant-General or equivalent. A cell, on the other hand, can be commanded by anyone.

It is baffling that the report announcing the setting up of the ISC should mention that it has been so constituted to counter China’s plans for the militarisation of space. While China is an important consideration, it is by no means the only consideration. It may well be that the UPA government is attempting to counter criticism that it has been soft on China, but it was wholly unnecessary to exclusively cite it by name. Somebody messed up the messaging.

The unwarranted bravado in the messaging is met with an unwarranted downscaling of the new organisation. Setting up an outfit called a ‘cell’ suggests a tentative approach to a strategic issue. Unless the ISC is provided the resources, capabilities and bureaucratic heft, it is unlikely to be really effective. It remains to be seen whether the ISC is a command that is called a cell out of political correctness, or is, after all, a mere cell.

Related Link: Adityanjee’s article in Pragati on strategy and space.

A few hundred good men

Can India’s foreign policy get anywhere with fewer than 600 men and women running the show?

Two op-eds, one by Stanley Weiss in the International Herald-Tribune (linkthanks Adityanjee) and another by Pratap Bhanu Mehta in the Indian Express (linkthanks Sameer Wagle) deal with India’s lacklustre foreign policy. Mr Weiss writes about India’s neighbouring countries, for the international audience and has nothing really for those who are aware of Lax Indica. Dr Mehta’s piece, on the other hand, presents an important—often overlooked angle—to the discourse over why India’s foreign policy is the way it is.

It’s got to do with capacity. The Indian Foreign Service has only around 600 officers in total—and they not only man the foreign ministry desks in New Delhi and over 162 missions and embassies around the world, but also handle such administrative tasks such issuing passports at regional passport offices. India’s engagement with the external world has intensified manifold over the last 20 years: yet the primary task of shaping this engagement is left to such a small number of people.

But merely increasing the cadre strength of the IFS is not the solution. The bigger point is that foreign policy is too important (and certainly too big) to be left to professional diplomats alone. In Dr Mehta’s words India lacks the ability to “draw in from a wider pool that would allow it to think strategically rather than merely diplomatically.” And it lacks this ability because of a certain hollowness in the academia and the intellectual space. Apart from a handful of ‘premier’ think tanks, there are few institutions that produce thought leadership on foreign policy issues.

While analysing India’s foreign policy, most commentators—including this one—are guilty of focussing only on intentions. It is common enough to complain that India could have done better in this case or shown more backbone in that one. That’s the flashy end of foreign policy analysis. Worrying about organisation structure, staff strength, training and collaboration with minds outside government looks mundane in comparison. Dr Mehta does well to remind us of the importance of the latter. Just why is it important? In Essence of Decision, a seminal work on explaining how governments make decisions, Graham Allison and Philip Zelikow describe three models of analysis. Their “Organisational Process” model suggests that government policies are primarly the result of bureaucratic output (and not the unmodulated action of a unitary actor).

To the extent that foreign policy is determined by the people in the foreign ministry (and their interactions with those outside it) restructuring the bureaucracy is likely to yield better results. It must, though, be accompanied by a change in the organisational culture—one that seeks, respects and uses outside expertise. This much is for the government to do. But raising think-tanks and academic departments is something that civil society is arguably better placed to accomplish. The government will remain the main actor, but there is something Indian citizens and corporates can do to make India’s foreign policy more credible. Mr Weiss, the author of the IHT article, heads an impressive organisation called Business Executives for National Security, a “a nationwide (US), non-partisan organization, is the primary channel through which senior business executives can help enhance the nation’s security.”

There’s nothing like it in India.

Wages of the hyphenation

Chindia, that loathsome term

From Mint:

Earlier this week, in a speech he gave in Senegal’s capital city Dakar, Soros had a few blunt things to say about Africa. He said China and India are the new colonists of the continent, as they hunt for minerals and oil. “They are in the process of repeating the mistakes that the colonial powers have made,” Soros told news agency Reuters. [Mint]

This is what you get when people reflexively mention “China and India” in one breath. As Harry Broadman’s book, “Africa’s Silk Road: China and India’s New Economic Frontier”, published by the World Bank (and reviewed here in Pragati) reveals, the two countries have very different approaches towards Africa.

The book contains useful discussion of the differences in the behaviour of firms from China and India. The Chinese engagement in Africa (as elsewhere) reflects the top-down, state-enterprise led approach (88 percent of Chinese firms engaged in FDI abroad are government owned); while the Indian engagement reflects private-enterprise led bottom-up approach of its economy. Thus, it is a private-sector rather than a state-owned company from India which has recently acquired eleven coal mines in Mozambique. The Chinese engagement is much more strategic, focusing on key sectors, including finance. As an example, China has just acquired a stake in South Africa’s Standard Bank which operates in 18 different African companies. China is also using aid (such as its intention to provide US$5 billion to Congo to fund infrastructure) to develop strategic alliances with key resource-rich countries.

The author suggests that Chinese businesses exhibit “…enclave types of corporate profiles, with more limited spillover effects” (Chinese firms bring workers from China even for construction and other tasks when African countries have severe unemployment problem). Chinese firms are also known to be reluctant to provide sub-contracting opportunities for African companies, and to transfer technological knowledge.

The Indian firms on the other hand have pursued “..strategies that result in greater integration into domestic markets”, and they overwhelmingly rely on labour sourced domestically, even for managerial positions. Indian firms are also more likely to sub-contract to African firms. [Mukul Asher/Pragati]

While some of the bracketing is unavoidable especially in the international media, this hyphenation should certainly not be encouraged. [It is rather unfortunate that a member of Dr Manmohan Singh’s council of ministers should write a book titledMaking sense of Chindia“.]

Anger over wheat flour

Pakistan’s food crisis

Since yesterday, Pakistani paramilitary forces have been assigned new duties (via Chapati Mystery). Troops from the Pakistan Rangers—generally used for various internal security duties—and the Frontier Constabulary are guarding wheat warehouses and flour mills. That’s because the government has identified hoarding and smuggling as the reason behind Pakistan’s worsening wheat supply crisis. Not only has the price of wheat flour risen—the supply shortage has led to long queues and public anger. The food crisis (and the parallel power supply crisis) is adding one more dimension to Pakistan’s growing instability.

Now, world prices of foodgrains have risen in the last several months due to a variety of reasons: from increased demand in emerging economies to poor harvests to the effect of US biofuel subsidies. But Pakistan is a wheat producing country and shouldn’t have had to face an acute shortage. So how did it get to this stage?

The proximate story of this crisis started in early last year, with the government announcing a very rosy estimate for the 2007 wheat harvest. Exports were permitted as forecasts, and early harvests, suggested domestic production would outstrip domestic demand. But when prices continued to rise, the government decided to import wheat instead. But this was insufficient to prevent the crisis from reaching this stage. So what is the government to do but point fingers at the usual suspects and deploy troops?

Let’s look at the inside story. In theory, the Pakistani government purchases wheat grains from farmers at the “support” price. In practice, it didn’t do so effectively. One complaint was that the government purchasers delayed their purchases, allowing traders and middlemen to buy it from worried farmers at a discount. They may even have cornered the supply of gunny bags preventing farmers from selling directly to the government. This racket invariably involved collusion between the feudal landowners and government officials: during the 2006 sugar crisis, Pakistan’s National Accountability Bureau named Chaudhry Shujaat Hussain, Asif Ali Zardari, Nawaz Sharif and Humayun Akhtar, among others, as the leading culprits.

The effective result this was that bumper harvest or not, the government’s warehouses were not as filled up as they should have been. The bouyant world price for wheat and Pakistan’s weak border controls meant that those who had purchased the grain could export it illegally.

By end November 2007, queues started forming outside stores selling wheat flour. The government decided to import wheat from the international market, but prices had risen by this time. It had to subsidise these imports in order to keep the prices low enough: but as expected in such situations, traders and sellers found ways to divert the subsidised wheat into the open market, where it would sell at a higher (“market”) price. The government now hopes that paramilitary troops will curb this behaviour. Flour millers too have been seen as profiteering from the episode. [Related articles in Business Recorder and Khaleej Times]

Clearly, the principal beneficiaries from the wheat crisis are the usual suspects—the politically connected big farmers and traders. Some analysts have speculated that the proceeds of this crisis will fund the coming election campaign. All the same, the crisis highlights the simple fact that for all the accolades former prime minister Shaukat Aziz received for managing the economy, the Musharraf regime has failed to ensure that markets are free and competitive. Pro-business it might have been, pro-market it was not.

Will importing wheat solve the problem? Not unless it is accompanied by a policy that seeks to reduce the difference between the official price and the market price. Senior Pakistani officials have complained about having to subsidise wheat—prompting commentators like Ayesha Siddiqa to ask why they should complain about this at a time when the Pakistani army is lavishing money on new gear and a spanking new headquarters.

The issue of ‘sharing’ the subsidy load among the four provinces is politically fraught, as intra-provincial divides have sharpened. Given that wheat prices are likely to remain high over the next few years, the food subsidy burden can weigh down Pakistan’s budget. Yet, doing nothing is hardly an option: for a hungry population is an angry population. And anger is one commodity that the Pakistan is not short of.