Independence is a Responsibility - The Honest Truth By Ajit Dayal
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Investing in India - Honest Truth by Ajit Dayal
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20 AUGUST 2010


And so India celebrated yet another Independence Day.

The flurry of articles, TV shows, and deep voiced commentators giving their view of the India of today and tomorrow are drowned in history and soon to be archived.
Life must move on and with every new dawn there is a new topic, a new hot issue to be covered, and a new "recent high" for the Index.

But the joys and frustrations of Independence still remain - even if they are not "topical" to make it to the front pages or to the prime time slots.

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Is Independence a Victory?
At the stroke of that midnight hour which ushered in August 15, 1947 it is true that India did awake to freedom.
Years of battling a colonial power led to a victory.
A victory that was had with the principles of non-violence as the core of the battle.

Many have reminded us that we enjoyed the victory of Independence because of the nature of the enemy. We were rued by and fought the British, not Hitler.
How long would a conversation between the "naked fakir" (as Winston Churchill described Mahatma Gandhi) and Hitler have lasted.
The "civilised" British conceded defeat with probably less bloodshed than if that same policy of non-violence was used on Hitler's armies.
In that sense, history - for all our grievances - was kind to us.

But, after many strokes of many midnights how victorious can we be?
Don't get me wrong, I love our freedom and would not trade it for anything.
But why do we have to even believe that we have to choose between two extremes: Freedom to be in poverty (India) or Controls but wealth (China).

Why could we not achieve the dual joy of freedom and wealth as many have achieved in the Anglo Saxon world, despite their debt-financed consumption binge of the past decade? And yet maintained our dignity as an "Asian" culture.

Independence was the starting point
While I happily quote the wonderful statistics of wealth creation that we all read about as we plan our long term investments, I cannot ignore the poverty around us.

The poverty of being poor is all around us even though it may have been shipped out of the streets of the capital city of New Delhi. But there is also the poverty of a society that seems less caring, less respectful, and in a rush to "grow" towards the Anglo Saxon wealth that I referred to but without any thought of the consequences. Without any recognition of the mistakes and the blunders made by the US or by the UK - and they have made many.

If economic policy is an indicator of the definition and objectives of an Independent India, then there have been some pretty dramatic shifts - each with their own un-intended consequences.

In the 1950's Nehruvian Socialism took us to the "commanding heights" of state ownership along side the investments made by the private sector. But the faster growth of investments by the government and the growing bureaucracy gave birth to a slow response system - too many layers of decision making probably added to a growing disconnect between what people wanted (food, clothing, shelter) and what the government was building (a massive industrial complex covering steel, power, and shipping to name a few heavy industries).

From there we moved to the recognition that basics like food and water mattered, as did a proper defence against the troublesome neighbours. So this led to era of "jai kissan, jai jawan". The focus was back on agriculture and the farmlands. In the 1970's this was enhanced to "roti, kapda, aur makaan" with an effort to control the growth in population via a "hum do, humare do" campaign.

Furthermore, Prime Minister Indira Gandhi, went one step ahead of her father's "commanding heights" and took control of the banks, the insurance companies, and the airlines. To further ensure that Madam was the undisputed Boss, the taxation rates in India no longer incentivised the creation of wealth. The unintended consequence of these economic blunders - and the forced sterilisation program - was an economic stagnation and near bankruptcy of the economy over the next decade.

In July 1991 we began to recognise that there is, indeed, a global economy out there and we had more to focus on than maintaining the integrity of the borders with Pakistan - by itself a huge problem. Ironically, the same Dream Team that was busy pedalling us towards Socialism and their worship for Madam Gandhi now had the distinction of being told by the IMF how to get us out of the mess they had helped us into. So, now we are into "opening up" mode and anchoring our role in the Indian century. The unintended consequences - actually, they now look like very intentional and I-don't give-a-hoot consequences - of this "liberalisation" are a disconnect between what India needs and what Indian policy makers believe India wants.

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So, the Special Economic Zone policies are brought into play to help create large industrial complexes like they did in China. Not a bad objective, but China can bulldoze its way to do whatever it wishes to on anyone's land. Can you dislocate villages in Raigad, or West Bengal, or UP and not have a riot on your hands? The government sold its soul to industrialists and did not get a fair price for the only asset - land - that many have in their fight against poverty. Wake up, New Delhi, India is not China - but if you keep at it we will all be draped in the Red Maoist flags.

And the desire to build roads and encourage the use of automobiles? Don't the planners and politicians read about the oil crisis and how the US and China are both doomed to be locked in geopolitical wars to access oil? When was the last time Germany went to war - and it is one of largest exporters. Maybe they worry less about gas and oil and taking over Iraq or Africa because they use energy more efficiently and have built a public transportation system. But keep up all the car ownership plans and road building plans and we will have to beg for oil and gas. Unfortunately, we cannot go to war to secure our energy needs because most of our bullet-proof vests, guns, and planes may not work as promised.

Because, over the decades, corruption has seeped into every nook and corner of the Indian system.

The act of corruption is a daily religious duty performed by everyone, everywhere, at any time.
From the individual who bribes the traffic policeman to the tycoon who bribes a Minister for re-zoning farm land for building a township.

We tried to outdo China by hosting the Commonwealth Games and look what we have got - the corruption without the end result of dependable stadiums. The worst possible outcome.

Independence was not an objective in itself, just as being a teenager eligible to drive or vote is not an end in itself.
Being Independent was the starting point - of taking responsibility for where we wish to end up.
Instead, like a teenager, drunk with the power of "now I am able to", we were obsessed with our rights and lost sight of our responsibilities.

Yes, the Independence Day celebrations are over, the speeches are made.
It is back to wasting many more strokes of the midnight hour.
It is back to "liberalisation" which is, in many cases, nothing but "crony capitalism".
The kind they practice in Wall Street, Russia, and China - our new role models.

And Tagore's prayer "into that heaven of freedom, my father, let my country awake" will remain an elusive dream.


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Disclaimer: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd. The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author, Equitymaster, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site. To write to Ajit, please click here.


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15 Responses to "Independence is a Responsibility"

R K SHARMA

Aug 21, 2010

Ajit Ji
I n respect of Sachin Kundu's idea of having a dream team of 1500 persons, i urge you to consider this suggestion.
I join voluntarily pro bono.
I am now 61 years old and full of energy with no nagging ailments and no medical problems.
Therefore, i dont think i'll be a liability in any way.... i just need 1 hour at the gym daily.
Perhaps, i know what is to be tackled rightaway without any delay and something that will make a difference in a month or so.I have worked in the government establishments at senior position for 35 years.I have participated in International and national conferences of the different aspects of our criminal justice delivery systems etc etc.
Lets make a start, otherwise someone else will do so as this state of affairs cannot continue for long.

Like 

jalalamd

Aug 21, 2010

Ajitji, we all know about the ills and corrupt behavior and ideas and ideals of the rich and the poor. Even a million reminders or alerts can not change the stage at least in our lifetime.The corruption tendency is deep rooted in less privileged class, given a chance.An hawker may want Rs 1000/ for a kg tomato or a rickshaw puller can demand a 1000/ for a Km.What needed is a workable solution and a leader to take it up.

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Arvind Joshi

Aug 20, 2010

The article is interesting, but you have missed the most important point of "What is the root cause of Corruption"? The title "Honest Truth" itself stinks.
To my mind,it was the philosophy of USSR to wipe out the honest, integrated free individuals-the basis of Communism- so that it will become easy to control the society.
How systematicaly it was implemented in our society?
What was the Income Tax structure in sixties? 97.5%! People were honest then, some of them paid too through their nose as they were charged additional 5% as Wealth Tax. How rediculous? and for how long-almost 20 years?
Who is afool to keep on paying? So the direct result was the generation of No. 2 money! And what was the indirect result, more harmful for the Nation's progress - the exodus of intellientia to USA.
Just this fragment of society, being made dishonest (Is n't this corruption?)the entire society-almost entire-has become corrupt-a cascading effect!
One may argue if honesty is required?
Thanks and regards.
Joshi AV

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vasudev

Aug 20, 2010

Every time we unfurl the national flag on a certain day and dust those old hindi records ('aye vatan' etc) and play full blast to the utter discomfort of the late sleeping non-hypocrites, every time we stand in front of the flag and distribute sweets it is time to know that one more year of untruth has just walked by totally disrespecting the flag and demeaning those who gave their lives for independance.

The very next moment we are out there separating the citizens of India and grouping them (nay: massing them) on the basis of caste, creed, religion, regionalism, reservations, vote banks while opening the gates of this country to the deluge of internal enemies from bangladesh and pakistan...all for the sake of some votes to hang on in power.

Why at all we should have an August 15 tamasha beats me! Does anyone feel charged (and not chagrined) by witnessing this circus of untruths? Only the dead and long forgotten freedom fighter would say: 'someone just walked over my grave'.

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Rajeev Bhatia

Aug 20, 2010

Dear Mr.Ajit,

Very well written article.

We have Independece since last 63 years and basic amenities like Electricity, Water, Food, Housing, Transport etc., are all dreams.

They say Mr.Jawahar Lal Nehru, Mrs Indra Gandhi, Mr Rajiv Gandhi, had a Vision for India. Where is that vision when we cannot have the basic amenities. They have made the rich more rich and the poor more poor. Our Middle class has become a strugling class.

Prime Minister Narsimha Rao and Atal Bihari Vajpyee wanted to do something for the country but they were not given a second term.

We will always remain like this.Corruption has gone in our blood. We are not interested where our country is heading to. We are only interested in filling our own pockets. If someone wants to do something for the country is considered a fool.

We should call back the British and tell them we are misfit for Independence.

That is it. We have to live like this.

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Jyothi

Aug 20, 2010

Mr Ajit has put it very truthfully. Its indeed a thought every one should be concerned about. I feel every Indian should realize this, so that our country can move still developing nation to a nation who is dependable.

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Om Prakash Sharma

Aug 20, 2010

The argumentative Indian as I may be called but we do nothing.When Elections approach we are guided not by argument but Bhai Bhatija, caste and other consideration.Poor Khera had to bite the dust in the most educated place in Delhi.I will be happy if some one gives a road map and follow it to his life's end. We are happy when FII's put their money in the market but never realise that this same money belongs to us Indians which is in the control limited few of our own corrupt politicins. Bofors,Maya,Sukh Rams's, Mulayam Lalu,raining notes from helicopter.Unfortunate? Isn't it?
Thanks

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Dipak Kumar Basu

Aug 20, 2010

Brilliant & "The Honest Truth", indeed, to say the least. It's an independence for the corrupt politicians & hordes of middlemen who thrive on & usurp the wealth created by the vast masses of people through their toiling hard,sweat & blood but left in the lurch in abysmal darkness - without food,shelter,education, healthcare, i.e., all the bare necessities to sustain. Pls keep the campaign on. Thanks & regards - Dipak

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sachin kundu

Aug 20, 2010

Ajit you are so right. However lets stop blaming the government for India's ills. We are the people and we are the government. If we let our country run by goons then all we can expect is underworld !

The problem is while all of us realize whats wrong and what *should* be done, we dont want to actually do it. And by actually doing it I mean going and contesting elections and changing the policies. That is the only way.

Writing blogs and articles wont do anymore.

Please consider joining Freedom Team of India which is committed to find 1500 able liberal leaders (like you) who are willing to contest elections and actually *do* something

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Sunil Savara

Aug 20, 2010

Hey Ajit, Very well said. I could not have expressed it better than this. So true. We are all concerned deeply about our rights, and forget that they are but privileges, and completely disconnect ourselves from individual responsibility.

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