WEEKEND LIGHTER: Self Reliance in a Global Society

WEEKEND LIGHTER: Self Reliance in a Global Society
(December 3/4, 2016, No.51/2016)
Weekend Lighter is posted every Saturday @mgwarrier.blogspot.in
Feel free to mail your views on this edition of WL to mgwarrier@gmail.com
We’re all despots!
Opening remarks
Despotic criticism*
This refers to the report “Notes withdrawal, a despotic action: Amartya Sen” (Business Line, December 1). Nobel Laureate Amartya Sen has not added to his glory by describing demonetization of high value notes by India as a “despotic action”. Stretching the argument, any government action, anywhere in the world can be alleged to be ‘despotic’.
Demonetization has been used as a tool in currency management in India and elsewhere in the world also in the past. This time around (demonetization announcement by Prime Minister Modi on November 8, 2016), India really did not ‘demonetize’ the Rs500 and Rs1000 notes in the strict sense of the word demonetization. Leaving the sanctity of the promise and the government guarantee on the currency notes in tact, it was announced that these notes will not be ‘legal tender’ from the midnight of November 8, 2016. There is substance in the criticism that backward and forward linkages were not perfectly tied up by GOI and RBI before making the crucial announcement and going ahead with the implementation. These related to sucking out high denomination notes from semi-urban and rural areas in advance, increasing supply of lower denomination currency across the country, readying ATMs for handling new notes and having a monitoring mechanism overseeing currency distribution across geographies. But, such lapses have been, by and large, condoned by the people of India who have taken the measure in right spirit, recognizing the triple objectives of fighting black money, fake currency and influence of high denomination currency stock on terrorism.
The other subjects, namely capitalism and ‘trust’ mentioned by Sen have wider connotations and perhaps he is more aware than us that capitalists are very selective while handling issues like trust and human rights.
M G Warrier, Mumbai
*A brief excerpt from this was published as a letter captioned “We’re all despots” in The Hindu Business Line, December 2, 2016  
Recent responses
Cooperation must succeed

On December 2, 2016, Supreme Court will be hearing the plea from 14 District Central Cooperative banks from Kerala ‘seeking a nod to transact business like banks’, along with a bunch of petitions on demonetization of Rs500 and Rs1000 before the Apex court. The problems faced by cooperatives in Kerala, post-demonetization, have much deeper roots and they have, beyond legal implications that will be gone into by the Supreme Court, jurisdictional, historic and political implications, which need to be addressed ‘out of court’.
Post-independence, though India’s development initiatives heavily depended on the efficient functioning of public sector undertakings (central and state level) and cooperatives (as commercial banks did not reach out to semi-urban and rural areas, majority of the rural population depended on various categories of cooperatives), both these institutional systems failed to get the nurturing needed from governments to change with the times and work efficiently in a fast moving, competitive world.
Cooperation being a concurrent subject, cooperatives became a ‘no man’s land’ in regard to legislative support, development of infrastructure and most important, skill-development and acceptance of new technology. Political leadership, across ideologies, tried to take advantage of the helplessness of cooperatives by trying to control their affairs with an eye on the huge resources they managed. Kerala CM Pinarayi Vijayan was not exaggerating, when he said, some of the primary cooperative societies in Kerala, manage finances much larger than the size of the banking business handled by some of the urban cooperative banks licensed by RBI to ‘do banking business’. What he forgot to tell is, for decades, cooperatives in Kerala have been short-circuiting the regulatory system with the knowledge of the state government. The cooperative system in India needs a cleansing, not by court interference, but through a coordinated effort in which RBI, GOI and state governments should play their respective roles. Sooner this happens, the better for the country.
M G Warrier, Mumbai
Centre-state relations
Louise Tillin’s article “The centralizing instinct” (The Hindu, November 28) opens a debate on right notes and needs to be taken forward. Many things have changed in India in the last 65 odd years after ‘We The People’ gave the Indian Constitution to ‘Ourselves’. To look at some select areas, for the first two decades that followed the adoption of the constitution, the country at national and state levels was ruled by Congress, the size of the economy which was small in 1950’s has now grown multi-fold and geographical divisions too have undergone changes.  All these call for appropriate adjustments in resources mobilization and its distribution, sharing of responsibilities between Centre and states and a re-working of the federal system of governance which we accepted in the first place.
In 2014, Modi coined the new concept of cooperative federalism and it was best suited for India in the given circumstances. The Prime Minister needs to be credited with follow up efforts in this direction. But, the political system, of which his party (BJP) is a major participant now, was not supportive of the PM’s somewhat ‘consensus’ approach to economic development. This article could form the basis for building up a healthy debate on the structural and legislative changes necessary for a reasonably rational sharing of resources and power between Centre and the states.
M G Warrier, Mumbai
Self Reliance in a Global Society
M G Warrier
On November 8, 2016, when a face book post that flashed on my mobile screen mentioned about the fate of Rs 500 and Rs1000 beyond midnight that day, I took it as a usual social media joke. But outside my room TV was on, we quickly woke up to the reality. I slept half an hour late that night. What follows incudes also the thoughts that helped me sleep in peace that night and ever after.
Sometime back I had written about the advantages of "A world without money". Never had imagined that "A world with less money" will emerge so soon. We, four of us, me, grandson, his mother and grandmother together had cash-in-hand of about 30k, I estimated. Of that, more than ninety percent had lost legal tender status. 
As I have not learned Economics as a subject, unlike Swamys, I have freedom to use common sense. My thoughts went back to 1950’s when my father’s monthly salary was Rs15 which was paid occasionally. Those days, provision was purchased on credit, immediate necessities like kerosene was brought from a nearby ‘tea shop’ by bartering one or two coconut/s or against the dues from the tea shop towards one or two ‘glasses’ of milk which used to be given there out of the ‘surplus milk’ my mother managed to squeeze from a milch cow we reared. Practically, it was a cashless society. That was, for me, the pre-industrial society.
I have no special fascination towards ‘domestic’ goods. If I can sell paddy at a higher price and buy wheat at a cheaper price, I don’t mind eating the wheat produced elsewhere. As an individual, as a state, as a nation or as ‘groups’ of nations, the ultimate objective should be to produce enough goods, add value by working efficiently and ensure a healthy, peaceful, secure life for self and family or the citizens. Today’s world, the problem is, more than half the resources are deployed in unproductive and destructive sectors like war or its preparations and ugly show of affluence. If the world’s resources are managed and shared judiciously, the small Global Village on planet Earth will be a self-sufficient Welfare State.
For me, there is nothing like domestic and foreign. I have visited majority of the states in India and half a dozen neighboring countries. Most of the people I came across were loving, sharing and caring. If money, power and “money power” can be managed with some sanity, humanity is still safe.

Blog Post No: 2456/02122016


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