Showing posts with label politics. Show all posts
Showing posts with label politics. Show all posts

Saturday, October 18, 2014

Elections in Maharashtra: Have the fires of nativism subsided?

by Naman Pugalia, Renuka Sane, Viral Shah.

The results of the Assembly polls in Maharashtra are anxiously awaited. The four main contenders, the Congress, the NCP, the Shiv Sena, and the BJP have all been part of one of the two principal coalitions, the Democratic Front (Congress and the NCP) which ruled the state for the last 15 years, and the Mahayuti (Shiv Sena and the BJP) that has been the principal opposition alliance.

The battle against the `other'

After these two principal alliances in Maharashtra broke up, ahead of the assembly elections, political parties have been quick to rouse nativist sentiments to secure the Marathi vote. Each political party contesting in Maharashtra, and especially in Bombay, has been vying for the "marathi manoos": the BJP by bringing together Narendra Modi and Chattrapati Shivaji, and the Shiv Sena and the upcoming Maharashtra Navanirman Sena reacting strongly against such a comparison, comparing the BJP leaders as foot soldiers of Afzal Khan, the commander of the Adil Shahi, who was killed by Shivaji. At heart seems to be the idea that the son-of-the-soil will never prefer an outsider as the ruler of the state.

The roots of this angst date back to the Samyukta Maharashtra Movement launched in 1955 in Pune. As Kumar Ketar in the Asian Age says:

the business lobbies, mostly consisting of the Gujarati's and Marwaris wanted Mumbai to be an independent city state or a bi-lingual or autonomous city state. But the mass movement led by Samyukta Maharashtra Samiti foiled that plan. The Marathi angst of the time was one of the reasons for the Shiv Sena's rise, and continues to the reason for the undeclared hostility between the Gujarati-Marwari business community and the Marathi working class.

The Gujarati-Marathi antagonism was mostly restricted to Bombay. In other parts of Maharashtra, it has always been a "Maratha" vote, something that the Congress and the NCP had capitalised on over the last few decades. In the 54 years since Maharashtra was formed, the Congress has ruled the State for 49 years. Of its 17 Chief Ministers, 10 have been Marathas. The outgoing cabinet did not have a single non-Maratha!

By this logic, you would have expected that a national party, with a low support base in Maharashtra in the past, with a Gujarati leader and a Gujarati campaign manager, would not fare that well in the coming elections.

Several commentators, have, however argued that the new Marathi middle class has moved on in its economic and cultural ambitions. It no longer shares the sense of injustice that was the cornerstone of the Samyukta movement, and is in fact, brimming with enthusiasm to participate in the new India. In addition, over the years, migration on a large scale has taken place into Bombay and it's environs, and into Poona, which has created a new set of immigrant voters.

How relevant is the issue of the "marathi-manoos"?

FourthLion Technologies has been conducting message testing polls in the run up to the elections in Maharashtra to tease out voter preferences using its Instavaani. The methodology involves using a control and multiple treatments, and comparing the treatments to the control to get a relative understanding of the persuasion power of different messages.

In a message testing poll, the control is a simple horse-race poll, that asks voters to pick the party or candidate of their choice. The poll on October 1, 2014, showed that 41% of voters preferred the BJP, 11% Congress, 14% Shiv Sena and 11% the NCP. BJP was comfortably in the lead. This is the control.

In each treatment, a particular message is read out to the listener, and then the horse-race question is asked again. Differences from the control give us a sense of the immediate short-term impact of this message on the minds of the populace. These polls are conducted by randomly sampling phone numbers across the entire state. The poll typically strives for 200-400 observations. With assumptions of perfect random sampling of a small sample from a representative population, the margin of error is 0.98/sqrt(n). At 200 samples, the margin of error is 7%, and at 400 samples, it is 5%. These polls are typically carried out as soon as news breaks out, and situations develop in real-time, allowing the observation of the mood of the people within hours after an event.

Here are some results which illuminate attitudes to nativism:

  1. `Prithviraj Chavan is a true son of Maharashtra. He went to school in Karad, which is in south Maharashtra. His mother and father, Premalakaki and Dajisaheb Chavan, went to jail because they fought for an independent state of Maharashtra. No other candidate for Chief Minister has the same legacy of fighting for Maharashtra as Prithviraj Chavan'.
    Would you vote for% of respondents
    Shiv Sena15%
    This shows that the CM's background matters quite a bit, and led 10 percentage points of voters to switch from the BJP to the Congress. This also explains why Prithviraj Chavan led the Congress' campaign in the state - his popularity is higher than the party's.
  2. `In 1960, Gujarati minister Morarji Desai ordered police to fire on activists of the Samyukta Maharashtra Samiti, killing 105 Marathis. The Samyukta Maharashtra Samiti activists won their fight to create an independent state of Maharashtra. Today, the BJP is bringing Gujaratis such as Amit Shah to again place Maharashtra under Gujarati dominance'.
    Would you vote for% of respondents
    Shiv Sena25%
    If there was indeed strong antagonism about Gujaratis, this question should have caused a lot of people to switch votes out of the BJP. However, only 8% of the voters seems to have moved away from the BJP, mostly to the Shiv Sena.
  3. `The BJP has no leaders in Maharashtra who are clean, honest and capable of running the state government. That is why the BJP has to parachute in outsiders like the Prime Minister and Amit Shah to campaign for them. The BJP is afraid to announce who their CM candidate will be because their local leaders, including Devendra Fadnavis and Eknath Khadse, are inexperienced and unqualified to run the second-largest state in India, and also have dozens of criminal charges against them'.
    Would you vote for% of respondents
    Shiv Sena19%
    This yielded the least movement away from the BJP: only two percentage points, which is not statistically significant. 39% of voters continue to root for the BJP. It shows there is far greater confidence in the BJP leadership than in that of any other parties.

This post is about nativism, so we don't talk about other measurement of how voters feel. But one point must be made. None of these treatments work as well as other treatment messages that talk about construction of roads, public works, anti-corruption, etc. These results suggest that the passions of caste and creed are now less important; that the history of the Gujarati-Marathi antagonism has faded from memory. By this logic, the BJP was perhaps on the right track in breaking away from the Shiv Sena, and focusing on its core messages of development and good governance. This is what voters in Maharashtra seem to care about.


We may conjecture that three things are going on:

  1. Part of the reason for this move away from nativist sentiment is the personal appeal of the Prime Minister. His approval ratings, measured in a survey FourthLion did for Mint on August 16, 2014, were highest in Maharashtra and West Bengal. In the bye-polls, there was very little involvement of the Prime Minister, and the BJP did not do well. It is no surprise then that the BJP is seeking votes under the Modi banner, with messages like "Chalo chale Modi ke saath" ("let's walk with Modi") and "Ab ki bar Modi sarkar" ("this time let's make it the Modi administration").
  2. Anti-incumbency against the state government, and the 2 parties (INC + NCP) that jointly governed the state for 15 years, has voters looking for an alternative. Given the BJP's own brand, their assessment of being able to achieve a majority on their own, and the country beginning to taste the benefits of a clear mandate, the BJP has an edge in asking voters in Maharashtra and Haryana to give it a clear mandate in the states too, so that they can work well with the Centre.
  3. But most important is the fact that the Indian electorate has moved on. The desire of the voter to look beyond tribal considerations is the reason why Maharashtra might be the first state to throw up a verdict that challenges preconceived notions about the eternal power of old hatreds.

Does this have implications for regional parties elsewhere in India? Many regional parties may have to go in for radical reconstruction if nativist fires are subsiding. Some, like the BSP, have begun doing this. The entire eastern and southern belt, which sees strong regional parties - West Bengal, Orissa, Telangana, Andhra Pradesh, and Tamil Nadu - could see change. While Jammu and Kashmir and Jharkhand will give us some more intuition in the coming few months, Bihar is going to be the next big test in 2015.

One possible argument is that Maharashtra is a better state, with greater exposure to new ideas, low levels of violence, and a successful economy. In contrast, the backward parts of East India may still be trapped in the old nativist ways. But what about the South? The developments in Maharashtra could be particularly portentious for the better states of the South.

The politics of Bombay has long been benighted by the problem of nativism. What was once a great metropolis has been bogged down by decades of nativist politics. These results show a possibility for becoming a normal city, where the political questions that matter are about efficiently producing local public goods.

Friday, October 10, 2014

Scientific management for election campaigns in India

by Viral Shah.

From 2010, I worked in the Aadhaar project for three years. This helped me learn how Government works and how it does not. The one big takeaway from my experience of working with the Executive arm of the Government was that to bring about true and lasting change, to restructure our defunct institutions and build new ones, one needs to engage with the Legislative arm, with politicians.

Politics in India is a cottage industry. Everybody loves to talk about it; most are cynical; very little is known about how things actually work. The professional ways of working -- which are found in business, science and slowly in government -- are least visible in politics. In particular, the crucible of politics -- the election campaign -- is just black art. In the last 20 years, we have seen family businesses get shaken up, professionalise, and embrace technology and process engineering. We have seen some parts of government do the same. We have seen a transformation of some parts of academiaa. The one place which has seen the least change is politics in general and election campaigns in particular.

This suggests opportunities for achieving important change. Shankar Maruwada, Naman Pugalia and I started a company -- FourthLion Technologies -- to provide professional services to political campaigns. Over a couple of campaigns, we have slowly learned how elections in India work. We have looked at an array of data from various public and private sources, and developed tools and technologies to aid election campaigns in multiple phases.

Elsewhere in the world, election campaigns are run through scientific management. In the US, both the Democratic and Republican parties have voter databases, where one can search for any voter by name. Through a variety of analytical methods, campaigns know fairly well which voters are likely to vote for them, and which ones are marginal, and on which groups of voters, no resources should be expended. Starting with such databases, every voter contact is recorded (a volunteer knock, a telephone call, a letter sent, an email, or a tweet) in the same way companies manage customer services through a CRM system. It took a decade of work for the machinery of election campaigns in the US to get to this stage, to transplant ideas which were well developed in the world of business.

When thinking about election campaigns in India in a professional way, there are many challenges. There are multiple parties, many races are multi-cornered, and with first-past-the-post elections, a candidate can win with as few as 20-30% of the votes. The voter lists are very poor in quality, with every possible error of inclusion and exclusion. They do not capture the large scale of urban migration and are often tampered with. Although the Election Commission of India has made great strides in conducting free and fair elections over the last several decades, much more remains to be done, and the quality of the voter list is perhaps the weakest link in Indian democracy today.

Every election has three natural phases: Registration, Persuasion, and Turnout. A campaign should start 6-12 months before voting date, by registering voters. Three months before the election, voters need to know the candidate and be persuaded, and finally the last week is focussed on "Get The Vote Out", or Turnout. At each stage of the campaign, one has to focus on the message and mobilisation. The message is all about what the candidate says and does, and mobilisation is about execution on the ground, in the digital sphere and in the media. Each stage as a distinct methodology for scientific management, and the problems faced can be quite surprising. As an example, it is not uncommon for 2 to 3% of the population of a constituency to be working for all the candidates, put together, in the last 2-3 weeks. This calls for the processes of large-scale management.

We provide tools and technologies for different parts of the campaign, starting with coalition dynamics, seat selection, analysis of past elections, formulation and testing of messages, calculating the reach of every channel (hoardings, TV, radio, print, etc.), managing call centres, and a control room for the turnout operation and voting day. We use data, analytics, and technology at every stage of a campaign to aid decision making and efficient deployment of resources. Traditional politics often deploys resources in a "Spray and Pray" manner, while we try to combine all available information and intuition so as to use resources more effectively.

In our experience, an incumbent who has a good chance of getting the ticket has a head start as he is able to do preparatory work for the campaign well ahead of time. As emphasised above, the campaign should really start 6-12 months before the voting. All too often, in India, candidate selection is left to the last minute. This makes it impossible to mount a serious campaign, and generally plays in favour of the incumbent. Once we start thinking of an election campaign as a systematic project, this induces the discipline of a minimum time period that is required to execute all the steps, just as is the case with all well planned projects.

On one hand, our thinking about process improvement for election campaigns consciously draws from successful techniques of scientific business management which have been perfected in the worlds of business, science and government in India. Along the way, we have seen that the speed, agility, and scale required in political campaigns in India is something unique when compared with the worlds of business, science and government in India. To some extent, we are seeing innovations in the field of election campaigns that can usefully inform, and sometimes get directly transplanted, into the other three worlds.

We are learning how our democracy works. The accountability is jarring, as any politician will tell you: voters make every possible demand, and speak their mind to the candidate, in as direct a way as can be. Millions of micro-deals are struck with candidates by individuals and groups of people. These are genuine deals about actions of the State and not bribery or corruption. These micro-deals bubble up into the processes of government and ultimately shape policy. It is a rough and tumble world which clashes against our dreams of representative democracy, but it is also astonishing how much this is about representative democracy.

Monday, March 17, 2014

CBI preliminary enquiry on MCX-SX becoming a stock exchange

This is a good time to ruminate on the notion that CBI or Lok Pal should have independence. Underdevelopment is where the police are more dangerous than the criminals. Coercive power coupled with independence is a recipe for trouble. What is needed is far more thinking on how to do sound public administration, on the right mix of independence and accountability. Anger about corruption is not a useful source of good thinking in public policy.

This is also a good time to ruminate on the lack of rule of law in the determination of fit & proper.

Sunday, July 21, 2013

What platforms might work in Indian politics?

High GDP growth has led to structural transformation, with dramatic change in the composition of the labour force. The latest data from the CMIE Consumer Pyramids database pertains to December 2012, and shows the following occupation structure of the Indian workforce:

OccupationShare (Per cent)
Small farmer13.39
Organised farmer8.69
Agricultural labourer8.70
Industrial worker7.92
White collar worker8.44
Manager / supervisor0.53
Support staff6.93
Small trader / Hawker3.32
Self-employed professional4.92
Home-based worker1.50
Wage labourer27.75

How might this influence political platforms?

The success and stagnation of the Left

The Left caters to the interests of tenured employees of manufacturing firms. They were very successful in influencing policies. To a great extent, the Congress stole the Left's thunder by pampering organised labour, and every political party in India treats them as holy cows.

This success undermined Left thinking as a political force. Left-influenced policies hobbled organised manufacturing, and we see only 7.92% of the workforce in `Industrial worker', which most closely fits the support base of the Left. It is ironic that the very success of the Left in shaping the Indian State has marginalised the Left as a political force. The price we pay for being a liberal democracy is the sacrifice of large-scale labour-intensive manufacturing.

The aristocracy of workers in organised manufacturing is grossly overpaid. What matters to their take now is not GDP growth or their marginal product, but their ability to use their privileged position to extract a rent out of the firms that have no choice but to deal with them. Hence, their interest in GDP growth is relatively low.

The role of agriculture

The farm lobby is not a monolithic bloc with unified interests. There are kulaks who seem to correspond to `Organised farmers' and are 8.69% of the workforce. And there are others (`Small farmers' at 13.39% and `Agricultural labourers' at 8.7%) who add up to 22.09% of the workforce. CMIE defines wage labourer as `Wage labourers are those who seek daily wages from non-agricultural sources. Typically, these are industrial workers who work in factories or companies but are not employed on a regular basis in these. Wage labourers also include construction site workers and those working in other non-agricultural activities. This includes a taxi driver who operates the owners' taxi' and hence this excludes agricultural labour. Policies that favour producers of agricultural products in broad terms would thus benefit 30.78% of the workforce (and hurt everyone else, who buys agricultural products). Policies that are more narrowly focused on the interests of kulaks, such as the old-school fertiliser subsidy, are good for 8.69% of voters and bad for everyone else.

India's structural transformation is giving a rapid decline in the share of the workforce in agriculture. While the CMIE data for December 2012 shows 30.78% of the workforce is in agriculture, the oldest available data, for December 2010, shows 32.68%. This is a decline of 1.9 percentage points in just two years. If we guess that on average, in each year, there is a decline of 0.75 to 1 percentage points, then in a decade, we will get to the range of 20.8 to 23.3 per cent of the workforce in agriculture.

Ordinarily, we would expect politics to favour the interests of buyers of food (69.22% of workers) trump the interests of producers (30.78%). Why is agriculture so prominent in Indian politics?  I can conjecture three explanations:
  • As with Industrial workers, the priorities of Indian politics reflect the failure of imagination of the gerontocracy.
  • The redistricting process is slow and for a long time had stalled. This has given an exaggerated emphasis to constituencies where agriculture is important. That Indian politics is a gerontocracy despite rapid economic and demographic change may partly be a consequence of slow redistricting.
  • As with Industrial workers, once unequal policies create a focused beneficiary of distortions, these beneficiaries have a focused interest in lobbying in favour of the status quo. The costs of these policies are dispersed across society and the others don't have an incentive to mobilise politically.
In this context, it is interesting to see that in places like the US, Japan and Europe, there are strong agricultural lobbies that have achieved highly distorted policies even though their vote share has dwindled away to almost nothing. Brad Plumer in the Washington Post has some insights on how this comes about, and suggests that it is a combination of sharp interests of agriculturists in marginal constituencies.

How might competitive democracy construct an interest-based politics

Indian politics has come up with two ideas that transcend caste and religion : catering to agriculture and catering to industrial workers. Both these interest groups are not that salient in today's India. It is interesting to look at the table and puzzle over what might work.

Congress is pursuing the goal of setting up big welfare programs that target agricultural labour (8.7%) and wage labourers (27.75%), adding up to 36.45%. While this is a big chunk of votes, it isn't big enough to close the deal, particularly as in fast-growing India, many individuals within these two interest groups actually want to escape from poverty and welfare programs. Many of them would be interested in a platform that shows a roadmap out of poverty, instead of offering dole while perpetuating it. If even a small fraction comes to mistrust the strategy of dole, it undermines the extent to which this platform will win elections.

I think there is more possibility in a platform of public goods + growth when compared with the conventional wisdom. By definition, public goods (e.g. law and order or the infrastructure of transportation and communications) benefit all. There is no need to split up the vote and pursue narrow constituencies in this. A pro-growth stance is directly good for many sub-components: Organised farmers (8.69%), White collar workers (8.44%), Managers (0.53%), Businessmen (7.91%), self-employed professionals (4.92%), adding up to 30.49% which is similar to the size of the old-fashioned agriculture lobby (at 30.78%). Looking forward, this group will grow while those interested in either agriculture or dole will shrink.

In addition, a large chunk of the remainder of the workforce -- which may have only a weak interest in a pro-growth platform today -- aspires for a better life, particularly the young. The wage labourer of today wants to be a small trader tomorrow, and the small trader of today wants to be a businessman tomorrow.

I would hazard the following guesses:

OccupationShare (Per cent) Dole Public goods Growth
Small farmer13.39 Weak Yes Weak
Organised farmer8.69 No Yes Yes
Agricultural labourer8.70 Yes Yes Weak
Industrial worker7.92 No Yes Weak
White collar worker8.44 No Yes Yes
Manager / supervisor0.53 No Yes Yes
Support staff6.93 No Yes Weak
Businessman7.91 No Yes Yes
Small trader / Hawker3.32 Weak Yes Weak
Self-employed professional4.92 No Yes Yes
Home-based worker1.50 Weak Yes Weak
Wage labourer27.75 Yes Yes Weak

It seems to me that a public goods + growth platform would work better than most people in Indian politics think. Public goods are interesting to all, and the constituency that would strongly favour growth is 30.49% and growing. In contrast, a dole strategy is interesting to 36.45%, and is shrinking.

None of this is relevant if the question that is posed to the electorate is about religion, English, or social conservatism. It may well be the case that the 2014 elections will be fought purely on these questions. But in time, the competitive dynamics of democracy will favour platforms that reflect the interests of the populace, and then these kinds of considerations will matter more.

Tuesday, June 04, 2013

Bureaucrats are not stakeholders

Indian democracy has become quite focused on bringing views of all stakeholders into the policy debate on any question. That is a good thing.

I have an article in the Economic Times today, where I argue that while we do this, we should be careful to not treat officials as stakeholders. When the merger of Indian Airlines and Air India is being evaluated, all viewpoints should be brought to bear on the decision but one -- the views of existing employees of Indian Airlines or Air India.

Sunday, April 21, 2013

Competence in policing

David Montgomery, Sari Horwitz and Marc Fisher have a great story in the Washington Post about how the police tracked down the murderers in Boston. Also see Spencer Ackerman in Wired magazine. On a similar theme, look back at the attack at Times Square in New York.

We in India fare dismally on this. Lacking competence in the police, we repeatedly engage in faulty tradeoffs in security, where police either infringe on the freedom of citizens or resort to brutality against innocent `suspects'. Every time the police quickly solve a case, I worry that they merely tortured some plausible sounding suspect.

Law and order is the most important and most basic public good. Dense urban congregations, which are the essence of modern creative capitalism, are only possible with very high levels of safety. The US is priority #1 for the bad guys, and has had two attacks in 12 years, both of which were followed by outstanding investigations. We in India suffer from thousands of attacks, most of which are never solved. This shows the low capabilities of our law enforcement crew.

We in India go wrong at three levels:

  • Elections have degenerated into competitive subsidy programs; both politicians and voters have stopped focusing on performance of the government on public goods. Left-oriented intellectuals are complicit in this, with an emphasis on inequality and subsidies rather than on public goods. When voters are not focused on public goods, the accountability through elections does not generate feedback loops in favour of better public goods.
  • In this environment, inadequate resources go into public goods, the most important of which is the criminal justice system.
  • Within the criminal justice system, there is little accountability, and we are not seeing feedback loops through which the system is constantly reshaped (within existing budget constraints) towards better performance.
The recent wave of outrage on law and order should ideally help set a new course. See Law and order: Going from outrage to action. Mistreating women is not encoded in our culture or our DNA: it is endogenous to the incentives provided by the criminal justice system. The same Indians behave very differently towards women when placed in alternative criminal justice systems in other countries. If enough voters demand performance from politicians for better law and order, we will get a greater focus on it, in terms of:
  • More top management time. E.g. how many hours per year does the PM work on law and order in Delhi versus how many hours does he spend on NREGA?
  • More money. E.g. how much money do we put into law and order in Delhi versus how much money do we put into NREGA? 
  • More and better people. E.g. how do we get the best and brightest civil servants out of relatively unproductive tasks (subsidies) and into the things that matter (public goods)? How do we increase the staff strength of government in public goods, while cutting the size of government on subsidies? How do we make careers in police, courts and jails more attractive, and careers in education, health and welfare programs less interesting?
  • More analysis. How do we get more research papers on the criminal justice system, and fewer research papers on development economics?

Monday, May 21, 2012

The business of Indian politics

Raymond Fisman, Florian Schulz and Vikrant Vig have a fascinating new working paper: Private returns to public office, which gives us new insights into Indian politics.

We know that elections in India are typically rather close. There is something almost capricious about who wins and who doesn't. The random outcome of an election can, then, be interpreted as randomised allocation into control and treatment. One candidate gets elected, another candidate is very much like him but doesn't get elected.

We can then ask the question: what happened to the wealth of the bloke who got elected? The authors say that the rate of growth of the assets of the person who won grows by 300 to 600 bps per year when compared with the person who lost.

The strongest effects are observed for a person who makes it to being a minister: his asset returns are 1300 to 2900 bps higher than the person who did not win the election.

The paper reminds us of the conditions under which the most fruitful economic research happens today. It's got to be a live and interesting question. A high quality dataset has to be the engine; without good quality data, research is just garbage-in-garbage-out. It's got to persuade us that that the claimed answer is correct. Too often, we in the research profession are failing on these three tests.

Friday, January 13, 2012

Where did we go wrong?

It is a time for deep thinking about what has gone wrong in India. Here are a few excellent takes:

As we watch many train wrecks in India unfold in slow motion, Timothy W. Ryback in the New York Times reminds us about that ineffable substance of the human soul ... that shapes individual decisions and ultimately determines the course of actions, both large and small, that constitute the chain of events we know as history.

Tuesday, June 28, 2011

The impending cabinet reshuffle: A few interesting links

The UPA-2 seems to be trying to come back into the game with a new look cabinet:

Sunday, January 09, 2011

Bombay vs. Mumbai

Many places in India have experienced name changes. I wondered: To what extent do these new names take over? Google gives us interesting bits of information about this question. gives us the ability to measure the extent to which a word occurs in the millions of books that google has digitised. For the Bombay vs. Mumbai question, it shows:
The phrase `Bombay' vs `Mumbai' in books

This suggests that the people who write books are still emphasising `Bombay' instead of Mumbai.

Turning away from books to the web, google gives us two kinds of information: the extent to which either name is used in the stock of material on the net (as of today), and the extent to which either name is used in google searches.

City Share in searchShare in web
Calcutta 0.22 0.25
Bombay 0.19 0.22
Madras 0.11 0.17

In the case of Bombay, this tells us that the old name (`Bombay') makes up 19% of google search traffic and 22% of the stock of content on the web. So this evidence suggests that the new name has been accepted the most in contemporary use with Chennai, less so with Mumbai and further less with Kolkata. I wonder why this would happen.

Friday, September 03, 2010

The gang that can't shoot straight

On the mistakes in the recent CSO data release, see P. Raghavan in the Indian Express.

By the time 3G telephony came about, India was well into the telecom revolution. By December 2007, there were 190 3G networks in 40 countries and 154 HSDPA networks in 71 countries, but none in India. We're now finally getting on with it, and will probably be the last place in the world with 3G telephony.

And there are the failures in organising the Commonwealth Games.

It is enough to make a man worried.

Saturday, August 14, 2010

India's middle income trap

In the Financial Express today, I have a piece on India's middle income trap: Don't take growth for granted. Coincidentally, on the same day, T. N. Ninan in the Business Standard had a piece on a similar theme, and in the Indian Express, Shekhar Gupta ponders where UPA-II went astray.

My thinking about these questions in recent weeks has been prodded by questions about entry of private banks, and by the campaign against C. B. Bhave.

Thursday, July 29, 2010

Monetary policy is easy; Financial regulation is hard

I wrote a column in the Financial Express today, titled Monetary policy is easy; Financial regulation is hard, where I contrast the complexity in public administration of doing monetary policy versus the complexity of getting to good financial regulation.

Friday, January 08, 2010

How leftist is India?

I wrote a column in Financial Express today: How leftist is India?. This draws on the data shown in this previous blog post. I just noticed a piece in The Economist which dwells on related themes which is well worth reading.

Many people wrote me email about this piece. An important criticism of this evidence is that individuals parse questions differently across countries. In India, it's easy to construct questions such as: The government must setup more PSUs so as to give jobs to the people where it will seem that there is overwhelming support for a more socialist position. The main advantage of the Pew data is that they are doing it, across time, and across countries. More fine-grained measurement of political attitudes would surely be nice to have. But we don't yet have such household survey databases in India. The CMIE Consumer Pyramids is good data - but on politics they ask really only one question, that of the most favoured political party.

Friday, December 18, 2009

Difficult times in Andhra Pradesh

Andhra Pradesh was once seen as a state with good governance by Indian standards. In recent years, the problems seen with Satyam, attempts to harass Nimesh Kampani, etc. have led many to question the quality of governance in Andhra Pradesh. Today, John Elliott has an important article in the Financial Times on the difficulties of Andhra Pradesh.

I took a look at the CMIE data on investment projects outstanding to measure the share in the investment projects at hand in India. I found that the action was strongest in state-wise data for projects which were `Announced' (and not `under implementation'). The two states with the biggest decline in the share in India were West Bengal and Andhra Pradesh:

Andhra Pradesh West Bengal
Jun '08 7.46 8.00
Sep '08 6.43 7.31
Dec '08 7.15 8.19
Mar '09 6.20 6.48
Jun '09 6.29 5.71
Sep '09 5.43 5.56

For Andhra Pradesh, the decline over this period was 2.03 percentage points and for West Bengal, the decline was 2.44 percentage points. These are the two biggest declines across all the states in this period.

All these values are a far cry from the biggest share of Andhra Pradesh ever seen -- which was 18.53% in December 2001, when Chandrababu Naidu was chief minister. For a comparison, the peak share seen for West Bengal was 8.25%, which was in March 2008, when the CPI(M) was still a part of the UPA; we can vividly see the decline from that point to 5.56% in the latest data. The full time-series for all states are here.

Tuesday, July 21, 2009

Investment activity at the state level

Ila Patnaik looks at what is happening in the CMIE Capex database on investment in Gujarat, Maharashtra, West Bengal, Andhra Pradesh and Orissa. The measure of interest is: the time-series of the share of the state in overall projects `under implementation' in the CMIE database. Each of these states holds an interesting story.

Also see Kunal Sen in Financial Express on the evolution of governance at the state level in India.

Saturday, May 23, 2009

Second wave of reactions to the elections

Wednesday, May 20, 2009

The decline of the Left

Writing in Business Standard today, Surjit Bhalla has a table of the vote share of the CPI and the CPI(M) put together. I thought it would be useful to see this data as a time-series, so here is the result:

Click on the graph to see it more clearly. Each circle is a data point. The dashed line is a (robust) regression of the Left voteshare on the time trend, with a shift in the intercept in 1991, reflecting the fall of communism. As we can see, the fall of communism seems to have gone along with a loss of vote share of 1.3 percentage points for the Left.

The latest result is a bit worse than the trend line might have suggested: tactical factors went a bit against the Left. At the same time, the CPI and CPI(M) leadership can take heart: the latest result is not all that far from the historic decline of the left, so this does not suggest that the leadership made particularly large tactical errors. What they are perhaps up against is historical forces.

The red coloured plus sign is the linear extrapolation for 2014; the slope implies losing roughly 0.13 percentage points of vote share each five years. (The statistical signifiance is weak; it's a t stat of -1.52).

Here's the R code which you can experiment with:

dates <- c(57,62,67,71,77,80,84,89,91,96,98,99,104,109)+1900
vshare <- c(8.9,9.9,9.4,9.8,7.1,8.7,8.6,9.1,8.7,8.1,6.9,6.9,7.1,6.8)
post1991 <- dates > 1991
m <- rlm(vshare ~ -1 + dates + post1991)
m$coefficients[1]*5 # lose this much each gen. election
png("ic.png", width=550,height=550, pointsize=16)
plot(dates, vshare, type="p", xlim=c(1957,2014), xlab="", ylab="Vote share of CPI + CPI(M)")
lines(dates[1:9], fitted.values(m)[1:9], lty=2, lwd=2)
lines(dates[10:14], fitted.values(m)[10:14], lty=2, lwd=2)
abline(v=1991, col="red", lwd=2)
points(2014, m$coefficients %*% c(2014,0,1), cex=3, col="red", pch=3)
text(1966,9.1,"Regression line pre-1991",cex=.7)
text(2003,7.3,"Regression line post-1991", cex=.7)

Monday, May 18, 2009

18 May 2009 is the reverse of 17 May 2004


Blogger is not handling images properly. Click on the above picture to see it more clearly. If you haven't been watching the action: The application of existing circuit breaker rules meant that the market opened, went limit up, opened again, went limit up, and closed for the day.

What can be traded

The action on the currency, and look at Nifty futures trading at SGX (!).

Vote share

BJP 22.16 18.80 -3.36
BSP 5.33 6.17 +0.84
CPI 1.41 1.43 +0.02
CPI(M) 5.66 5.33 -0.33
INC 26.53 28.55 +2.02
NCP 1.80 2.04 +0.24
National parties62.89 62.32 -0.57

The main story, as I see it, is that the BJP and the CPI(M) (put together) lost a vote share of 3.69 percentage points, and a vote share of 2.02 percentage points was added to INC. Of course, the above are net numbers, there must be much more going on by way of gross flows.


BJP 138 116 -22
BSP 19 21 +2
CPI 10 4 -6
CPI(M) 43 16 -27
INC 145 205 +60
NCP 9 9 0
National parties 364 371 -7

Sunday, May 17, 2009

Best readings on the election results