Omkar Goswami

What if COVID-19 Had Struck in November 2018, Months Before the General Elections?

The government’s response to migrant workers’ pains would likely have been vastly different.

The author posted this article on Facebook after the Economic Times reportedly refused to publish it.

With the finance minister announcing five sets of reform and relief measures, it is time to assess these.

One way of doing so is to examine which proposals need direct fiscal support, which require monetary assistance via the banks and the Reserve Bank of India (RBI) and which constitute policy reforms. This has been done by several economists. The consensus is that of the total package valued at Rs.20.9 lakh crore or 10.3% of GDP, the direct fiscal cost — or cash out of the central kitty — is a tad over Rs.2 lakh crore or around 1% of GDP.

I suggest a very different political economy perspective by posing a counter-factual: What might have been the relief and reform measures if COVID-19 struck India in November 2018, six months before the 2019 general elections?

If that had happened, Prime Minister Narendra Modi would have scurried to respond very differently, knowing that he could face the wrath of the ballot box in six months. Today, instead, he reigns in the comfort of ruling for another four years before encountering the nation’s voters yet again.

Also read: Nothing Really New: Stimulus Package for Health Sector So Far Has Been Unimpressive

This lens is important. We now know of the myriad anguishes of the pandemic. These would have been exactly the same had COVID-19 hit us in November 2018 instead of March 2020. The real issue is whether the government’s response to these pains would have been fundamentally different if it were six months away from the general election.

You bet it would.

As an example, instead of making a mockery of five kilograms of cereals and one of channa a’piece per month for three months to the 80 million out-of-jobs and near destitute workers amounting to Rs 3,500 crore, the government would have earmarked an extra Rs 2,000 per family per month for three months. Assuming a family size of five, this would have required the exchequer to fork out an extra Rs 96,000 crore. With no threat of elections, you can give 80 million people a handout of cereals and lentils.

The 20 crore women Jan Dhan account holders would have been offered Rs 1,000 per month for three months leading up to the elections, and not Rs 500 per month promised today — upping the ante by another Rs 30,000 crore. Equally, instead of increasing the daily wages under the Mahatma Gandhi National Rural Employment Guarantee Act by Rs 20 — or an additional fiscal outlay of Rs 40,000 crore — Nirmala Sitharaman would have probably increased it by Rs 30 to Rs 212 per day, thus raising expenditure by Rs 60,000 crore. She would have also helped augment state finances by persuading the Reserve Bank of India to enhance the ways and means advance limit by 75% — instead of 60% — and significantly extend the overdraft duration facility.

I could continue in this vein, but shan’t. The point is that if COVID-19 hit us six months before the 2019 general elections, the greatest focus would have been on how to get cash in the hands of the poor, the out-of-job migrant workers, to give more funds to the states who are bearing the brunt of the crisis, and to offer desperately needed working capital assistance to the micro, small and medium enterprises (MSMEs). In fairness, there has been succour for the MSMEs. We need to see how rapidly such assistance is offered and taken up.

Packages announced six months before the election would not have wasted time on policy decisions such as privatisation of public sector enterprises, removing Coal India’s monopoly, increasing foreign direct investment limits in defence production, reforms in aviation, privatisation of power distribution companies in the Union Territories, and the like. Not that these are useless. But none will create the demand spur needed to lift the economy from the COVID-19 crisis.

Also read: After the Lockdown Relief Package, What Comes Next for the Indian Economy?

With the comfort of four more years at the helm, the government has chosen to take a distinctly parsimonious fiscal call on rehabilitation and relief. Excluding the relatively small direct fiscal support to MSMEs, total relief coming from the exchequer amounts to Rs 1,78,700 crore, or an incremental 0.8% of GDP. The government’s assumption seems to be that in the coming three to four months things will normalise, and migrant labourers will return to the cities for work. So, why spend more at this stage?

The government may be right. But it is thinking just like Neville Chamberlain who was the UK’s chancellor of exchequer between 1931 and 1937; or like Andrew Mellon and Ogden Mills who were secretaries of the treasury of the US. Instead of boosting demand, they tried to cap their budgets, which worsened matters during the Great Depression.

Some economics is invariably right, especially in a slump such as this. And it says that you need to forget about the size of the fiscal deficit; stop worrying about the rating agencies; and fret not about inflation, for there will be little or none in the next six months. You must put cash in the hands of people who need it the most and, thus, boost demand.

Learn from what the US, the UK and the Euro area are doing. Because if COVID-19 hit us in November 2018, you would have done all of that. Yet, why learn? We have four more years, don’t we?

Omkar Goswami is an economist, economic historian and a director of several listed companies. He is the executive chairman of CERG Advisory.

Dalrymple’s Latest Puts the Machinations of the East India Company Centerstage

One might quibble about some historicity and emphasis, but The Anarchy: The East India Company, Corporate Violence and The Pillage of an Empire may just be Dalrymple’s most ambitious tome yet.

William Dalrymple has done it again. After reading his The Last Mughal: The Fall of a Dynasty, Delhi 1857, I had thought that this must be his zenith in the oeuvre of popular writing of history. Not so – his Return of a King: The Battle for Afghanistan was as excitingly written.

Dalrymple has returned with his most ambitious tome yet, The Anarchy: The East India Company, Corporate Violence and The Pillage of an Empire. Ambitious on account of its historical scale and scope, the book is 557 pages in length, and deals with most of India – starting with the setting up of the East India Company in 1600 and ending in 1833 when the British Parliament severely limited the Company’s charter, by when all of India that really mattered had been won by the Company.

The Anarchy: The East India Company, Corporate Violence and The Pillage of an Empire
William Dalrymple
Bloomsbury Publishing, 2019

To give a flavour of its principal characters, the book has Robert Clive, Siraj-ud-Daula, Mir Jafar, Mir Qasim, Shah Alam, Ghulam Qadir Khan the Rohilla, Shuja ud-Daula, Philip Francis, Warren Hastings, Edmund Burke, Haidar Ali, Tipu Sultan, the brothers Wellesley (Richard the governor general and Arthur, later the Duke of Wellington as an army commander), the Maratha chieftains… the list goes on. With such characters, The Anarchy spans a huge geography: Madras, Mysore, the Maratha territories, Bengal, Bihar, Benaras, Lucknow, Allahabad and Delhi.

Given this scale and scope, it is difficult to review the book in its entirety. Let me, therefore, describe one large chunk — Dalrymple’s narrative of Warren Hastings (1732-1818), the Governor General of Bengal from 1773 to 1785.

Bitter battles

During his first stint in India (1750-64), Hastings demonstrated his proclivity for hard work, governance, his learning and love for Bengali, Sanskrit and Persian, his concern for the native administration, and his resentment of the trading abuses that were being carried out by the Company’s servants.

According to him, exploitation by the Company’s agents after the Battle of Plassey (1757) were so “scandalous” that he could “no longer put up with them without injury to my own character… I am tired of complaining to people who are strangers to justice, remorse or shame”.

Unfortunately, the Calcutta council rejected Hastings’ proposals and he was fiercely criticised by other members, many of whom had profited from private trade. Disappointed in the Company’s self-seeking ways, Hastings resigned and left for England in 1764.

Having overspent his savings in London and run up huge debts, Hastings needed to return to India to recoup his finances. After securing a senior post in Madras, he sailed in 1769 and, en route, had a rollicking affair with Marian, the Baroness von Imhoff, who he subsequently married in 1777.

Thanks to massive debts that the Company had piled to finance its campaigns in Madras and Bengal, the British parliament had to intervene in 1773 with a bail out which came with greater parliamentary oversight. One such was to insist that the job of Governor General go to Hastings, then a 41-year old India veteran. With a caveat that there would be three government appointed councillors along with a fourth already in Calcutta to oversee the Governor General’s work on behalf of the parliament.

Also read: Digging Up British Empire’s Bloody Legacy in India

One of the three councillors who stepped ashore in Calcutta was Philip Francis – a brilliant character consumed by sarcasm, malice and bile. In Dalrymple’s words, “Francis had arrived in India already convinced that Hastings was the source of all the evils and corruption of Bengal”.

Led by Francis, the three parliament-appointed councillors opposed virtually any move that Hastings proposed as the Governor General. Dalrymple writes that “from the day of his arrival in Calcutta [Francis] worked hard to bring Hastings down, to block all his initiatives and to reverse all the work that he had done”.

For six years, this bitter feud continued. Finally, on August 14, 1780, Hastings penned a public minute denouncing Francis as a liar and braggart. The following day, Francis challenged Hastings to a duel.

At 5.30 am on August 17 on the western edge of Belvedere in Calcutta – Hasting’s house, and now the National Library of India – the duellists arrived with their seconds. Francis’ first attempt failed as the pistol’s hammer snapped; a replacement was brought; his second attempt also failed as the gunpowder was damp.

Finally, both fired. Francis missed. Hastings struck, and the ball went through below Francis’ shoulder. It was an inconsequential wound. Francis recovered to soon return to England and continue troubling Hastings from there.

In the meanwhile, the once powerful Company that had won the Battle of Plassey in 1757, defeated Shuja ud-Daula’s and Mir Qasim’s troop in the Battle of Buxar in 1764, and forced the Mughal emperor Shah Alam to confer the Diwani (revenue collecting rights) of Bengal at Allahabad in 1765, started facing rivals in the south – from Mysore under Haidar Ali and his son, Tipu Sultan. Trained in the latest European techniques of cavalry, rapid fire and cannon placements, the Mysore army was a formidable force, with both Haidar and Tipu believing that “the supremacy of the English was a source of evil to all of God’s creatures”.

Also read: To Understand the Nature of Britain’s Debt to India, We Need to Follow the Money

In August 1780, 5,000 of the Company’s troops under Sir Hector Munro of Buxar fame marched out of Fort St. George in Madras to confront Haidar Ali. A second force of 2,800 sepoys plus newly arrived Highlanders under William Baillie was to join them. In early September, at a small village of Pollilur, Baillie faced the might of Tipu’s troops and artillery, soon joined by Haidar’s huge contingent. It was a massacre, “the severest blow that the English had ever suffered in India”.

Hastings realised this was more than just a military defeat. It may have been the augury of greater catastrophes. Over the next two years, therefore, he used his diplomatic skills as well as carrots-and-sticks to break the Triple Alliance between Haidar and Tipu, the Marathas and the Nizam of Hyderabad, and to make one powerful Maratha chief, Mahadji Scindia, a British ally. The Company’s territories survived – but by a whisker.

When Hastings finally resigned in 1784 and returned to England, he faced his most serious crisis. Instigated by Philip Francis, and prosecuted by Edmund Burke, proceedings for his impeachment commenced on February 13, 1788 at a packed House of Lords. As Dalrymple writes, “It was the nearest that the British ever got to putting the Company’s Indian Empire on trial”.

Warren Hastings was accused of the rape of India – of extortion, “wanton, unjust and pernicious exercise of his powers”, of “cruelties unheard of and devastations almost without name” and many other crimes by a man whose heart had “blackened to the very blackest, a heart corrupted, gangrened to the core” [Burke’s opening speech].

Also read: A Personal Rejoinder to British Raj-Haters Masquerading as Historians

After a long narration of Hasting’s alleged crimes, came Burke’ famous climax: “I impeach, therefore, Warren Hastings, Esquire, of High Crimes and Misdemeanors. I impeach him in the name of the Commons of Great Britain in Parliament assembled, whose Parliamentary trust he has betrayed… I impeach him in the name of the people of India, whose laws, rights and liberties he has subverted, whose properties he has destroyed, whose country he has laid waste”.

Despite such hyperbole, there was no substantive evidence, and the case came to nought after seven years. On April 23, 1795, Warren Hastings was cleared for all charges. But it scarred the 63-year old man and led to what he described as “years of depression and persecution… with language of the foulest abuse, aggravated by coarse and vulgar epithets”.

How does one evaluate Warren Hastings?

As Dalrymple writes, he “was certainly no angel; and the East India Company under his rule was as extractive as ever”. Towards the end of his tenure as Governor General, Hastings took to a more “pseudo-monarchical and even despotic idea of his powers”. When forced to quickly raise money to fight Haidar Ali and Tipu Sultan, he arm-twisted the Company’s princely allies to ‘contribute’.

William Dalrymple. Credit: Wikimedia Commons

Equally, I agree with Dalrymple that Hastings was the most responsible and sympathetic of all officials that the Company had hitherto sent to India. From his first positing, Hastings railed against the way Company officials exploited the country and mistreated Indians. He took measures to ensure that the population would not suffer as it did during the Bengal famine of 1770, which included building the great grain Gola in Patna that survives till today.

Here was a man in the late 18th century, the leader of a conquering nation, who had a deep love for India its citizens. Fluent in Bengali, Urdu and court Persian, he also learnt more than rudimentary Sanskrit. Under his patronage the Asiatic Society was founded in 1784 — among whose early projects was the translation of the Bhagavad Gita, for which Hastings penned a marvellous introduction.

One might quibble about some historicity and emphasis, none of which takes away from the fact that The Anarchy is a good read. I would recommend it to any lay reader who wants to understand the lawlessness and chaos in India from the late 18th and the mid-19th century, and the machinations of various players as well as of the Company – which bankrupted itself as it annexed the land.

Omkar Goswami is an economist, economic historian and a director of several listed companies. He is the executive chairman of CERG Advisory.

How Do I Define My Nationalism?

Gandhi’s vision of nationalism is being replaced with Hitler’s vision of Nazism, and as a secular spectator, this is disheartening at best.

Recently I watched a video of a 2016 lecture by Professor Prabhat Patnaik from Jawaharlal Nehru University. Patnaik, known for his leftist political opinions as well as his scholarly work in economics, addressed nationalism in this lecture, held at a time when the nation was up in arms over Kanhaiya Kumar and JNU’s student politics. Patnaik made the point that national development has shifted to a capitalist approach. This is something worth thinking about in our current scenario.

Concluding the lecture, Patnaik said:

Consider first an obvious point, here is a government that has sought to browbeat the students at the Pune Film Institute, the Hyderabad Central University, JNU and the Department of Fine Arts of the MS University of Baroda (MSU). These are among the finest institutions in India and their destruction only makes the country parasitical on institutions located in metropolitan countries. In short, in the name of ‘nationalism,’ we are, paradoxically, making our nation parasitical on advanced nations. But this inevitably follows the promotion of an aggrandising nationalism in a Third World country that prioritises repression over tolerance.

The pride I felt at hearing my university mentioned in his speech had slowly melted away by the end of Patnaik’s sentence. I was disheartened, but acknowledged the truth in what was being said. It’s no secret that the BJP has changed the culture of MSU since it’s been in power in Gujarat.

For instance, all of MSU’s 15 functioning messes and over 20 canteens now only serve vegetarian options. Finding eggs in a canteen is a rarity. And this is just a small example.

However, Patnaik was actually referring to new developments in a decade-old case concerning the university. In 2007, a final-year postgraduate student, Srilamanthula Chandramohan sparked an ‘obscenity row‘ with some of his paintings. We feel the ramifications of this event even today.

The paintings in question included nude portraits of Jesus and Durga, which irked the church as well as the BJP. It spread from a university-level issue to a wider concern, forcing the administration to intervene.

Students protesting and covering the Faculty of Fine Arts in black tarpaulin sheets, Vadodara, 25 June 2007. Image courtesy: Students of the Faculty of Fine Arts. Source: Akansha Rastogi and B.V. Suresh

Students and professors alike came out in support of Chandramohan, but the university’s administration, backed by the BJP, did not. In fact, the faculty dean who refused to act against the protesters was sacked. The university panel which had convened to judge the validity of the complaints against Chandramohan’s paintings, decided against him (and so, against artistic license). Chandramohan, despite being the topper of his batch, was denied his degree.

Having waited for his degree and a response from MSU for over a decade, the artist seemed to break. In Feburary 2018, he entered the vice chancellor’s office and set it on fire, leading to his arrest. As a result of our prejudiced system, a once vibrant artist was now facing serious criminal charges. This is a prime example of moral policing at our universities. We’re never asked to seek inspiration from Ajanta-Ellora, but instead told to criminalise independent points of view.

As Patnaik said in 2016, we live in very difficult times, where a supposedly collective perception of nationalism has been branded the ‘correct’ one and is being sold everywhere in the country. Today’s nationalism prioritises majoritarianism instead of the freedom of its people. Gandhi’s vision of nationalism is being replaced with Hitler’s vision of Nazism, and as a secular spectator, this is disheartening at best. We are the ones indirectly participating in the mass disruption of our constitutional principles.

Hard times, Oliver Twist!

Ujjawal Krishnam is an undergraduate research scholar in the department of physics, at the Maharaja Sayajirao University Of Baroda.

Remembering MDC, Economist, Teacher and Institution Builder

Brilliant economist who helped establish the reputation of the Delhi School of Economics as the country’s leading teaching centre for the subject.

File photo of Mrinal Datta Chaudhuri

Mrinal Datta Chaudhuri (MDC), who passed away in Pune some days ago, a city far removed from being his own, was a very special man. As the days pass, I think of him each morning — less so as a high flying character called MDC who was a legend of the Delhi School of Economics, and more as a deeply thinking man who was a mentor, a colleague and person who belonged to a tiny league of gentlemen who I had the privilege to know and interact with. As a person known to imitate MDC’s clipped Sylhet-Boston accent, I could easily regale you with hugely funny stories of this larger than life man. But I shan’t. Instead, allow me to speak of him as Mrinal-da — a man who taught me the fundamentals of economics; one who I deeply treasured as a colleague; a person who was forever inquisitive of knowledge; who enjoyed the elegance and precision of an argument; and who showed how one could be fundamentally liberal and free of the slightest patina of meanness.

Mrinal-da could have been the top of the pops. After studying in Santiniketan and Presidency College, Calcutta, he secured an all-paid-for scholarship to do his Ph.D. at the Massachusetts Institute of Technology (MIT) under Paul Samuelson. Those were the heydays of MIT. Other than Samuelson, Mrinal’s teachers were Robert Solow, Franco Modigliani and Kenneth Arrow — four giants of economics who won the Nobel Prize. His class-mates were the likes of Joseph Stiglitz and George Akerlof, also Nobel Prize winners.

That’s not all. Growth economics was the rage those days, and the most challenging variations were embedded in the two-sector growth models — which required demanding mathematics involving the calculus of variations. The high priest of two-sector models was Hirofumi Uzawa, then teaching at the University of Chicago. Mrinal was selected along with Stiglitz, Akerlof and Eytan Sheshinski to spend a summer with Uzawa to work on various problems relating to the subject. It was akin to Da Vinci selecting you as an apprentice.

Nationalism was in the air. Many who went abroad for their Ph.D. wanted to return and build the academic sinews of a new India. Mrinal-da was no exception. Like Amartya Sen, Jagdish Bhagwati, Sukhamoy Chakravarty and others, he returned home. After a short stint at Jadavpur University, K.N. Raj succeeded in luring him and Sen as full professors at the Delhi School. As he did several others. Soon, Delhi School was the shining star with the likes of Sen, Bhagwati, Mrinal, Sukhamoy, Anirudh Lal Nagar (an outstanding econometrician), Dharma Kumar (who had finished her thesis in Cambridge under Jack Gallagher) and a bit later, Pranab Bardhan.

That dizzying glory lasted a decade or so. By the mid-1970s, Bhagwati, Sen and Bardhan had left, as had Prasanta Pattanaik, a Ph.D. student of Sen and a master of social choice theory. It is difficult for me to judge whether, had he so wanted, Mrinal-da could have returned to a top class university in the United States in the early to mid-1970s. But it was great for Delhi School that he stayed. He, along with Sukhamoy, Nagar Sahab, K.L. Krishna, Dharma, Raj Krishna, Balvir Singh, Om Prakash, J. Krishnamurty, then followed by the likes of Kaushik Basu, Suresh Tendulkar and Sanjay Subrahmanyam, comprised a core group of excellent teachers.

In the process of teaching and administering Delhi School, Mrinal-da wrote less in academic journal than he could easily have. He was fully aware of it, and I shall never forget his valedictory lecture to our M.A. batch, many of whom were going abroad for their doctoral degrees. He asked us to imagine waking up thirsty in a dark, hot summer night and going to the fridge for water. “As you drink the water”, he said, “let not a thought cross your mind that years have passed, and what have I really done.”

As a teacher, he was beyond compare, which was no mean feat considering the likes of Raj Krishna, Nagar Sahab, K.L. Krishna, Om Prakash and Krishnamurty. Each of Mrinal-da’s lectures in growth economics or planning was a study in academic elegance — perfectly counterpoised between the rigours of theory and the essence of understanding the core of what drove that theory. Forty years later, I can still remember how, without a sheet of paper in his hand, Mrinal-da moved from various treatments of business cycles to the Harrod-Domar growth model, then to Solow’s variant, followed by Kaldor’s, and then to the theoretical challenges of two-sector growth models. I can remember the elegance with which he taught us the Harris-Todaro model of rural-urban migration and the sheer heuristic simplicity with which he explained why, in equilibrium, there would have to be urban unemployment. Or, when some students could not understand Harvey Leibenstein’s theory of x-efficiency, how he explained it in terms of a fairy tale involving “Mama Bear, Papa Bear and Baby Bear” — exposited in Mrinal-da’s brilliant accent with a wicked grin or two.

As a colleague and institution builder, he was second to none. He did everything possible to attract good teachers and a young faculty. Forever convivial, he never behaved like a ‘senior professor’ and was available to all, especially his younger colleagues. In staff meetings, he went straight to the point. He wasn’t afraid of taking hard decisions, including preventing the entry of those who he felt were not up to the mark of his beloved institution. Most of all, Mrinal-da wanted to learn from others — economic history, game theory, social choice, the trading world of the Dutch East India Company, financial economics, the theory of incentives, and good old politics. The only thing he abhorred was inelegance — be it in appearance, speech, writing or the world of ideas. And some of rare venom would appear when describing such people, who were always referred to “as that bloody pompous bore”.

As a character, he was the supremo. MDC. Slim. Dark. Handsome. Elegantly dressed. Witty. Girls ogled at him like nothing on earth. They took turns among themselves to line up to a get a lift from him in his Volkswagen Beetle from Delhi School to Mall Road. They gushed about him after that mother-of-all-event. Mrinal-da loved it all. A sexy good-looking graduate school professor. He couldn’t think of himself otherwise. Not even for a waking minute.

Go well, wherever you’ve gone. There’s another Delhi School to win.