The Ascent of Dissent Amit Shah

8 ISSUES AND INSIGHTS MUMBAI | WEDNESDAY 24 JULY 2019 >

> use of simple words like “shall” and Judges have to iron out clumsy clauses CHINESE WHISPERS “may”. After long and intricate discus- in law. On four provisions in the Excise The Tower of legal Babel sions, shall in a statute is sometimes Act, the court wrote, “subjected to “read down” as may and on other occa- amendments from time to time, they Swaraj on political violence sions, may is “read up” to mean shall. have now become so complicated that The project to translate judgments to national languages will face Law journals have a separate section on in order to discern their meaning, it many snags the latest interpretation given by courts becomes necessary to read them back to ordinary phrases. and forth several times”. In a similar recent contact with western jurispru- ic words and syntax. Recently, Chief Judgments are only part of the prob- situation, a British judge remarked that dence translations could face Justice Ranjan Gogoi is reported to lem. Legal draftsmen have often con- he tried holding the lines upside down formidable hurdles. have conceived a project to provide founded judges with woolly phrases. too, with no result. If judges say so, what The judiciary has launched an ambi- short summaries of important judg- Some jurists think that half the litiga- would a lesser translator do? The legal tious programme to make available judg- ments, but it has not taken off. tion in the writ courts is the conse- profession treats words of statutes and ments of the Supreme Court and high The judiciary is not digitally savvy, quence of bad draftsmanship. When judgments like religious texts. With sev- courts in local languages. Important though it claimed recently that it is judgments are written, those provisions eral translations, they would argue over judgments run into hundreds of pages going paperless. In fact, it has just taken running into several pages are cited ful- comparative translations till their jaws like the celebrated Kesavananda Bharati, over 12 acres of the former Appu Ghar ly. This would make the task of the ache and pockets runneth over. Former external affairs minister Sushma judges’ appointments cases, and recent- nearby to store its papers. It is not yet translators doubly difficult. Last week, It is well to remember the old adage Swaraj (pictured) has retired from active OUT OF COURT ly, the right to privacy judgment. They equipped to use computers for transla- a Jharkhand liquor law provision in that hell is paved with good intentions. politics. Her well-wishers and are no easy read, with footnotes and ref- tion. Even if AI is used, robots would Hindi had to be translated twice into The translation move may be politically supporters expected the government to M J ANTONY erences at the bottom of the page. The be foxed by judges’ language. There is English to satisfy SC judges regarding correct, but the immediate need is to make her governor of a state. While hangover of the Anglo-Saxon tradition an apocryphal story in which CIA its accuracy. The sections were named provide ordinary people a simple sum- Swaraj is yet to be sent to a Raj Bhavan, leads to a sprinkling of Latin and French engaged computers to translate in hybrid language, like “Rule mary of judgments, as Gogoi planned. she has decided to highlight the issue of t is said about literary works that phrases, apart from US and Russian. When it came to the biblical 106(Tha)”. The problem would be com- In the 1,000-page Kesavananda judg- “political violence in Bengal”. On translations are the other side of Commonwealth case law. sentence, “spirit is willing; but flesh is pounded if all these have to be trans- ment, the judges themselves felt the Thursday, Swaraj will be the chief guest I the carpet. They lose much of the Moreover, several judges tend to be weak”, the printout read: Vodka is good; lated into 23 scheduled languages of need to provide a summary. But that at such an event the India Foundation, beauty. But when a court judgment in loquacious and have been criticised for but the meat is awful. So a large number the Constitution, including Bodo, summary itself ran into controversy a Bharatiya Janata Party-affiliated think English is translated into national lan- that. Late V R Krishna Iyer consistently of specially trained translators have to Santhali and Sanskrit. because it is argued that the “basic tank, is organising. The organisers have guages the result could be a nightmare rode a polysyllabic mare to tilt at wind- be employed. The SC has often criticised lawmak- structure theory” came out of the sum- said more than 50 families “whose like the Tower of Babel. In an age-old mills of social injustice in his classic There are endless wrangles in ers for not correcting errors — even mary, not from the judgment. members have been victims of political nation like ours which had only a judgments. Several others also use exot- courts, reflected in judgments, over the typos — despite pointing them out. Quicksands abound in the legal field. violence in Bengal and all those survivors of family victims will narrate their stories of sorrow and horror”. The group is planning to prepare a report on this and present it to Home Minister The ascent of dissent Amit Shah. Star performer Tewari DIFFERING OPINION UPA Chairperson Financial sector committee reports have become as famous for Sonia Gandhi on dissent notes as their recommendations Name of committee Chairman Dissent notes Year of Tuesday came submission prepared to take on Fuller capital account convertibility SS Tarapore Surjit Bhalla 2006 the government on SUBHOMOY BHATTACHARJEE put in a dissent note as member of the There is a pattern to these dissent Mumbai IFSC Percy Mistry* Percy Mistry 2007 US President Donald second SS Tarapore committee report notes. Most of them have been about Trump's remarks on ccording to media reports, on capital account convertibility. This reconciling differences between the FSLRC Justice Srikrishna PJ Nayak, JR Verma, Kashmir. During the Finance Secretary Subhash was known as the committee on RBI and the finance ministry, the KJ Uddeshi, YH Malegam 2013 Zero Hour, as Manish A Chandra Garg will be putting “fuller” capital account convertibility, underlying issue being which institu- Committee for evolving a composite Raghuram Rajan Shaibal Gupta 2013 Tewari (pictured), who was leading the up a dissent note in the report by the since there was an earlier report on tion will be asked to cede power. development index of states Congress' charge on the issue, targeted Bimal Jalan committee reviewing the the same theme by the committee in Committees were expected to narrow th the government, Gandhi pulled out a capital framework of the Reserve Bank 1997. The earlier one did not have a the differences. In most cases, that 14 Finance Commission YV Reddy Abhijit Sen 2014 sheaf of papers from a plastic folder and of India (RBI). One key recommenda- dissent note. Some recommendations never happened, so the tensions per- Committee on Comprehensive Nachiket Mor Shikha Sharma, SS Mundra 2014 handed those to Tewari, who started tion will be how much of the central from both these committees became sist with varying intensity. Financial Services for Small Businesses reading out from the transcript of bank’s reserves should be transferred part of the policy framework. For instance, in 2018, the finance and Low Income Households** Trump’s remarks on Kashmir. He returned to the government. Garg has appar- The maximum number of mem- secretary chaired an Inter-Ministerial the papers after completing his ently suggested a one-time lump sum bers to put in a dissent note was the Committee for Finalisation of FRBM Review Committee NK Singh Arvind Subramanian 2017 intervention. Tewari had been passed transfer. Financial Sector Legislative Reforms Amendments to the Payment and Inter-Ministerial Committee for over and Adhir Ranjan Chowdhury was Garg is not the first to put in a dis- Commission chaired by Justice Settlement Act. The committee had finalisation of Amendments to the chosen leader of the Congress in the Lok sent note in a financial sector report. Srikrishna to streamline and update seven members, of whom the RBI rep- Payment and Settlement Ac Subhash C Garg S Ganesh Kumar 2018 Sabha. But during the ongoing session, In fact, it is rare to find any committee sectoral laws. Of the eight members resentative, S Ganesh Kumar, execu- *resigned from the committee in February 2007; **additional notes to the committee Tewari has been one of the star report for the financial sector since who wrote the report in 2013, four also tive director, had put in a dissent note. performers for the party. 2000 in which there hasn’t been a dis- penned dissent notes. At stake was who will get to police the financial sector reforms, of years, on pay within the sent note by at least one member. If Discussions on the report are pep- emerging fintech sector. which he chaired before Most of the dissent central services on promo- he does so, however, he would be the pered with these dissent notes, espe- No surprise, then, the practice has joining the government, notes have been tion prospects, on lateral first finance secretary to cially the one by P J Nayak. spread to other entities in the finan- went through peacefully, about reconciling entry and much more. For an accident-free India have put in a dissent note As former joint secretary, cial sector. Economist Abhijit Sen as but the “committee for differences between There were so many that it Rashtriya Loktantrik Party leader so far in the 20-odd reports capital markets, and former member of the 14th Finance evolving a composite the RBI and the is often difficult to make Hanuman Beniwal, an ally of the commissioned for the sec- chairman of Axis Bank, Commission had put in a dissent note. development index of finance ministry. out if there is a considered Bharatiya Janata Party in Rajasthan, on tor. Nayak’s words of caution The commission was chaired by Y V states” which submitted Committees were view for the government to Tuesday said in the Lok Sabha that one The most famous dis- about transferring power Reddy. Sen criticised the sharp bump its report in 2013, found expected to narrow adopt or simply a recital of of the reasons for the growing number sent was the “High from the RBI to the finance up in the allocation to states from the itself saddled with a dis- the differences. In the dissenting views. of road accidents was India's rising Powered Expert Committee ministry effectively killed divisible pool. Sen was the first mem- sent note from Shaibal most cases, that never Even when there was no population. He suggested those with on Making Mumbai an the report. One key propos- ber of a Finance Commission member Gupta of Asian happened dissent on record, such as more than three children should not be International Financial al became the Financial to write a dissent note. Development Research the Bimal Jalan committee allowed to contest Lok Sabha and state Centre” report of 2007. It Resolution and Deposit Essentially, every chair of a com- Institute. Gupta opposed the method for “Review of Ownership and assembly elections. Speaking on the Bill was colloquially known by Insurance (FRDI) Bill, 2017, mittee on the financial sector has had crafted by the committee to decide if Governance of Market Infrastructure to amend the Motor Vehicle Act, Beniwal the name of its chairman, Percy but the uproar over a clause diluting to wrestle with dissents. The N K a state could get special status. This, Institutions”, reports created news for said India should follow a three- Mistry, who made his dissent known depositors’ rights put it on the back Singh-led committee review of the too, got more salience than the report, having glossed over dissensions. That children policy, if not the two-children by declining to sign the final report. burner. Fiscal Responsibility and Budget which was quietly buried. report submitted in 2010 set up a furi- policy followed by neighbour China. The The Percy Mistry report was signed by Nayak himself was lucky as the Management Act got its share from The Seventh Pay Commission with ous debate between the stock reason that Beniwal said a three- the other 14 members; predictably, report he chaired in 2014 as the then Chief Economic Advisor Arvind just three members has notched up a exchanges with both the finance min- children policy was good enough, Mistry’s absence made the news — “Committee to Review Governance of Subramanian in 2017. record for the largest number of dis- istry and the Securities and Exchange sources said, was because having three and Mumbai never made the transi- Boards of Banks” had no dissent Raghuram Rajan chaired two sent notes — well over 60. They dif- Board of India eventually distancing children was still quite the norm in tion to an international financial cen- notes. No wonder its prescription for reports for the Planning Commission, fered on treatment of defence services, themselves from the conclusion. Rajasthan, and several of his politician tre. bank governance in India has become one of them after he was appointed whether IAS entrants should hold an Jalan, too, finally distanced himself colleagues have three children. In 2006, economist Surjit Bhalla the standard reforms template since. chief economic advisor. The one on “edge” over other services on number from the report.

INSIGHT > LETTERS

ritory has been largely copied and has a naïve romantic neo-convert tinge to it. ments before international forums Bring out the Big Tent That image may be losing its lustre and Plan now have to be made with caution as the is part of the frustration as students European Union and the United States Hong Kong seems transfixed with realise that a crowd, however well inten- This refers to “The agony and the have a hidden economic and political tioned, cannot simply dictate terms. urgency of water” (July 23). The article agenda to dilute and gradually do the symptoms, not the cure There is rule of law. There are courts. is well timed as some of the states in away with their share in climate There is procedure. That’s where the India are reeling under severe water change by passing the burden on to cians of all hues, Christian leaders, battle must be joined if the city is to pro- crisis. Vidarbha in Maharashtra is one developing countries like India and labour heads and business stalwarts, tect its fine institutions and future well- such region. The suggestions for con- China. They have also not committed and anyone who may be in a position to being. Romantic struggle requires a servation of water through various in extending technological and finan- help. This is not a time for bruised egos, Great Evil to oppose in order to stir measures are well taken. The need of cial support to reduce costs. This is face, shows of state power, petulance, or young hearts. And thus the good-vs-evil the hour is issuance of government against equity and fair sharing. PR spin. It is a time for big-tent action battle plays out weekly on Hong Kong advisories and campaigning in public Further, when covertness does not across a table — no matter how acrimo- streets shrouded in tear gas. It is street media for the efficient use of water. succeed, they resort to political threats nious — with transparency, and with theatre at its most moving — both Rainwater harvesting in every build- like pulling out of agreements entered the media present. intriguing and worrisome, given its ing and hotel in the city should be into earlier. This applies all the more Bringing these disparate views into unpredictable nature and the absence compulsory and reuse of waste water to the US. The United Nations is also VIJAY VERGHESE a single room means certain ground Men in white T-shirts and carrying of a coherent plot. Hong Kong’s embat- through recycling by modern tech- attempting silent coercion by stating rules must be clearly understood and poles, seen in Yuen Long after tled Chief Executive Carrie Lam Cheng niques should be undertaken. We that countries should come prepared firmly enforced. Hong Kong’s “rule of attacking anti-extradition bill Yuet-ngor has been pilloried as a stooge must be prepared to tackle global with enhanced targets at the United law” must be upheld at all costs. This is demonstrators at a train station in and a monster. She is neither. But an warming. If we plan now, we may Nations Climate Change Summit in ong Kong is adrift in uncharted the glue that binds the fabric of this Hong Kong obdurate manner, government hubris, achieve the goal of reducing demand September 2019. It is obvious that such waters. The uncommon tear- complex territory. The Basic Law, Hong and a tin ear have not helped. for water through efficient conserva- threats are being directed towards the H gas tango being played out on Kong’s mini constitution that emerged were non-violent. But they broke what Lam would do well to resign after a tion in a very short time span. developing countries like India and the city’s streets poignantly shows it has from white-knuckle Sino-British talks they deemed were restrictive and egre- face-saving cooling down period (which Partha Sarathi Mukhopadhyay China. Commitments made before an been a fast and brutal slide from the and received a tacit nod from major gious laws. They knew their actions had also limits the damage to Beijing) much Nagpur international forum will lead to an high life to high dudgeon. powers, must be adhered to. consequences. They didn’t slip away to like former CE Tung Chee-hwa in March internal economic pressure increasing As with the 2014 “Occupy”, a mass Protestors who have broken the law Bermuda for a martini. 2005 for “health” reasons. There is a One-sided match costs for such conversion, hurting the seemingly disciplined movement has and vandalised public buildings like The government for its part must precedent for retreat. But any cooling industry, especially the power seg- dribbled into a meandering leaderless the Legislative Council (regardless of stop dancing around the issues with down period will require some govern- This refers to your article “Red flags ment, transport and housing amidst display of angst with no clear long-term whether they were lured in as a part of semantics. It has impressed none and ment heads to roll right away. The police on green targets” (July 23). India an abrupt change in aim. Small fringe groups repeatedly government strategy to erode public frustrated all. If the extradition bill is chief and the secretary for justice are should not commit itself to any technology. It will upset productivity break off from peaceful marches like support) must face their charges in a truly dead, then the chief executive prime candidates. It will help bring cool- enhancement in its targeted share at and create inflation. malign free radicals roaming the city’s court of law. No country takes an attack must take it off the table. There can be er heads to the table to revisit grievances the climate change summit despite C Gopinath Nair Kochi financial arteries seeking futile con- on its seat of power lightly. The stu- no ambiguity. The police must end and offer reassurance. That is the price having the capacity to do so as its frontation. The government has curi- dents are right to protest a hastily their petulant behaviour and get back of peace. Any other alternative is too internal efforts aren’t adequate. Letters can be mailed, faxed or e-mailed to: ously all but abdicated the stage creat- devised extradition bill but terribly to serving and protecting, as they have grim to contemplate. Afforestation cannot be an imme- The Editor, Business Standard ing an even bigger leadership vacuum. wrong to cross the line when it comes done in a clean and exemplary fashion While the process of selecting a new diate measure or solution and will only Nehru House, 4 Bahadur Shah Zafar Marg New Delhi 110 002 And a once professional police force, to violence. To argue the damage is an since the Independent Commission CE may open a fresh can of worms for be a long-term strategy to reduce emis- Fax: (011) 23720201 · E-mail: [email protected] maligned and under pressure, stands aberration by a small faction is imma- Against Corruption (ICAC) was insti- some parties given the current swing sion in the wake of mass deforestation All letters must have a postal address and telephone by as violent hooligans beat black-shirt- terial now. The entire movement has tuted in 1974 to excise graft from the away from China-sympathetic politi- over a period of time. Official commit- number ed protestors as well as casual com- been tarred by that brush, in one fell ranks. An independent commission of cians, it represents the fresh start this muters in an MTR station. This holds swoop killing business, tourism enquiry would be welcomed to identify city sorely needs. Dealing with the dangerous portents. receipts, and goodwill. erring officers and put paid to idle scut- “free radicals” on the streets and stu- > HAMBONE Politics abhors a vacuum and Beijing Fleeing to Taiwan is not an option. tlebutt. The morale of those in uniform dent suicides — both symptoms of a is increasingly uneasy as symbols of its A government in exile —something must be rebuilt. deeper malaise — means identifying authority come under attack. With deracinated dissidents often fancy over A fundamental problem with the and tackling the problems head on. protesters fleeing to Taiwan, purported- time though not as yet in this case — sudden politicisation of Hong Kong — This is not a law and order issue even ly for asylum, events have spilled into would be an incendiary notion. They an avowedly apolitical financial if it manifests as one. It is time to grasp the regional arena adding pressure on must face the music at home. Civil dis- entrepôt until 1997 — is the lack of the nettle. cross-strait tensions. obedience as espoused by the likes of precedent and history or any markers It is time for the government to reach Mahatma Gandhi or a Martin Luther to chart progress. Just as viewers often The author is a Hong Kong-based journalist out across the divide to fashion a bridge King entailed long stints in prison where mimic relationships on TV (Friends was and the Editor of AsianConversations.com — seeking help from universities, politi- moral authority was incubated. They one striking example), politics in the ter- and SmartTravelAsia.com OPINION 9 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXIII Number 244 ILLUSTRATION: BINAY SINHA MUMBAI | WEDNESDAY, 24 JULY 2019 Boris and Brexit His election amplifies the confusion he only certainty about Boris Johnson’s election as British Prime Minister is that trade and business can expect more uncertainty as far as the process to leave the European Union (EU) is concerned. T Mr Johnson has revelled in his maverick image in various public their competitors. Their willingness to spend large positions he has held, from mayor of London to foreign secretary. But as he amounts on advertising synergistically led to the takes charge at Downing Street on Wednesday, he may find himself up against sudden emergence and growth of, first, mass cir- challenges of far greater consequence than a dodgy project award or an argu- culation periodicals, followed by advertising sup- ment with Italians over Prosecco sales. Unlike the embattled Theresa May, ported radio and then television. Concepts like “brand equity” started circulating and by the 1960s, Mr Johnson has showed his hand. He campaigned hard for “Leave”. He wants advertising agencies came into being to provide a “hard Brexit” (meaning the UK would leave the EU, single market and cus- such services. toms union) and, failing that, crashing out with “no-deal”. The stances may It is in this context that Kotler articulated the be clear, but the implications of these positions on business are not. concept of “marketing” as a field of learning and His predecessor’s thrice-defeated Brexit deal, which saw the deadline postulated that the “brand” is as crucial a variable postponed twice, underlined the polarisation of Parliament and the electorate. as price in influencing demand. In his acceptance speech, Mr Johnson said he would “get Brexit done by There is a possibility that thinking, like Professor Au revoir, brands? Miller’s, and debunking concepts like “brand October 31” with a “new spirit of can-do”. But he takes charge of a government image” and “brand” is merely an example of the that is largely hostile to his swashbuckling Brexiteering. Two members of the The current focus on data to measure marketing success could kind of overstatement that new technology government have already resigned and several key Cabinet ministers, including approaches tend to make. The consulting firm, Chancellor of the Exchequer Philip Hammond, were threatening to resign if herald the end of an era — or the beginning of a hype cycle Gartner, even has a theory around this, that they he were elected. By-elections next week could reduce the Conservatives’ call the “hype cycle”. The start of a hype cycle is slender seven-seat majority in the House of Commons to just two, making it gnore the academic pride and posturing of the element was captured in the concept of “brand”. when a technology breakthrough happens, but difficult for him to gain support for any Brexit deal he may negotiate before past. Forget the linguistic arguments… data This “brand” has its components as well: The usable products that are commercially viable have the new October 31 deadline. Also, Parliament has given Mr Johnson less of a Irule[s] the day....Data science is...the new look “brand name”, which was supposed to be unique yet to happen. However, early publicity soon creates free hand, voting, first, against a “no-deal” withdrawal and then voting against of marketing”. and catchy, a “tagline”, a string of four or five words a “Peak of Inflated Expectations”. Soon it is discov- I rubbed my eyes in disbelief when I saw the affil- that conveyed the most crucial aspects of what it ered that there are scores of failures and only a few Parliament being prorogued to push through such a deal. iation of the author of this: Northwestern University. stood for (“Just Do It”, by Nike is an example), cre- successes, which then results in the next phase, the Mr Johnson now has a little over 90 days to negotiate an alternative This was the university that was home to Professor atively designed elements ( the log design, the “Trough of Disillusionment”. Many producers drop deal. The core of the problem that brought down Ms May remains: How to Philip Kotler who conceptualised the idea of “brand typography used, the colour palette). All of these out while a few courageous ones hang in there and deal with the border between the Republic of Ireland, a EU member, and marketing” and whose 1967 book, Marketing were supposed to combine and represent the try and prove themselves to the few early adopters. the UK’s Northern Ireland. The issue is complicated by the fact that the Management: Analysis, Planning, and Control, is “brand”. Then comes the “Slope of Enlightenment”, a long, Conservatives depend for their Parliamentary majority on an Irish unionist even today, 52 years later, a staple textbook in every Early successes in using these concepts were seen multi-year (often multi-decade) period where prod- party, which does not want any exceptions for Northern Ireland in this business school in the world. in the United States with, for example, De Beers’ 1947 ucts that really deliver on— or near— the original deal. Ms May’s deal sought to address this with a “backstop”, which would The sentence that I quoted was from the preface “Diamonds are Forever” campaign that made dia- promise appear. Finally, comes the “Plateau of of the book, Marketing Data Science, by Thomas monds an expression of love among common people Productivity” where mainstream adoption of the entail the whole of the UK remaining within the EU for the duration of the Miller, also of Northwestern and not just an extravagant pur- new technology happens. discussions over the new relationship but without any say in any rule University. This book, unlike chase by the very wealthy; the 1954 The current rush towards emphasising the mea- changes. Predictably, this projected indefinite diminution of the UK’s nego- Professor Kotler’s classic, is full of Marlboro Man campaign made surable outcomes of marketing like clicks, form- tiating position — which was the proximate reason for Brexit in the first computer-based models and the use Marlboro the smoke of choice for fills, add-to-carts, orders, orders accepted and paid place — attracted opprobrium across party lines. Within the Conservative of the computer programming lan- “cool, rugged men everywhere”, for with no returns is dramatically different from party, the “backstop” clauses heightened demands for the exit of Ms May, guages R and Python to build models not to mention the myriad cam- long-established measures of media effectiveness and Mr Johnson was at the forefront of those calls. Confusingly, however, in marketing. paigns advertising soap brands such as what percentage of a product’s potential he had voted for Ms May’s discredited deal in its third vote. With the UK If what Professor Miller says is from Colgate Palmolive, Unilever audience has become “aware” or have the mode to true, there is an impending waste- and others. These soap advertising becoming "interested" or have graduated to “desire” economy expanding at its slowest pace since 2012, the chaos of “no deal” is land where we will see the carcasses campaigns were such a dominant the product or have resulted in “action”. the last thing it needs. of some currently high-flying and force in the 1950s that even the On the face of it, it represents progress since it prosperous organisations (market AJIT BALAKRISHNAN radio and TV programmes that measures ultimate outcomes. But, by skipping the research companies, advertising they ran on were dubbed “soap measurement of the earlier stages through which a agencies, public relations firms...), operas”. sales process works, are we taking the online adver- Don’t tread on Sebi job positions (product managers, marketing man- It is useful to trace back the economic and tech- tising technology to the dangerous stage of the hype agers) not to mention all of the media industry nological forces that led to this outburst of brand cycle, the “Trough of Disillusionment”? A sense of The market regulator needs financial autonomy (print, television, radio…) whose life-blood is adver- advertising because that may help us understand realistic expectations will dawn when the same tising money spent to create and sustain “brands”. the current movement against brands. The early sophisticated machine learning models that he Securities and Exchange Board of India (Sebi) has asked the Collateral damage will affect not just Bollywood part of the 20th century saw, thanks to break- attempt to predict clicks and orders are engaged to finance ministry to reconsider aspects of the Union Budget for stars but also cricket, soccer and tennis, whose throughs in chemical technology, the arrival of mass model earlier stage variables such as awareness, 2019-20 that seek to amend its governing legislation, the SEBI Act players are rewarded handsomely by the brands produced chemical-based items like soaps, deter- interest and desire. So, a great deal of mathematical T of 1992. The Finance Bill has made some major changes to require- they endorse. gents, cigarettes, breakfast cereals and so on that innovation lies ahead of us. ments on the market regulator. For example, the proposed amendments All these lucrative industries were built on the were hitherto the work of small neighbourhood suggest that three quarters of the surplus retained by the market regulator firm belief that there is an intangible element to craft shops. These large scale producers, particularly The writer is hard at work on a free textbook in 22 Indian every year be handed over to the government. The remainder should go every product or service beyond its physical in the United States, needed a way to present their languages that will introduce machine learning to Class 8 into a “reserve fund” — but that, too will be capped. The level set by the attributes— or even its price — and that intangible commoditised products as different from that of Students in India. [email protected] government is two years’ expenditure. This is not all that the government proposes. The amendments also would require Sebi to seek the approval of the government for any capital expenditure. Put these together, and an unfortunate pattern of reduction of a well-functioning regulator’s indepen- dence and powers becomes apparent. No light at the end of the tunnel? While the government may reasonably argue why a market regulator should sit on any pool of capital at all — and the Comptroller and Auditor ormer Reserve Bank of India Governor Urjit as it sounds. Massive PSB lending to infrastructure affords some discretion to bankers and provides incen- Patel’s talk on India’s banking sector at has eased a long-standing constraint on economic tives for resolution. The RBI has asserted its power to General feels this undermines the parliamentary oversight of public funds FStanford University last June has not received growth. Hasn’t China done likewise for long — and give directions to banks on NPA resolution. — there are significant moral hazard questions that arise as a consequence the attention it deserves. Patel sees no light at the quite successfully thus far? As for the PCA, it can only be a temporary measure. of these proposed amendments. The sums involved are not enormous. Unlike end of a long tunnel. His diagnosis is debatable and After 2014 (when Rajan was governor and Patel If extended for long and to a large number of banks, it the Reserve Bank of India, which earns a considerable income from its regular his pessimism seems overdone. deputy governor), the RBI significantly tightened ends up hurting banks as well as borrowers. The relax- operations, in 2016-17, Sebi earned just over ~200 crore from investment Three points emerge from Patel’s talk. One, the regulation. The RBI’s Asset Quality Review resulted ation of the PCA framework was especially necessary income; the remainder, just over ~500 crore, came from its regulatory actions. present non-performing asset (NPA) crisis largely in vastly improved recognition of the NPA problem given that the NBFC sector had moved into distress. Sebi’s general reserve is estimated at ~3,800 crore in March 2019. stems from regulatory failures and public ownership — witness the three-fold increase in NPAs at PSBs. Patel concludes on a grim note. We are confront- So the amount of funds the government is likely to receive from Sebi of banks. (Patel believes the two are linked). Two, Better recognition of NPAs was certainly needed. ed with a trilemma in banking. It’s not possible to Raghuram Rajan and Patel made a valiant attempt Talk to bankers, however, and they will tell you that have all of three things: Dominance of PSBs, inde- will hardly make much of a difference to the government’s kitty, giving rise to rectify the failures of the past by tightening regu- recognition was carried too far. It seriously eroded pendent regulation and adherence to debt-to-GDP to concerns that the latest move is a desire to increase control over the reg- lation during their tenures. Three, banks’ capital and undermined their targets. Something has to give. ulator. The Sebi chairman is right in arguing that the proposal is already there are indications once again of ability to lend. This hurt economic We need clarity on the independence of the bank being discussed by the Financial Stability and Development Council, and a lurch towards lax regulation and, growth and thereby banks’ ability regulator. Is there any legal impediment to the RBI that the amendment to the Sebi Act, through the Finance Bill, could have therefore, Indian banking will con- to manage the NPA problem. The implementing “fit and proper” criteria for govern- waited for the Council’s final decision. tinue to be bedevilled by concerns RBI overlooked the fact that growth, ment-appointed directors on the boards of PSBs? Or The Sebi employees’ association has written to the prime minister, about stability. not NPA resolution, is the best way imposing fines on PSBs that do not fill vacancies in pointing out that transferring the regulator’s surplus automatically to the The significant regulatory fail- out of an NPA crisis. top management or the board for long spells? Or ure, according to Patel, was allowing Patel says that the RBI’s February specifying a minimum compensation for indepen- Consolidated Fund of India is tantamount to regulatory action becoming a credit boom to happen by relaxing 2018 circular removed banks’ discre- dent directors on bank boards? Independence is not “a kind of additional tax on market participants”. This is broadly correct. norms for company, group and non- tion in dealing with defaults. There given on a platter, it often has to be wrested. The letter goes on to warn that “perverse incentives” would be created. banking financial company (NBFC) was a clear message to bankers: No If indeed regulation can’t be effective, reducing the Governments always want to raise revenue, while Sebi has broader concerns exposure. There is some merit in more extend and pretend. The RBI dominance of PSBs is one answer to the problem.This such as market stability. A moral hazard problem would be created, in which this contention, although it’s not FINGER ON THE placed 11 PSBs under the Prompt is already happening. The share of PSBs in banking these two incentives would clash. obvious that growth of 20 per cent PULSE Corrective Action (PCA) framework assets is down to 66 per cent and it should be down to The control of capital expenditure is similarly troubling. It should be in non-food credit in 2007-12 was that placed restrictions on their lend- 50 per cent in a few years. Do we need to accelerate the up to the regulator to decide if its duties require additional capital expendi- excessive. India’s credit boom may T T RAM MOHAN ing. Alas, says Patel, much of the good process through selective privatisation? Patel does not seem a case of bad business judge- work has since been undone. The say so explicitly. He only asks that the government ture, through discussions of its duly constituted board. The fact is that if ment today. However, neither busi- February 12 circular was struck down assess whether its return on equity at PSBs is adequate. Sebi feels it is earning too much through fees on market participants, its nessmen nor bankers nor the regulator could have by the Supreme Court and this raised doubts over the It’s not all gloom and doom in Indian banking. current mandate would mean that it would reduce its fees to broaden the anticipated the global financial crisis of 2007 that ability of the RBI to give directions to banks on NPA The RBI’s Large Exposure Framework is a big leap market. If it requires updated facilities and more staff to monitor increasingly derailed major projects set in motion earlier. resolution. The government relaxed the PCA frame- forward in managing risk. As Patel concedes, there is complex financial markets, then the decision on this matter should be taken Public sector banks (PSBs) account for most of work and brought five PSBs out of it. improvement in the assessment of loans. The process by the regulator with the consent of the board, not by the finance ministry. the NPAs. Since government spending is constrained The former governor may have spoken too soon. of appointment of chairmen and managing directors This is fundamental to what regulatory independence means. The govern- by the fisc, it uses PSBs to pump-prime the economy Within days of him giving his talk, the RBI issued a at PSBs is more rigorous than before. Fifty years after ment should rethink its insistence, especially as the stability and regulation or boost preferred sectors. Over time, this results in revised circular on NPA resolution to replace the bank nationalisation, it would be unfortunate if we higher NPAs and capital infusion into PSBs by the February 2018 circular. The new circular provides a were to substantially abandon the public sector model of the Indian markets are very much in the broader national interest. government. Bank lending to infrastructure and relat- time-frame for resolution that is more realistic. It does precisely when the signs are promising. ed sectors was thus a form of deferred government away with the draconian principle of declaring even a spending. One wonders whether that is as terrible single day’s failure to make repayment as default. It T he writer is a professor at IIM Ahmedabad

tleman who was a world champion of “rac- was inviolately English”. kho-kho, marbles, gilli-danda, and others. quets”, a forerunner of squash, and was in As the author points out, Bluden’s book Mr Modi said traditional games enhance An imported obsession London in 1911 to defend his title. The had no subtitle since there could only be not just physical ability, but also logical cricket team found time to visit the bouts one Cricket Country. Mr Kidambi’s work thinking and make us aware of "our culture undivided and independent India. against, the forces of empire.” If the team’s of nine Punjabi Muslim pehelwans, or reverberates with what Mr Nandy in 1989 and traditions". Cricket caught the popular imagination visit to England was to affirm the imperial wrestlers, including disciples of the famous wrote in The Tao of Cricket that cricket is The just concluded cricket World Cup later, mostly after India’s 1983 World Cup bond at a time of political upheavals in Gama Baksh. an Indian game accidentally discovered by had millions watching, but market forces win. India’s famous cricket team that defeat- British India, its composition was less rep- Professor Kodi Ramamurti Naidu, the English. Subsequently, Mr Guha in A have discovered there is money to be made ed West Indies and England in 1971 had little resentative of Indian social realities. The dubbed the “Indian Hercules” and known Corner of a Foreign Field: The Indian History from north India’s fascination for kabaddi; representation from eastern India, and team had six Parsis, three Muslims and five for his “astonishing displays of strength of a British Sport, seemed to celebrate the football is suddenly in vogue with the urban BOOK REVIEW Bishan Singh Bedi was the only represen- Hindus, including two Dalits. Bhupinder and endurance”, was another Indian who popularity of cricket as a victory of the idea youth and hockey is seeing better days. tative of the north to be a member of both Singh, the Maharaja of Patiala, all of 19 years drew crowds in England, and had become of Nehruvian India. Athletes like Hima Das are emerging from ARCHIS MOHAN the tours. One only need listen to Mr Bedi old and anxious about his place in the impe- a “totemic figure among nationalists Mr Guha argued that cricket’s popularity distant corners. Cricket's popularity in India and Kapil Dev to understand how parochial rial establishment, led the team. eager to promote indigenous forms of had proved socialist leader Ram Manohar coincided with economic liberalisation. The his book “charts how the idea of and steeped in Englishness the Indian The author has written engagingly physical culture.” Lohia and Rashtriya Swayamsevak Sangh’s next cricket World Cup will be held in India. India took shape” on the manicured teams of that era were. about the Parsi pioneers, who overcame As the cricket team spent time in M S Golwalkar wrong. Both considered the With England finally winning a World Cup, Tcricket pitches of Mumbai long In his exhaustively researched book, British resistance to start playing cricket England in 1911, the flagbearers of nation- sport a sign of British imperialism and there is renewed interest in the sport in the before the country gained independence, Prashant Kidambi, associate professor of in what was then Bombay in the late 19th alism was Mohun Bagan football club that implored people to play indigenous sports country of it birth. But has the sport reached and not so much on the muddy football colonial urban history at the University of century. There is also a chapter on “Ranji” defeated the East Yorkshire Regiment in an like kabaddi instead. While cricket remains its zenith in the land it made its own at least maidans of Kolkata or the uneven hockey Leicester, argues that the Indian cricket and another on the travails of the Patiala IFA Shield match thousands of miles away popular, the construct of a Nehruvian India in the last couple of decades? fields of Lahore and Amritsar. team that visited England in 1911 was the royal, the team’s captain. Another on the The author has followed Ashis Nandy never permeated mass consciousness. Incidentally, undivided Bengal and first effort at putting together a “represen- “Indian Summer” in England in 1911, to and Ramachandra Guha to delve into the Prime Minister Narendra Modi has res- Punjab were provinces that sent the most tative national” team. That team was no coincide with the ‘Festival of Empire’ and history of popularity of cricket in India urrected a combination of Lohia and CRICKET COUNTRY: The Untold freedom fighters to the Cellular Jail in symbol of nationalistic fervour aroused by grand coronation ceremony in London, is and its larger influence. The title of the Golwalkar in politics. He is yet to question History of The First All India the Andaman and Nicobar Islands. the Swadeshi movement of 1905 and the a delightful read. book is borrowed from English poet the frenzy around cricket but on occasion Hockey and football were by far the more partition of Bengal, which the British were If Ranjitsinhji is considered the father Edmund Blunden’s 1944 book, where he implored in his Mann ki Baat broadcasts Team popular sports among the masses in forced to undo in 1911. of Indian cricket, few remember his con- “reaffirmed the deeply entrenched view (of May 27, 2018) for people to play and pre- Prashant Kidambi northern and eastern regions of both The team was “constituted by, and not temporary Jamsetji Merwanji, a Parsi gen- that cricket was truly authentic when it serve traditional Indian sports like pitthoo, Penguin, ~699, Pages: 453