Yashwant sinha speaks out

At first glance I dismissed his rants as a burned out veteran trying to come back to the spotlight even if it means jeopardizing the son’s career. However on second read, some of the points he raised makes sense:
1 What is the picture of the Indian economy today? Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction industry, a big employer of the work force, is in the doldrums, the rest of the service sector is also in the slow lane, exports have dwindled, sector after sector of the economy is in distress
2 Demonetisation has proved to be an unmitigated economic disaster.
3. A badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market.
4 For quarter after quarter, the growth rate of the economy has been declining until it reached the low of 5.7 per cent in the first quarter of the current fiscal, the lowest in three years as per the changed methodology in 2015
So, according to the old method of calculation, the growth rate of 5.7 per cent is actually 3.7 per cent or less.
5 Even SBI, the largest public sector bank of the country, has stated with unusual frankness that the slowdown is not transient or “technical”, it is here to stay and the slowdown in demand has only aggravated the situation According to the SBI chairman, the telecom sector is the latest entrant to the long list of stressed sectors.
6. The prime minister is worried. A meeting convened by the prime minister with the finance minister and his officials appears to have been postponed indefinitely. The finance minister has promised a package to revive growth. We are all waiting with bated breath for this package. It has not come so far.
7. The performance of the monsoon this year has not been flattering. This will further intensify rural distress. The farmers have received “massive” loan waivers from some state governments varying from one paise to a few rupees in some cases.
8. Forty leading companies of the country are already facing bankruptcy proceedings. Many more are likely to follow suit.
9. The SME sector is suffering from an unprecedented existential crisis.
10. The input tax credit demand under the GST is a whopping Rs 65,000 crore against a collection of Rs 95,000 crore. The government has asked the income tax department to chase those who have made large claims.
11. Cash flow problems have already arisen for many companies specially in the SME sector. But this is the style of functioning of the finance ministry now.

12 We protested against raid raj when we were in opposition. Today it has become the order of the day. Post demonetisation, the income tax department has been charged with the responsibility of investigating lakhs of cases involving the fate of millions of people. The Enforcement Directorate and the CBI also have their plates full.

13 Instilling fear in the minds of the people is the name of the new game.
14 Economies are destroyed more easily than they are built. It took almost four years of painstaking and hard work in the late nineties and early 2000 to revive a sagging economy we had inherited in 1998. Nobody has a magic wand to revive the economy overnight. Steps taken now will take their own time to produce results.
15, A revival by the time of the next Lok Sabha election appears highly unlikely. A hard landing appears inevitable.
16. Bluff and bluster is fine for the hustings, it evaporates in the face of reality.
now the climax
17. The prime minister claims that he has seen poverty from close quarters. His finance minister is working over-time to make sure that all Indians also see it from equally close quarters.

Bane of GST compliance

An Indian mind cannot think of anything simple. It is in his culture to over-complicate trivial issues, graft manuscripts detailing out the rules, scenarios and procedures detailing out a million cases yet keep the crux of the matter unaddressed and subject to interpretation. Furthermore, appoint a bureaucrat/enforcer who will swear by this rulebook as if it is the god’s gift to mankind and an army of middlemen who will guide anybody and everybody how to circumvent this rule…. This parasitic organization was once confined to the public sector & administrative services but has now percolated to the private sector as well. Here this vicious force is thriving without any moral consciousness, though patronage of the promoters without any checks and balances and really crippling the nation.

This is what I had written three months ago and the situation has shown no signs of change. As per clear tax, a business needs to file 37 returns each year to comply with general central requirements. On top of it, based on the nature of your business, there are more filings to be filed some of which are state specific.

Additionally, there are filings for income tax, export/import, foreign exchange dealings, RoC, plethora of state, municipal & central compliance of various licenses (often having contradictory requirements). No wonder an Indian businessman is always depicted as a pot bellied bania spending his entire time at the cash register or making ledgers. Unlike his western counterparts, he does not have time to greet the customers at his shop or even understand what they want.

RSS views on minorities

Hindu’s never accepted any reforms in its religious practices. Setting minimum marriage age, banning Sati or Dowry, widow remarriage was met with stiff resistance from various Hindu organisations and think thanks esp. Hindu Mahasabha. One of the biggest reason for the 1857 freedom struggle was attributed to British trying to Romanize Indian culture through religious reforms and hence British did not try much to enforce or pass on new religious laws from 1857 to Independence. Even today, the government has been lobbying Supreme court to not criminalize forced sex with minors brides.

RSS Guruji & its second leader M. S. Golwalkar wrote a book We-or-Our-Nationhood-Defined and I was intrigued by its 5th chapter (pg 100 to pg 109). Probably this chapter throws light on why suddenly Indian government is interested in religious reforms & women empowerment when it comes to triple talaq, and minority.

If, as is indisputably proved, Hindusthan is the land of the Hindus and is the terra firma for the Hindu nation alone to flourish upon, what is to be the fate of all those, who, today, happen to live upon the land, though not belonging to the Hindu Race, Religion and culture? This question is too very common and has its genesis in the generous impulse of so many Hindus themselves, that it deserves at least a brief answer.

At the outset we must bear in mind that so far as ‘nation’ is concerned, all those, who fall outside the five-fold limits of that idea, can have no place in the national life, unless they abandon their differences, adopt the religion, culture and language of the Nation and completely merge themselves in the National Race. So long, however, as they maintain their racial, religious and cultural differences, they cannot but be only foreigners, who may be either friendly or inimical to the Nation. In all ancient Nations i. e. all those who had a well developed National life even before the Great War, this view is adopted. Though these Nations practice religious toleration, the strangers have to acknowledge the National religion as the state Religion and in every other respect, inseparably merge in the National community.

Culturally, linguistically they must become one with the National race; they must adopt the past and entertain the aspirations for the future, of the National Race; in short, they must be ‘”Naturalized” in the country by being assimilated in the Nation wholly. Naturally, there are no foreigners in these old Nations, and no one to tax the generosity of the Nation by demanding privileges, as ‘Minority communities’ in the State. It is this sentiment which prompted the United States of America, England, France and other old Nations to refuse to apply the solution of the Minorities problem arrived at by the League of Nations, to their States. The avowed reason for their declaration, that the decision of the League was not binding upon them, was that its application might shatter the unity of their empire and create uncalled-for difficulties, by rousing the demon of separateness and variegated interests of the distinct minorities, which had been so long laid at rest. The same sentiment has been expressed in the speech of the American Representative to the League, on the occasion of discussing the advisability of applying the “Minorities” decision to all the countries in the world. He said, there are no distinctive characteristics in respect of Race, Language and Religion between the elements forming each of the peoples of that continent (America). Uniformity of language throughout the territory of each American State, complete religious tolerance combined with a completely natural assimilation of emigrants by the principal mass of population of each of the States, have produced in them natural organisations, of which the  collective unity is complete. This means that the existence of minorities, in the sense of persons with a right to the protection of the League of Nations, is impossible “. It is worth bearing well in mind how these old Nations solve their minorities’ problem.

They do not undertake to recognize any separate elements in their polity. Emigrants have to get themselves naturally assimilated in the principal mass of population, the National Race, by adopting its culture and language and sharing in its aspirations, by losing all consciousness of their separate existence, forgetting their foreign origin. If they do not do so, they live merely as outsiders, bound by all the codes and conventions of the Nation, at the sufferance of the Nation and deserving of no special protection, far less any privilege or rights. There are only two courses open to the foreign elements, either to merge themselves in the national race and adopt its culture, or to live at its mercy so long as the national race may allow them to do so and to quit the country at the sweet will of the national race.

That is the only sound view on the minorities’ problem. That is the only logical and correct solution. That alone keeps the national life healthy and undisturbed. That alone keeps the Nation safe from the danger of a cancer developing into its body politic of the creation of a state within the state. Prom this standpoint, sanctioned by the experience of shrewd old nations, the foreign races in Hindusthan must either adopt the Hindu culture and language, must learn to respect and hold in reverence Hindu religion, must entertain no idea but those of the glorification of the Hindu race and culture, i.e., of the Hindu nation and must lose their separate existence to merge in the Hindu race, or may stay in the country, wholly subordinated to the Hindu Nation, claiming nothing, deserving no privileges, far less any preferential treatment -not even citizen’s rights. There is, at least should be, no other course for them to adopt. We are an old nation; let us deal, as old nations ought to and do deal, with the foreign races, who have chosen to live in our country.

In the new states created after the war, however, such an assimilation had not been achieved, nor was there any prospect of its being achieved in the near future. All the same, this tried solution of the problem of the foreign races, should have been as a rule applied everywhere. But the League of Nations struck another note and formulated the now famous minority treaties – and laid down certain general propositions, which have been acclaimed as “the public law of the world.” (Arthur Henderson’s speech-page 24, monthly summary of the League of Nations, Jan. 1931 ) But not without many an apprehension and misgiving. The authors of the solution knew how beset it was with grave dangers, and yet they hoped that these treaties would serve as a first step, their declared object being “to secure for the minorities that measure of protection and justice, which would gradually prepare them to be merged in the national community to which they belonged.” (Sir Austin Chamberlain’s speech at the League Council on 9th Dec. 1925. quoted by Dr. Radhakumud Mukerji).

This risk, which the League ran certain states into, has been vividly expressed by Paul Fauchille in his speech at the League Council on 9-12-25. He said, “this is a solution (the minority rights solution) which perhaps is not without certain dangers; for, if equality of treatment of all the inhabitants of a country, is an element of political and social peace, the recognition of rights belonging to minorities as separate entities, by increasing their coherence and developing in them a sense of their own strength, may provoke them to separate themselves from the state of which they form a part; and in view of the right of peoples to dispose of themselves, the recognition of the rights of these minorities runs a risk of leading to the disruption of states”.
Prophetic words! How true they sound today after the recent developments in Europe, under the very nose of the League of Nations! The disastrous fate of the unfortunate Czechoslovakia (to which as promised, we now refer) proves beyond the faintest shadow of a doubt, how hollow were the League’s hopes and how justified the fears of Paul Fauchille. And yet the decision of the League on the minorities’ rights was the most equitable and just, that could be conceived of. But even this just and equitable arrangement, instead of fostering the assimilation of the minorities into the National community, only served to increase their coherence and create in them such a sense of their own strength, that it led to a total disruption of the state, the Sudeten German minority merging in Germany, the Hungarians in Hungary, in the end leaving the National Czechs to shift for themselves in the little territory left unto them.

Let us be forewarned, lest the same story repeat itself in our Country. Our modern solution of the minorities’ problem is far more dangerous. It confers untold rights not only on those who by their number and years of residence (we doubt it) may be considered according to the League as minorities, but also on all else, howsoever few or recent in their settlement-rights and privileges far in excess of the minimum advocated by the League. The natural consequences are even now felt and Hindu National life runs the risk of being shattered. Let us take heed and be prepared. We will not dilate upon this danger here, as it is outside the ambit of our work; we leave it to the reader to think for himself and read it in the developing events. We only remind him that it was not for nothing that all experienced Nations refused to adopt this decision of the League; that it is not for nothing that they refuse to recognise any elements entitled to separate treatment, that they insist on subordinating all to the general National life-religious, cultural, linguistic, political, that they lay so much stress, on the foreigners, either cutting their old associations and merging in the body of their National race in; every way, or deserving no right what-so-ever, no claim to any obligations from the National race. And having thus reminded him, we leave the reader to ponder over the Czech affair and find out for himself how; our National life is in even a much greater danger.
But enough of this. We refer, on the problem of minorities, our reader to “India and the League of Nations Minority Treaties” by Dr. Radhakumund Mukerji, M. A. Ph. D. and return to our subject. Indeed these questions arise in discussions about a “State” we are out to understand the Nationhood of Hindusthan, which done, all questions regarding the form of “State” shall be worth entrusting to the “Nation” as we find it to exist.

Demonetization and Operation Market Garden

Operation Market garden was a complex, collaborative allied invasion in which more than 45,000 troops (mostly paratroopers & tanks) across Britain, United States, Canada, Poland & Netherlands participated in 1944. The aim was to march 95km from Netherlands to Rhine (Germany) and secure key river crossings in the path. Both Churchill and Montgomery claimed that the operation was 90% success. Yet Prince of Netherlands Bernhard claimed, “My country can never afford the luxury of another Montgomery’s success.” 16-18 thousand troops died over the 9 day offensive and another 20,000 civilians died in the famine it resulted in.

The similarities of the 50 days of mayhem during demonitisation and the planning/operations failure in Market Garden is striking. The elected officials were practically shooting from the hip. The aim, objective, policy was changing everyday with no apparent rationale. Neither the RBI, Banks, financial institutions or government had planned or coordinated. As a result, there was a lot of hardships to businesses, common men and economy in general. The only industry that boomed was the money laundering. Scores of people lined up to exchange old currency with new. Banks and financial institutions happily facilitated anyone with undisclosed income to clean his money without paying a single penny in taxes. Government launched 2 tax amnesty scheme one after another, but there were hardly any takers because the churn caused due to demonetization facilitated in layering and conversion of black into white. Today 99% of the banned currency money has been deposited, yet government seems to be still labelling this policy as a roaring success.

Jan Aushadhi: Is it making an impact

Recently I am hearing a lot of of articles on promotion of generic medicines & capping the profits in healthcare. However is it really making an impact?

In my opinion, the reasons why generic medicines have yet not reached mass adoption is because:

1. the doctors prescribe medicine brand and not the inherent salt/generic name.
2. the patients when they buy generic medicine see a different name in the label than what is prescribed (brand name). so they believe they have compromised. (which is a wrong feeling to have when your loved one is in trouble)
3. historically the quality, packaging of generic medicines has been in trouble.
4. the availability of generic medicines has always been difficult to get. beyond the dispenceries around the government hospitals they are hard to get.
Tata Memorial hospital had a generic dispencery (very affordable) but it will not give medicines unless prescribed by a an oncologist at its hospital. So I could not walk in there with a valid doctor’s prescription and buy the drugs.
so whatever you are reading is baby steps …. miles away from potential of making a real impact.

Art of Deterrence, blackmail & threats

How does a country North Korea able to hold the entire world ransom? This belligerent state is in open hostility with three of the world’s super powers USA, Japan & South Korea. Even its staunch ally is fed up with its whimsical policies but tolerates it because the alternative would be US troops at Chinese borders. Rogue nations have a limited lifespan but this country has established a multi-generational hereditary rule.

10th March 1959 paper “ Theory and practice of blackmail” by Daniel Ellsberg (infamous for releasing 1971 Pentagon Papers on American Military strategy during Vietnam War) has some relevant insights applicable to the current Korea situation. Here are few notes that I made:

  1. There are 4 kinds of solutions that two parties can negotiate (Win-Win, Win-Lose, Lose-Win and Lose-Lose) Although we all want to have most of the dealings in area where we win, loose-loose is not something that can be overlooked.
  2. The more civilized, advanced & cultured your target is the more they are susceptible with the consequences of your extortions. Infamous precedence & demonstrations of ruthless action/culling of non-compliant is important to create a right aura. Most diplomats spend years posturing before firing a bullet or declaring war. Having a single minded obsession is what it needs to win the war of deterrence. A sheep in wolves’ clothing often gets away with the best deal.
  3. Understand the notion of Critical risks. A threat need not be credible to ensure compliance. If the pitfalls of disobedience are grave enough and the benefit of resistance low, you can expect favorable response. Simply put, a servant is more likely to hand over their employer’s assets than their own.
  4. The problem with any blackmailer is convincing that they are ready to punish for non-compliance even if it comes at great cost/hardship to them. If your threat is not “sufficiently likely” or sufficiently damaging, then the victim’s behavior cannot be altered. Nobody is likely to pay up for a long-shot. A party prepared for annihilation is toughest to handle diplomatically. To be successful in blackmail you need not be wearing the vest but you need to convince the other party that you are prepared for it. Without the credibility, guts & commitment, all your ultimatums will be discounted as bluffs.
  5. Sun Tzu: in his famous “Art of war” had once said on how to project for a nihilistic standoff: “When an army feeds its horses with grain and kills its cattle for food, and when the men do not hang their cooking-pots over the camp-fires, showing that they will not return to their tents, you may know that they are determined to fight to the death.” Today A suicide bomber wearing a vest might lose everything, but he can also inflict serious damage in the process.
  6. Successful extortionist doesn’t try to alter the victim’s behavior but influence their rational decisions & choices amongst the alternatives. The choices are dependent on the subject’s expectations on outcome & preferences.
  7. Also the word rational should not be confused with reasonable (one can be insane/ unrealistic and yet perfectly rational) Only a rational man can be blackmailed. Hence it is important for the extortionist to keep the tempers of its victims under check, pushing them over the edge will only lead to bad repercussions. However it is important that all the time the victim should be fearful of the blackmailer.
  8. Coercion operates on “your expectation of my behavior”. So not only my choices should make a difference to your behavior, but also impact the outcomes of your actions/inaction. A successful coerce “to influence you to choose the action I prefer you to take, by increasing your expectation that if you do not, I will choose some response leading to an outcome still worse for you than compliance.”
  9. Not all rational people can be coerced. Some find it distasteful, against their principles or as a trendsetter making them vulnerable to greater demands later that they refuse to comply irrespective of the severity of the punishment. So coercion is a lot to do with psychology & mental build of the subject.
  10. Nothing unleashes creativity than stress of impending doom and loss of rationality. If you box someone in a tight corner, you will get the most unexpected of the responses. So be prepared for the most unusual & ingenious counteracting strategy from your victims. It is important to stay credible and your demands within permissible limits, if you wish to expect a rationale human response from your victims.
  11. Threats fail because of variety of reasons:
    1. If the perpetuator underestimated the required credibility needed to sway the action.
    2. If the victim did not find the perpetuator’s commitment credible.
    3. If the victim was irrational, impulsive or careless
    4. If the victim is committed in the action, we are trying to deter.
  12. What if the victim fails to comply? The coercer has 4 options:
    1. The blackmailer can irreversibly give up his “freedom of choice” to carry out the threat. This means that agents/associates (who have no incentive to disobey) get clear irrevocable instructions. This limits the blackmailer options by “tying one hand” and making the world know that “failure to punish” is not an option. This might reduce his payoff and up his stakes, but sends out a clear signal that is loudly heard. Companies enter agreements/contracts/obligations (poison pills) to show commitment.
    2. Rather than making it irrevocable, he can make failure to punish costly. National leaders make public pledges (long emotional speeches), mobilize the army to make it abundantly clear that failure to act would lead to grave danger (like losing face & political leadership). Making a “low likelihood” threat imminent often leads to prompt compliance. By making the opponent know that it will be irrational to break the pledge, compliance of the victim is achieved.
    3. Suicidal threats: He can punish himself for the victim’s resistance. By staking his reputation, honor or prestige he can make it known that the threat is real. Essentially he is making aware that backing off is going to hurt him more than it would in a rational transaction. By proving his irrationality, he is trying to convince the subject that their ability to predict him is completely wrong. It should be noted that the blackmailer is still trying to appear to be rational but unrealistic in the first two strategies. However academicians are still debating on efficacy of the credibility gained through this tactic.
    4. The blackmailer first tries to exploit the uncertainty in the opponent’s mind making him unsure of the true risk-reward equation. Then by appearing irrational (erratic, inconsistent & unpredictable), the blackmailer convinces the opponent that their understanding of the situation is faulty. A civilized, gentle opponent not used to such dealings might decide to limit the losses and run away from the situation rather than investing more through a standoff. This diplomacy is highlighted in Hitler’s policy of “Political Uses of Madness.”
  13. The ability to go on the “verge of war” without an actual war is the art that can be mastered only with practice. Carrying on the threat is a loss-loss scenario which both parties avoid because of the fallout & chaos that it results in. Blackmailers also need to calculate risks before taking any action/counter-action.

Why was Hitler successful in his initial days?

There was nothing remarkable about Hitler in his early days. He was a bastard son of Alois Hitler Sr and was never adopted/legitimized. Hitler was not a German but an Austrian, who was stateless for seven years before being granted German citizenship in 1932. He was an aspiring architect & a painter. Yet there are no notable buildings or paintings credited to his name.

His military credentials are also doubtful. On 5th February 1914, he was deemed unfit for military service by Austro-Hungarian Army, hence he volunteered to be enlisted in the Bavarian Army. (even though his citizenship prevented him from legally doing so). He served away from the front-lines as a dispatch runner and never rose above the rank of Gefreiter (a very junior position). His much acclaimed Iron Cross was due to the recommendation of his Jewish commanding officer Lieutenant Hugo Gutmann, who championed his cause. His antisemitism views are famous, yet his first love was rumored to be with a Jewish girl, Stefanie Rabatsch.

Politically he was a failure throughout his career. He joined DAP (German worker’s Party) in September 2019 as an undercover intelligence agent responsible to spy on the party and influence its opinions. In 1923, his infamous “Beer Hall Putsch” was a failed coup and a poor imitation of Mussolini’s “March to Rome” a year earlier. He was charged with high treason and sentenced to five years of prison, at Landsberg. Where he was doomed, but achieved his resurgence through his book “Mein Kampf” and was released early.
There were seven elections between 1924 and 1933 and his party was never able to achieve majority. This is in spite of the global depression, high unemployment, hyperinflation and all other socio-economic factors that are contributed to rise of Fascism in Germany. Nazi party never won the elections. Hitler was nominated as the Chancellor in 1933 and later grabbed Dictatorship to form Nazi Germany.

So why was Hitler so successful in his initial days as head of Nazi?
Nothing sums up the rise of Hitler then the famous poem “First they Came… “  by Martin Niemöller. The world at that time had become too self-centered to act against the atrocities against mankind. It became an easy prey to the divisive ideology & propaganda promoted by fascism.

In 1931, The League of Nations chose not to act when Japan attacked China in Manchuria. Japan’s indiscriminate rape, plunder and massacre of Manchuria, China continued for three years without any intervention.

It failed to mobilize when Mussolini attacked Somalia (Abyssinia) in 1935.The League of Nations gave a tacit approval to Nazi annexation of Saarland in 1935 and Rhineland in 1936. The nationalist caused a 3 year long civil war in Spain overthrowing a elected democracy there but the world did not care. In fact, it was encouraged to expand east closer to Russia. In 1938, Hitler invaded Austria on the eve of plebiscite (referendum to decide on joining with Nazi) and the world did nothing.

in 1939, Czechoslovakia had a well-equipped modern army of 1.2mn soldiers with a home advantage ready for onslaught of 1.5mn German soldiers. (total strength invading Poland). They had prepared a series of fortifications of 264 small forts and over 10,000 light pillboxes designed to provide a stiff resistance. On the other hand hand in 1939, the German tanks were yet not a fighting force. As demonstrated in the march of Austria, over 30% of the armored vehicles developed mechanical failures even though no shots were fired.  The Czech’s LT-35 was much more reliable and mobile, unlike Panzer I and II. In fact, German continued to produce 1,400 of them till 1942 under the new name Panzer 38(t). Nazis were fully aware of their positions and hence relied on posturing rather than military.

The policy of appeasement by Chamberlain (then British Prime Minister) fanned the dreams of world domination rather than nipping the fascist menace at its bud. Annexation of foreign reserves, material stock piles, industries, natural resources & technology from these conquests further strengthened the Nazi military at the cost of its inhabitants. For example, Germany gained 2,175 field cannons, 469 tanks, 500 anti-aircraft artillery pieces, 43,000 machine guns, 1,090,000 military rifles, 114,000 pistols, about a billion rounds of ammunition and three millions of anti-aircraft grenades from Czechoslovakia. This amount of weaponry would be sufficient to arm about half of the then Wehrmacht and enabled them to expand to Poland.

The invasion of Poland was also the same story. Except for a token declaration of war against Germany, France & Britain did nothing for 8 long months, till it invaded France. Germany army bloated from 100,000 men in 1935 to over 2mn (1.5 participated in invasion) by 1st Sept 1939. This new green, untested army had unproven tactics, command structure, training & discipline which could easily be bogged down if the Western front was opened. Furthermore, in this first battle fought by Nazi Germany, the bulk of the tanks, weaponry used were Czech and acquired forcefully only a few months ago without adequate time to train/familiarize.

Hitler, aware of his weak position, signed a pact with his arch-rival Stalin & handed him over more than half of the Polish territory in return of Russian support in the invasion to surround the Poles. This war and the lull that followed helped Hitler to revolutionize his green recruits into the most formidable wrath that the world has ever seen.

In short, “The only thing necessary for the triumph of evil is for good men to do nothing.” – Edmund Burke