What to do with your money right now?

If you are just retired and with plenty of cash, retirement benefits, naturally you will have a dilemma what do with the money safely with maximum returns, liquidity and with minimum income tax liability. While equities and mutual funds seems to get you good returns, never go by television recommendations unless you have in depth knowledge of what you are set up to do.

• Never lose money. Focus on capital preservation strategies.
• Remember, risk exists every where. 
• Spread your money across asset classes; debts, equities, mutual funds, real estate and gold. 
• Retain certain amount of cash both at home and in bank to manage unforeseen situations.
• Make sure to have enough life, accident and health insurance cover for you & family.
• Stay away from hyped markets. That would be the right time to exit.
• Avoid cryptocurrencies unless you are tech savvy, prepared to gamble and lose.
• Don't lend money to friends & relatives. You may end up losing money and also relationships.

INSURANCE

• Insurance is not investment. It is the price you pay for some kind of protection of your family against contingencies of unforeseen events like death / accidental death / hospitalisation shocks. 
• Do take appropriate life, personal accident and mediclaim policies for self and family.
• Don't buy equity-linked insurance plans (ULIPs). Your money goes to the agent and the insurer and not into your investments. They are losing propositions.
• Buy either term policies (these are the cheapest) or buy money-back schemes, which are also cheap but you get your money back. Read the fine print carefully rather than trust an agent's verbal assurances.

80C INVESTMENTS

• Investments in PPF, NSCs, 5 year Bank deposits, NPS etc. may save you on income tax liabilities, But be aware of 5+ year lock in periods.

EQUITIES

• The last two years equities have seen terrific returns from the stock market. Is the economy booming? No, but a lot of investors hope that it will start growing faster. 
• The World Bank and other institutions forecast that growth should accelerate in 2018-19. Many savvy investors have already entered the stock market on that expectation. 
• As more money has come into the market, it has boosted share prices and created a positive feedback loop where investors have pumped even more money into stocks.
• Despite forecasts, markets could go in either direction.
• Unless you are an active watchful person, on daily basis, with propensity to exit as per strategy, risks are high.
• Index funds have shown persistent growth over years with lower risks. Invest in less risky index funds rather than in risky equities.
• Equities may not get you periodical returns but in long term they are sure get you impressive gains.
• Good to be a equities trader rather than and equities investor.
• Those who have time and inclination to do their own research may invest directly in stocks or via equity mutual funds. The second route is fire-and-forget. Both methods can fetch great returns. Both methods also carry the risk of capital loss.
• May be it is good to stick to mutual funds and commit to systematic investment plans (SIPs) for three years, or longer. These are likely to fetch excellent returns.
• The economy may recover. But uncertainty exists.
• Series of assembly elections and a general election scheduled in the next 15 months. Political uncertainty might cloud short-term returns. What happens if there are apprehensions that the Narendra Modi government will not return?

DEBTS

• Debt comes in many shapes and sizes. Bank fixed deposits are the default option. You can also buy mutual funds dealing in different types of debt. In addition, you can buy corporate debentures, or subscribe to corporate fixed deposits.
• Interest rates rise when inflation rises. If inflation rises, the value of money erodes faster. If interest rates rise, any portfolio of previous debt instruments loses value because that same money invested now could be earning more interest.
• Bank deposits are safest, highly liquid but with low returns. The new FRDI Bill highlights the fact that bank deposits are not guaranteed beyond the limit of Rs 1 lakh. That limit was set in 1993. The limit might get raised to Rs.5 lakhs, prior to the passing of Act. Be informed of this.
• Avoid PSU banks with huge NPA's. Also avoid private banks with low equity, lower reserves and higher NPAs. Any government would be reluctant to take this step, fearing a political backlash. Since many PSU banks are struggling to cope with bad debts bail-ins are now neither impossible, nor illegal.
• Mutual funds exploit changes in interest rates. Safety varies. Mutual funds that focus on corporate debt give much higher returns but take larger risks. It's important to understand that you can lose capital in a debt fund. So understand safety, risks and returns before investing.

REAL ESTATE

• Real estate is entirely local market. The investment is illiquid. Selling may take several months. But returns are impressive. 
• This segment has huge percentage of 'black money' intertwined with 'white money'. 60:40 is the default ratio. Even 80:20 is not uncommon. 
• Booms and busts are cyclical and occur side by side too.
• Sometime legal complications might get your investment locked for several years.
• Apart from politicians, corrupt bureaucrats and unethical businessmen, you may get entangled with mafia and local goons.
• So invest only in legally clear properties. Obtain the help of known advocates and chartered accountants. Remember brokers are not your friends.
• Stay away from hypes.

GOLD

• Gold and precious metals are the age-old hedge against inflation and uncertainty.
• But gold yields no interest and capital appreciation is uncertain.
• Making charges for jewellery add considerably to cost. It's still worth investing as security. 

Neither a borrower nor a lender be ... William Shakespeare

Read the source article

BJP wins Gujarat & HP without shine & bragging rights

 

  

• BJP winning (1) Gujarat six times in a row and (2) winning Himachal Pradesh, ousting Congress, with a 2/3 majority is by no means a small achievement for Modi but what is lacking is its shine and bragging rights.
• With 49.1% of the vote, the BJP lost 10 percentage points from its 2014 Lok Sabha tally.
• NOTA grabbed over 5.5 lakh votes, or just under 2% of the votes polled.
• Gujarat voters have handed the BJP its sixth straight victory, but tempered the win by reducing its majority to 99 – its lowest tally since 1995.
• The ruling BJP won 36 of the total 40 seats spread in six major cities and that saved the day for the BJP in the tight contest between PM Modi and Congress president Rahul Gandhi.
• CM Vijay Rupani and DyCM Nitin Patel won their seats while five serving Ministers and Assembly Speaker Ramanlal Vora were defeated.
• The PM Modi’s 20-minute speech reflected his worries and the party’s vulnerabilities despite the victories.
• Though BJP has won despite the anti-incumbency factor, the State polls turned into a photo finish unlike the landslide and much below the BJP’s target of winning 150 seats. Saurashtra, the BJP’s stronghold since 1995, dealt the party a big blow, as the Congress won 30 out of 54 seats in the region.
• In Saurashtra's 11 districts, the BJP got nearly wiped out in 5 districts.
• Most of Modi's speeches at rallies focussed on divisive themes. Mandir-Masjid, Mughals, Pakistan, Ahmed Patel, Salman Nizami, etc., he practised classic dog-whistle politics that might have stoked passions among some sections of the electorate.
• Whatever the BJP leaders may say, the victory by an extremely slim majority and well short of its aim of 150+ seats is a setback.
• With the kind of spirited fight provided by Congress, BJP's proclaimed goal of a “Congress-mukth Bharat” suffers severe set back.
• In Himachal Pradesh, despite the big win, the BJP faced the ignominy of seeing its chief ministerial candidate, Prem Kumar Dhumal, lose to his Congress rival.
• BJP may be tempted to believe that neither demonetisation nor the flawed roll-out of the GST regime has dented its support among traders and the middle class. But the heart-stopper in Gujarat has given enough reason for it to rethink, do a reality check and reconnect with the remoter parts of India.

Notwithstanding the fact that BJP won Gujarat elections 99/80 defeating Congress, the truth is that Modi has addressed 34 rallies & 97 road shows campaigned like a CM not as a PM, never mentioning any of his development schemes but relied entirely on divisive & religious polarisation, Pakistan, Mughals, Muslims, Mandir-Masjid, abusing Congress leaders and arousing passions etc. Modi did everything like a street politician to win elections forgetting that he is holding office of PM and is oath bound to uphold its dignity and sweated like never before. On other hand Rahul Gandhi, in the company of 3 young turks, was at ease engaging people questioning ruling party of its failures, visiting temples, raising concerns of agrarian distress, unemployment, failed demonetisation and GST etc. While Modi was assisted by his entire central cabinet & several other BJP leaders from other states Rahul Gandhi was virtually alone. Modi put Gujarat above nation by postponing parliament's winter session and condensing its duration so that he could campaign more in Gujarat. Modi subverted EC by influencing it in delaying announcing poll schedule to enable his announcing sops to Gujarat. The kind of money spent for BJP's campaigning and liquor flowing in this dry state has dented his claim as crusader against corruption and black money. Modi's spectacular show in riding the sea plane (specially flown from Karachi for this show) a day before campaign ended is in violation of his own security protocol. Modi’s penchant for style and no substance has a chilling similarity with Mussolini’s Fascist Italy with less concerns for efficient governing of people in solving their economic problems but focused more on the spectacle of power, on the visual and impressive display of symbols, myths and rituals. With BJP winning 99/80 against Congress Modi diminished himself while Rahul Gandhi stood taller posing as a challenger for 2019 general election while his dream of  “Congress-mukth Bharat” stands buried. Like any other programmable computers, tampering EVMs is neither easy nor very difficult and its alleged tampering by BJP will never be known. The talk of the town is that many Modi's cabinet colleagues silently wished defeat of BJP in Gujarat so that he starts learning to walk on the ground. In order to preserve our democracy it is necessary to have a narrow & rigid election campaigning code and also prohibit constitutional office bearers taking up any assignment for a period of two years after retirement.

Joblessness: Modi's Achilles' heel of 2019 elections

• In 2013 election campaigning, Modi PM candidate of the BJP, at a rally in Agra thundered "If the BJP comes to power, it will provide one crore jobs every year" which is now haunting him.
• In May 2017, a Labour Bureau quarterly report noted that a mere 230,000 jobs were created in eight key sectors from Apr-Dec 2016, a far cry from Modi's 2013 promise. This, when over a million aspirants enter the Indian job market every month. 
• The GDP growth slipped to 5.7% in the Apr-Jun quarter, the lowest in three years, with manufacturing growing at a five-year low of 1.2%, from 10.7% a year ago.
• CMIE estimates that about 1.5 million jobs were lost during January-April 2017, the first quarter after the Nov 2016 demonetisation exercise. Worse, India is set to see a further 30-40% reduction of jobs in manufacturing compared with last year.
• With a general election in less than two years, the dearth of jobs could prove the Achilles' heel of the Modi government, rein in the high prices of essential goods and rectify anomalies in the GST. 
• RBI, in its monetary policy statement on Oct 4, reiterated the need for recapitalising banks.
• Currently 30,000 new youngsters are joining the job market every day, yet the government is creating only 500 jobs a day - Rahul Gandhi said, even as he admitted that the UPA government too faced the same challenge.
• India could have been sailing smoothly at 10% plus growth, but for the spate of disruptions, including demonetisation, GST, RERA and the new bankruptcy norms. Individually they may carry a broad range of benefits, together they have inflicted collateral damage much more than was anticipated.
• The real estate sector, which creates 1.5 million jobs, has been the worst hit. Home sales fell 26% in the Delhi-NCR in the first half of 2017 as demand nosedived post-demonetisation. Unsold inventory in the Delhi-NCR stood at 180,000 units and it will take developers four-and-a-half years to sell it.
• As many as 67 textile units are reported to have shut down across the country, rendering 17,600 people jobless.
• In Nov 2016 Larsen & Toubro sacked 14,000 employees, 11.2% of its workforce, as business slowed down and digitisation left many employees redundant. IT companies, including Tech Mahindra, Wipro and Cognizant, laid off tens of thousands of staff as global business grew tougher. HDFC Bank laid off 11,000 workers over three quarters citing digitisation. Yes Bank eliminated more than 10% of its workforce citing increased redundancy, poor performance and the impact of digitisation. Hiring intentions in corporates are 20 percentage points lower year-over-year. In the informal sector lakhs of workers go jobless as construction projects dry up given the unprecedented investment slowdown.
• Manufacturing was stuttering despite the government's high-decibel 'Make in India' campaign. Acquiring land for setting up manufacturing units continued to be tough. Private investment growth has been falling since 2012. The country still ranked a low 130th in the World Bank's ease of doing business rankings.
• India's job challenge is staggering, to put it mildly. The country needs to create 16 million jobs a year for the next 15 years to take advantage of its demographic dividend.
• In key areas like textiles, India has ceded its leadership to countries such as Bangladesh and Vietnam.
• Adding to the manufacturing woes is the implementation of new digital technologies like the internet of things, cloud computing and artificial intelligence in the manufacturing process, making traditional jobs obsolete. These technologies with a squeeze in services, are affecting IT jobs too.
• Sectors like construction, real estate, power, energy, infrastructure are destroying jobs. There has been a 30% decline in job creation since 2007-08 in these sectors.
• Short-term job creation looks near-impossible since we have been focusing on the wrong kind of manufacturing for 60 years, and are now paying the price.
• Bank credit has fallen by 50 per cent. New projects are not coming up as private investment is drying up. Focus on construction will also boost the steel and cement industry. Construction and infrastructure can boost economic activity and jobs substantially, but they have been marred by time and cost overruns. As critical as supporting giant projects is extending help to small entrepreneurs. 
• Recapitalisation of banks can also help them lend to businesses, given that bad loans to the extent of Rs 7.7 lakh crore have weakened their capacity to lend.
• IT is losing its sheen as a significant job provider, with markets such as the US becoming more protectionist. Technological advances are also rendering the work force obsolete at a faster clip. 
• This could be the right time to boost consumption through lowering interest rates or giving government subsidies to certain businesses.
• Reviving the informal sector remains the biggest challenge. It's impossible to gauge the extent of joblessness given paucity of data. There is simmering discontent waiting to explode that we must prevent. We must act now.
• The government has also increased budgetary allocations for anti-poverty programmes and rural employment generation schemes. The highest ever allocation under the MGNREGA was made during 2017-18. About 51.2 million households were provided employment during 2016-17.
• The larger debate continues to be over what India should focus on: manufacturing or services. Growth in the recent period has been driven by services, which in itself was owing to substantial inflows of foreign finance. India needs rapid manufacturing growth fueled by both export growth and expansion of the domestic market. 
• Today's joblessness is similar to that of late 1960's which prompted PM Indira Gandhi to amend Apprenticeship Act in 1973 to include training of graduate and diploma engineers as "Graduate" & "Technician" Apprentices and to mitigate their problem.
• Jobs will remain a thorn in this government's side which appears unsolvable and will have telling effect in 2019 elections. 

Good or bad aside, during UPA regime GDP growth benefited all, despite corruption and scams except 2008 global recession and 2013 economic dip. Modi riding the wave of anti incumbency and joblessness became PM in 2014 and instantly forgot his promises and commitments. He focused on foreign jaunts and blaming predecessor and did nothing for next two years. The advantage of low oil prices since 2013 was squandered away. Without even discussing with economic experts, he ventured on quack advised demonetisation and mangled GST roll out without adequate preparation and keeping away keys sectors out of GST and economy plunged into distress and millions jobs lost. Banks recapitalisation was given a miss and today banks do just retail banking only. In 2017 almost all economic parameters are worse than in 2013 and nothing much is likely to happen in next two years prior to 2019 elections. Modi & BJP are certain to pay price for their arrogance and incompetency. 

UP makes mockery of farm loan waiver

• In the run up to the assembly polls, during Mar 2017, that Prime Minister Narendra Modi promised that if BJP is voted to power in the state, loan waivers will be the top priority at the first cabinet meet. The promise turned out to be effective and got votes for the BJP. However, to avoid making it seem like they had failed the voters, the Adityanath-led government delayed the first cabinet meeting to put off any decision on loan waivers. Later, the Centre refused to offer money, which forced the government to use state's own resources.
• In its first cabinet meeting in April 2017, the UP state government announced that under the farm loan waiver scheme, crop loans up to Rs 1 lakh will be waived off for small and marginal farmers. However, as cabinet ministers ceremoniously distributed loan waiver certificates to farmers across districts, it turns out that many of the beneficiary farmers have received waivers of amounts as petty as Re 1 or Rs 1.50 for over 17,260 farmers.
• One of the more predictable outcomes of the massive farm loan waivers is, while they are a solution to relieving rural distress in the short-term, they also result in a reduction of capital expenditure on agriculture and allied activities, rural development, irrigation and flood control by an average nearly 30%. Cut in capital expenditure in productive areas likely to act as a drag on growth for such states.
• UP’s expensive farm loan waiver has forced the Adityanath-ruled state to cut back on revenue and capital expenditure in key areas like energy, transportation, social welfare and nutrition.

Modi never walks the talk. He is worse than Congress in this aspect. During UP elections, his announcement of farm loan waiver made all the UP farmers believe that everyone will get farm loan waiver. After winning, centre backed out of its commitment and state was to shoulder the burden the loan waiver expenses. Citing resources constraint the farm loan waiver was limited to Rs. 1 lakh for small and marginalized farmers only and even that turned out to be mockery and farce. As usual Modi never touches this embarrassing item again in his life. Rules must be modified to instantly dislodge PM, CMs & Ministers from their positions and debarring them from public positions for next five years for failing on publicly made promises.

Democracy and its Perils

• Democracy is a political system which combines the elements of fairness, legitimacy and effectiveness. It is the least worst system. 
• Democracy is imperfect and, when misapplied or incorrectly interpreted, can be saddled with flaws and weaknesses. 
• Democracy is the most expensive & inefficient form of governance.
• A democracy is not a democracy unless it has independent and strong institutions that help facilitate good governance and right thinking citizens demanding accountability and transparency.
• Proper democracy is far more than a perpetual ballot process. It must include deliberation, mature independent institutions and checks and balances. It may include educated citizens, strong civil society and strong laws.
• Freedom is an essential part of democracy. Freedom is essential for both the ruled and the ruler.
• Unfettered freedom brings with it its own hazards that would undermine the institutions that help sustain democracy.
• The victim of democracy is the politics itself. Politics in a democratic set up tends to be looked upon with contempt by the people. It is much maligned and abused field in all the democracies.
• Politicians once elected to power become the custodians and abusers of power.
• Bad politics leads to corruption. As the people responsible for corruption are ‘enabled’ to loot the exchequer either by the loopholes in the laws or indifferent ‘people’ who form the very basis of democracy.
• Corruption has reached gargantuan proportions, because of the indifferent attitude of the people and enabling environment provided by democracy for the corrupt to practice their art. 
• Democracy aides both the individual and the ‘corrupt’ authority. Democracy with weak institutions gives them free hand to run the government, they tend to err, and err with impunity.
• Criminalization of politics is the biggest peril of democracy. With it comes misuse of position and authority. It inevitably leads to corruption.
• Corruption directly brings underdevelopment and spawns poverty. In India poverty is the major benefactor for the politicians. As long as poverty is sustained, they can amass wealth – always unaccounted.
• Democracy promotes capitalism which in turn results in uneven wealth distribution. Rich becomes much richer while poor remain poorer.
• Risk of capitalism is usually socialized while profits gets privatized.
• Democracy in itself is not a threat, but any weak link within it is bound to weaken the whole structure.
• Democracy has become synonymous with elections and is reduced to the process of elections.
• In democracy poor people vote, and the elected become rich at the cost of the poor. It’s a government of the rich, for the poor to sustain the poverty. This sounds cynical, but hard facts vindicate the statement. If 70% of India’s population still earns less than Rs 50 per day, even after 70 years of independence, should we compliment ourselves or introspect?
• Development has suffered more in democracy than in other forms of governments. Though it is fashionable to say that democracy is better than despotism despite lack of development, does it do justice to the vast millions who go to sleep hungry?
• Within democracy, we need a change of mindset both of the people and politicians in their attitude towards development. We are witnessing the loot of our resources by the powerful few who are covertly supported by the government machinery. Every penny that’s put to improve the lot of this country is unaccounted for. The crux is lack of accountability.
• Education of the masses and strong institutions is a solution to most problems in India.
• Institutions which are not pestered and interfered by the ruling classes perform better. The fear that these institutions if given complete autonomy would grow as a threat is unfounded. The Supreme Court of India and Election commission of India are governed by bureaucrats, not by the elected politicians. These institutions function well within the scope of our constitution.
• Our military has gained reputation for being fair to its people and the constitution. Where there is no interference by the politics, the institutions serve well. For a democracy to thrive and bring development to the masses, we need independent institutions to act as check and balances on the government.
• We need universities which are not at the mercy of government; we need public service commissions not interfered in their functioning by the government; we need a strong Lokpal to punish the corrupt; strong local governments to bring development at the bottom; independent CBI and a police force which is pro-people; the list goes on.
• These changes are not difficult to bring on. It is the will which is missing, lest it affects the power of few to amass the wealth. Perils of democracy are the result of loopholes within it. To plug them, we need to fight. Of course, non-violently.
• A blanket endorsement of it as a convenient panacea will do more harm than good.
• There are very few nations on this Earth, which openly reject the notion of democracy. Most countries espouse it, or at least offer it lip service.
• Myth #1: The people can do no wrong.  The legitimacy of majority rule with no reservations or caveats raises the issue of sub-units within the voters viz territorial, cultural, ethnic or religious. What happens if the people change their minds? Democracy cannot be just if it is not just over time. Does a coalition automatically legitimize the action of individuals or groups or nations without regard to higher principles of morality or ethics? The doctrine of popular infallibility can be kept as a useful reference point but must not be abused or overextended.
• Myth # 2: Direct  democracy is always better than representative democracy. Given the volatility of public opinion, the complexity of social psychology and the possibility of inter generational conflicts, the representative democracy is often superior to direct democracy, with the representatives acting as buffer. Mistakes can then be attributed to representatives and not to the people. The conventional assumption is that the will of the people should always trump that of the elites. The principal arguments against leaving too many decisions to the direct appreciation of the masses can be summarized as follows: (1) Uninformed or insufficiently informed electorate (2) Influence of money and media (3) People changing their mind (4) Contradictory Referenda (5) Deleterious effect on public policy.
• Myth #3: Democracy trumps all other social goals. The backlash against Dumb Democracy is the realization that democratization, although a valid goal, is not the only desirable one that a Society can legitimately aspire to. The following compete for priority with democracy. (1) Peace (2) Justice (3) Liberty & Freedom (4) Security (5) Good governance (6) Escape from extreme poverty (7) Public Vs Private goods (8) Good health (9) Traditional values (10) Climate change and sustainable development. 
• Myth #4: Democratic countries will never go to war against each other. There is a frequent assumption that once a country becomes democratic it will renounce violence, avoid going to war especially against other democracies, and try to resolve outstanding problems by peaceful means. Experience shows that the relationship between democracy and war is actually very complex and far from straightforward. 
• Myth #5: National democracy automatically leads to global democracy. Will a world composed of democratic nation-states automatically mean that it will also be democratic? This question is as complex and there are no simple answers. The UN Security Council, with coercive powers, is composed of five permanent members with veto powers who appointed themselves to that position. The other non-permanent members are elected by the UN General Assembly, but do not have veto power. The elected President of United States has real authority over the whole world by virtue of the overwhelming military power, which it has used in Iraq and threatens to do so elsewhere. There is a serious democratic deficit where 2% of the world’s voting population manages to have a determining influence on the entire world.
• There is no formula of global democracy and every formula suffer from inefficiencies and conflict of goals. The attempted simple transition from national to global democracy without a lot of preparation and adaptation is therefore destined to fail unless treated with a more sophisticated analysis.
• Other than democracy, there are no other known political alternatives which will work in the long run.  There is no permanent security in tyrants and the checks and balances of democracy make it the only sustainable political system, which can claim both long-term efficiency and legitimacy. Democracy must prevail because of mounting global interdependence requiring team responses and collective decision-making. A leader has to motivate his troops and keep their confidence. No single individual holds absolute power anymore, and everyone has to report to some group or a parliament, all leaders are accountable to some committee of peers, which makes democracy sustainable, indispensable and inevitable. 
• The modalities of this accountability have to be modulated and perfected.
• The construction of a democratic state must be gradual and well planned. It can rarely be imposed by non-democratic means. Democracy by force of arms is self-defeating. 

 In framing a government which is to be administered by men over men, the great 
difficulty lies in this: you must first enable the government to control the governed; 
and in the next place oblige it to control itself ... James Madison

The Perils of Dumb Democracy


Ambedkar described constitution as a fundamental document stated that the purpose of a constitution is not merely to create the organs of the state but to limit their authority because if no limitation was imposed upon the authority of the organs, there will be complete tyranny and complete oppression. The legislature may be free to frame any law; the executive may be free to take any decision, and the Supreme Court may be free to give any interpretation of the law. It would result in utter chaos. Constitutional morality is not a natural sentiment. It has to be cultivated. We must realise that our people have yet to learn it. Democracy in India is only a top-dressing on an Indian soil which is essentially undemocratic. Demonetisation has negated the fundamental and constitutional rights of Indians. By forcing every Indian, and not just the black marketers and counterfeiters, to stand in queues to withdraw hard earned money, our elected government has insulted all. Citizens have been temporarily deprived of property by a single fiat, even though the constitution says this can only be done with the authority of law. Countless have died, been rendered jobless, hungry and homeless. Is this a democratic act? RBI has been reduced to cipher. Fiscal policy has become political and the finance ministry redundant. The parliament and the cabinet have been turned into a mere formality. Judiciary appears seriously weakened. It is not easy for the victims of police and investigative agencies to get any relief against wrongful detentions and prosecutions. But it is the concerted attack on institution after institution by the Modi government that raises serious concerns. Bhakti in religion may be a road to the salvation of the soul. But in politics, bhakti or hero-worship is a sure road to degradation and to eventual dictatorship. India has moved away from constitutional democracy to populist democracy. Ambedkar is losing. Modi is winning.

Hamid Ansari, Vice President's speech at NLSIU convocation

Hamid Ansari, Vice-President's speech at the 25th annual convocation of the
National Law School of India University in Bengaluru on August 7, 2017

In his final address as vice-president, Hamid Ansari spoke at the 25th annual convocation of the National Law School of India University in Bengaluru. In his speech, he said the challenge was to reiterate and rejuvenate secularism's basic principles, including freedom of religion and tolerance. The function was presided over by Chief Justice of India, Jagdish Singh Khehar. 

Here is the full text of the speech Ansari gave on 6 August, 2017:

It is a privilege to be invited to this most prestigious of law schools in the country, more so for someone not formally lettered in the discipline of law. I thank the Director and the faculty for this honour.

The nebulous universe of law and legal procedures is well known to this audience and there is precariously little that I can say of relevance to them. And, for reasons of prudence and much else, I dare not repeat here either Mr. Bumble’s remark that ‘the law is an ass’ or the suggestion of a Shakespearean character who outrageously proposed in Henry VI to ‘kill all lawyers.’ Instead, my effort today would be to explore the practical implications that some constitutional principles, legal dicta and judicial pronouncements have for the lives of citizens.

An interest in political philosophy has been a lifelong pursuit. I recall John Locke’s dictum that ‘wherever law ends, tyranny begins.’ Also in my mind is John Rawl’s assertion that ‘justice is the first virtue of social institutions’ and that ‘in a just society the liberties of equal citizenship are taken as settled and the rights secured by justice and are not subject to political bargaining or to the calculus of social interest.’ To Rawls, the first task of political philosophy is its practical role to see, whether despite appearances on deeply disputed questions, some philosophical or moral grounds can be located to further social cooperation on a footing of mutual respect among citizens.

The Constitution of India and its Preamble is an embodiment of the ideals and principles that I hold dear.

The People of India gave themselves a Republic that is Sovereign, Socialist, Secular and Democratic and a constitutional system with its focus on Justice, Liberty, Equality and Fraternity. These have been embodied in a set of institutions and laws, conventions and practices.

Our founding fathers took cognizance of an existential reality. Ours is a plural society and a culture imbued with considerable doses of syncretism. Our population of 1.3 billion comprises of over 4,635 communities, 78 percent of whom are not only linguistic and cultural but social categories. Religious minorities constitute 19.4 percent of the total. The human diversities are both hierarchical and spatial.

It is this plurality that the Constitution endowed with a democratic polity and a secular state structure. Pluralism as a moral value seeks to ‘transpose social plurality to the level of politics, and to suggest arrangements which articulate plurality with a single political order in which all duly constituted groups and all individuals are actors on an equal footing, reflected in the uniformity of legal capacity. Pluralism in this modern sense presupposes citizenship.’

Citizenship as the basic unit is conceptualized as “national-civic rather than national-ethnic” ‘even as national identity remained a rather fragile construct, a complex and increasingly fraught ‘national-civic-plural-ethnic’ combinations.’ In the same vein, Indianness came to be defined not as a singular or exhaustive identity but as embodying the idea of layered Indianness, an accretion of identities.

'Modern democracy offers the prospect of the most inclusive politics of human history. By the same logic, there is a thrust for exclusion that is a byproduct of the need for cohesion in democratic societies; hence the resultant need for dealing with exclusion ‘creatively’ through sharing of identity space by ‘negotiating a commonly acceptable political identity between the different personal and group identities which want to/have to live in the polity.’ Democracy ‘has to be judged not just by the institutions that formally exist but by the extent to which different voices from diverse sections of the people can actually be heard.’ Its ‘raison d’etre is the recognition of the other.’

Secularism as a concept and as a political instrumentality has been debated extensively. A definitive pronouncement pertaining to it for purposes of statecraft in India was made by the Supreme Court in the Bommai case and bears reiteration:

‘Secularism has both positive and negative contents. The Constitution struck a balance between temporal parts confining it to the person professing a particular religious faith or belief and allows him to practice profess and propagate his religion, subject to public order, morality and health. The positive part of secularism has been entrusted to the State to regulate by law or by an executive order. The State is prohibited to patronise any particular religion as State religion and is enjoined to observe neutrality. The State strikes a balance to ensue an atmosphere of full faith and confidence among its people to realise full growth of personality and to make him a rational being on secular lines, to improve individual excellence, regional growth, progress and national integrity… Religious tolerance and fraternity are basic features and postulates of the Constitution as a scheme for national integration and sectional or religious unity. Programmes or principles evolved by political parties based on religion amount to recognizing religion as a part of the political governance which the Constitution expressly prohibits. It violates the basic features of the Constitution. Positive secularism negates such a policy and any action in furtherance thereof would be violative of the basic features of the Constitution.’

Despite its clarity, various attempts, judicial and political, have been made to dilute its import and to read new meaning into it. Credible critics have opined that the December 11, 1995 judgment of the Supreme Court Bench ‘are highly derogatory of the principle of secular democracy’ and that a larger Bench should reconsider them ‘and undo the great harm caused by them' This remains to be done; ‘instead, a regression of consciousness (has) set in’ and ‘the slide is now sought to be accelerated and is threatening to wipe out even the gains of the national movement summed up in sarvadharma sambhav.’

It has been observed, with much justice, that ‘the relationship between identity and inequality lies at the heart of secularism and democracy in India.’ The challenge today then is to reiterate and rejuvenate secularism’s basic principles: equality, freedom of religion and tolerance, and to emphasize that equality has to be substantive, that freedom of religion be re-infused with its collectivist dimensions, and that toleration should be reflective of the realities of Indian society and lead to acceptance.

Experience of almost seven decades sheds light on the extent of our success, and of limitations, on the actualizations of these values and objectives. The optimistic narrative is of deepening; the grim narrative of decline or crisis.

Three questions thus come to mind:

• How has the inherent plurality of our polity reflected itself in the functioning of Indian democracy?
• How has democracy contributed to the various dimensions of Indian pluralism?
• How consistent are we in adherence to secularism?

Our democratic polity is pluralist because it recognizes and endorses this plurality in (a) its federal structure, (b) linguistic and religious rights to minorities, and (c) a set of individual rights. The first has sought to contain, with varying degrees of success, regional pressures, the second has ensured space for religious and linguistic minorities, and the third protects freedom of opinion and the right to dissent.

A question is often raised about national integration. Conceptually and practically, integration is not synonymous with assimilation or homogenization. Some years back, a political scientist had amplified the nuances:

‘In the semantics of functional politics the term national integration means, and ought to mean, cohesion and not fusion, unity and not uniformity, reconciliation and not merger, accommodation and not annihilation, synthesis and not dissolution, solidarity and not regimentation of the several discrete segments of the people constituting the larger political community…Obviously, then, Integration is not a process of conversion of diversities into a uniformity but a congruence of diversities leading to a unity in which both the varieties and similarities are maintained.’

How and to what extent has this worked in the case of Indian democracy with its ground reality of exclusions arising from stratification, heterogeneity and hierarchy that often ‘operate conjointly and create intersectionality’? 

Given the pervasive inequalities and social diversities, the choice of a system committed to political inclusiveness was itself ‘a leap of faith.’ The Constitution instituted universal adult suffrage and a system of representation on the First-Past-The-Post (Westminster) model. An underlying premise was the Rule of Law that is reflective of the desire of people ‘to make power accountable, governance just, and state ethical.’

Much earlier, Gandhi ji had predicted that democracy would be safeguarded if people ‘have a keen sense of independence, self respect and their oneness and should insist upon choosing as their representatives only persons as are good and true.’ This, when read alongside Ambedkar’s apprehension that absence of equality and fraternity could bring forth ‘a life of contradictions’ if the ideal of ‘one person, one vote, one value’ was not achieved, framed the challenge posed by democracy.

Any assessment of the functioning of our democracy has to be both procedural and substantive. On procedural count the system has developed roots with regularity of elections, efficacy of the electoral machinery, an ever increasing percentage of voter participation in the electoral process and the formal functioning of legislatures thus elected. The record gives cause for much satisfaction.

The score is less emphatic on the substantive aspects. Five of these bear closer scrutiny – (a) the gap between ‘equality before the law’ and ‘equal protection of the law’, (b) representativeness of the elected representative, (c) functioning of legislatures, (d) gender and diversity imbalance and (e) secularism in practice:

• Equality before the law and equal protection of the law: ‘The effort to pursue equality has been made at two levels. At one level was the constitutional effort to change the very structure of social relations: practicing caste and untouchability was made illegal, and allowing religious considerations to influence state activity was not permitted. At the second level the effort was to bring about economic equality although in this endeavour the right to property and class inequality was not seriously curbed…Thus the reference to economic equality in the Constitution, in the courts or from political platforms remained basically rhetorical.’ 
• Representativeness of the elected representative: In the 2014 general election, 61% of the elected MPs obtained less than 50% of the votes polled. This can be attributed in some measure to the First-Past-the-Post system in a fragmented polity and multiplicity of parties and contestants. The fact nevertheless remains that representation obtained on non-majority basis does impact on the overall approach in which politics of identity prevails over common interest.
• Functioning of legislatures, accountability and responsiveness: The primary tasks of legislators are legislation, seeking accountability of the executive, articulation of grievances and discussion of matters of public concern. The three often overlap; all require sufficient time being made available. It is the latter that is now a matter of concern. The number of sittings of the Lok Sabha and the Rajya Sabha which stood at 137 and 100 respectively in 1953 declined to 49 and 52 in 2016. The paucity of time thus created results in shrinkage of space made available to each of these with resultant impact on quality and productivity and a corresponding lessening of executive’s accountability. According to one assessment some years back, ‘over 40 percent of the Bills were passed in Lok Sabha with less than one hour of debate. The situation is marginally better in the Rajya Sabha.’ Substantive debates on public policy issues are few and far in between. More recently, the efficacy of the Standing Committee mechanism has been dented by resort to tactics of evasion by critical witnesses. A study on 'Indian Parliament as an Instrument of Accountability' concluded that the institution is ‘increasingly becoming ineffective in providing surveillance of the executive branch of the government.
• The picture with regard to the functioning of the Sate Assemblies is generally much worse.
• Thus while public participation in the electoral exercise has noticeably improved, public satisfaction with the functioning of the elected bodies is breeding cynicism with the democratic process itself. It has also been argued that ‘the time has come to further commit ourselves to a deeper and more participatory and decentralized democracy - a democracy with greater congruence between people’s interests and public policy.’
• Gender and diversity imbalance: Women MPs constituted 12.15% of the total in 2014. This compares unfavourably globally as well as within SAARC and is reflective of pervasive neo-patriarchal attitudes. The Women’s Reservation Bill of 2009 was passed by the Rajya Sabha, was not taken up in Lok Sabha, and lapsed when Parliament was dissolve before the 2014 general elections. It has not been resurrected. Much the same (for other reasons of perception and prejudice) holds for Minority representation. Muslims constitute 14.23 percent of the population of India. The total strength of the two Houses of Parliament is 790; the number of Muslim MPs stood at 49 in 1980, ranged between 30 and 35 in the 1999 to 2009 period, but declined to 23 in 2014.
• An Expert Committee report to the Government some years back had urged the need for a Diversity Index to indentify ‘inequality traps’ which prevent the marginalized and work in favour of the dominant groups in society and result in unequal access to political power that in turn determines the nature and functioning of institutions and policies.
• Secularism in actual practice: Experience shows that secularism has become a site for political and legal contestation. The difficulty lies in delineating, for purposes of public policy and practice, the line that separates them from religion. For this, religion per se, and each individual religion figuring in the discourse, has to be defined in terms of its stated tenets. The ‘way of life’ argument, used in philosophical texts and some judicial pronouncements, does not help the process of identifying common principles of equity in a multi-religious society in which religious majority is not synonymous with totality of the citizen body. Since a wall of separation is not possible under Indian conditions, the challenge is to develop and implement a formula for equidistance and minimum involvement. For this purpose, principles of faith need to be segregated from contours of culture since a conflation of the two obfuscates the boundaries of both and creates space to equivocalness. Furthermore, such an argument could be availed of by other faiths in the land since all claim a cultural sphere and a historical justification for it.

In life as in law, terminological inexactitude has its implications. In electoral terms, ‘majority’ is numerical majority as reflected in a particular exercise (e.g. election), does not have permanence and is generally time-specific; the same holds for ‘minority’. Both find reflection in value judgments. In socio-political terminology (e.g. demographic data) ‘majority’ and ‘minority’ are terms indicative of settled situations. These too bring forth value judgments. The question then is whether in regard to ‘citizenship’ under our Constitution with its explicit injunctions on rights and duties, any value judgments should emerge from expressions like ‘majority’ and ‘minority’ and the associated adjectives like ‘majoritarian’ and ‘majorityism’ and ‘minoritarian’and ‘minorityism’? Record shows that these have divisive implications and detract from the Preamble’s quest for ‘Fraternity’.

Within the same ambit, but distinct from it, is the constitutional principle of equality of status and opportunity, amplified through Articles 14, 15, and 16. This equality has to be substantive rather than merely formal and has to be given shape through requisite measures of affirmative action needed in each case so that the journey on the path to development has a common starting point. This would be an effective way of giving shape to Prime Minister Narendra Modi’s policy of Sab Ka Saath Sab Ka Vikas.

It is here that the role of the judicial arm of the state comes into play and, as an acknowledged authority on the Constitution put it, ‘unless the Court strives in every possible way to assure that the Constitution, the law, applies fairly to all citizens, the Court cannot be said to have fulfilled its custodial responsibility.’

How then do we go about creating conditions and space for a more comprehensive realization of the twin objectives of pluralism and secularism and in weaving it into the fabric of a comprehensive actualization of the democratic objectives set forth in the Constitution?

The answer would seem to lie, firstly, in the negation of impediments to the accommodation of diversity institutionally and amongst citizens and, secondly, in the rejuvenation of the institutions and practices through which pluralism and secularism cease to be sites for politico-legal contestation in the functioning of Indian democracy. The two approaches are to be parallel, not sequential. Both necessitate avoidance of sophistry in discourse or induction of personal inclinations in State practice. A more diligent promotion of fraternity, and of our composite culture, in terms of Article 51A (e) and (f) is clearly required. It needs to be done in practice by leaders and followers.

A commonplace suggestion is advocacy of tolerance. Tolerance is a virtue. It is freedom from bigotry. It is also a pragmatic formula for the functioning of society without conflict between different religions, political ideologies, nationalities, ethnic groups, or other us-versus-them divisions.

Yet tolerance alone is not a strong enough foundation for building an inclusive and pluralistic society. It must be coupled with understanding and acceptance. We must, said Swami Vivekananda, ‘not only tolerate other religions, but positively embrace them, as truth is the basis of all religions.’

Acceptance goes a step beyond tolerance. Moving from tolerance to acceptance is a journey that starts within ourselves, within our own understanding and compassion for people who are different to us and from our recognition and acceptance of the ‘other’ that is the raison d’etre of democracy. The challenge is to look beyond the stereotypes and preconceptions that prevent us from accepting others. This makes continuous dialogue unavoidable. It has to become an essential national virtue to promote harmony transcending sectional diversities. The urgency of giving this a practical shape at national, state and local levels through various suggestions in the public domain is highlighted by enhanced apprehensions of insecurity amongst segments of our citizen body, particularly Dalits, Muslims and Christians.

The alternative, however unpalatable, also has to be visualized. There is evidence to suggest that we are a polity at war with itself in which the process of emotional integration has faltered and is in dire need of reinvigoration. On one plane is the question of our commitment to Rule of Law that seems to be under serious threat arising out of the noticeable decline in the efficacy of the institutions of the State, lapses into arbitrary decision-making and even ‘ochlocracy’ or mob rule, and the resultant public disillusionment; on another are questions of fragility and cohesion emanating from impulses that have shifted the political discourse from mere growth centric to vociferous demands for affirmative action and militant protest politics. ‘A culture of silence has yielded to protests’ The vocal distress in the farm sector in different States, the persistence of Naxalite insurgencies, the re-emergence of language related identity questions, seeming indifference to excesses pertaining to weaker sections of society, and the as yet unsettled claims of local nationalisms can no longer be ignored or brushed under the carpet. The political immobility in relation to Jammu and Kashmir is disconcerting. Alongside are questions about the functioning of what has been called our ‘asymmetrical federation’ and ‘the felt need for a wider, reinvigorated, perspective on the shape of the Union of India’ to overcome the crisis of ‘moral legitimacy’ in its different manifestations.

I have in the foregoing dwelt on two ‘isms’, two value systems, and the imperative need to invest them with greater commitment in word and deed so that the principles of the Constitution and the structure emanating from it are energized. Allow me now to refer to a third ‘ism’ that is foundational for the modern state, is not of recent origin, but much in vogue in an exaggerated manifestation. I refer here to Nationalism.

Scholars have dwelt on the evolution of the idea. The historical precondition of Indian identity was one element of it; so was regional and anti-colonial patriotism. By 1920s a form of pluralistic nationalism had answered the question of how to integrate within it the divergent aspirations of identities based on regional vernacular cultures and religious communities. A few years earlier, Rabindranath Tagore had expressed his views on the ‘idolatry of Nation’.

For many decades after independence, a pluralist view of nationalism and Indianness reflective of the widest possible circle of inclusiveness and a ‘salad bowl’ approach, characterized our thinking. More recently an alternate viewpoint of ‘purifying exclusivism’ has tended to intrude into and take over the political and cultural landscape. One manifestation of it is ‘an increasingly fragile national ego’ that threatens to rule out any dissent however innocent. Hyper-nationalism and the closing of the mind is also ‘a manifestation of insecurity about one’s place in the world.’

While ensuring external and domestic security is an essential duty of the state, there seems to be a trend towards sanctification of military might overlooking George Washington’s caution to his countrymen over two centuries earlier about ‘overgrown military establishments which, under any form of government, are inauspicious to liberty.’

Citizenship does imply national obligations. It necessitates adherence to and affection for the nation in all its rich diversity. This is what nationalism means, and should mean, in a global community of nations. The Israeli scholar Yael Tamir has dwelt on this at some length. Liberal nationalism, she opines, ‘requires a state of mind characterized by tolerance and respect of diversity for members of one’s own group and for others;’ hence it is ‘polycentric by definition’ and ‘celebrates the particularity of culture with the universality of human rights, the social and cultural embeddedness of individuals together with their personal autonomy.’ On the other hand, ‘the version of nationalism that places cultural commitments at its core is usually perceived as the most conservative and illiberal form of nationalism. It promotes intolerance and arrogant patriotism’.

What are, or could be, the implications of the latter for pluralism and secularism? It is evident that both would be abridged since both require for their sustenance a climate of opinion and a state practice that eschews intolerance, distances itself from extremist and illiberal nationalism, subscribes in word and deed to the Constitution and its Preamble, and ensures that citizenship irrespective of caste, creed or ideological affiliation is the sole determinant of Indianness.

In our plural secular democracy, therefore, the ‘other’ is to be none other than the ‘self’. Any derogation from it would be detrimental to its core values.

Jai Hind.

Social media greatly impacts society

Social media websites are some of the most popular haunts on the Internet. They have revolutionized the way people communicate and socialize on the web. Social media has tremendous impact on culture, business, politics, socialization with some negative effects such as cyber bullying and privacy.

• Social websites have played an important role in many elections in many countries.
• Companies are using social media to advertise their products, to enhance brand image and popularity which costs nothing.
• Social networks offer the opportunity for people to re-connect with their old friends and acquaintances, make new friends, trade ideas, share content and pictures etc. 
• Users can stay abreast of the latest global and local developments, and participate in campaigns and activities of their choice. 
• Professionals use social media to enhance their career and business prospects. 
• Students can collaborate with their peers to improve their academic proficiency and communication skills.
• Social networks is the choice for the bloggers, article writers and content creators.
• Social networking sites is to unite people for the achievement of some specific objective to bring the positive change in society.
• There are a some downsides too to social networking. 
• Many introverts and socially reclusive users place too much emphasis on virtual interaction, and ignore the real world outside. 
• If you are not careful, unscrupulous people can target you for cyber bullying and harassment on social sites. School children, young girls, and women can fall prey to online attacks which can create tension and distress. 
• Social media or network could lead to addiction. Spending countless hours on the social sites can divert the focus and attention from a particular task. It lowers the motivational level of the people, especially of the teenagers and students. 
• Many companies have blocked social networks on their office internet as addicted employees can distract themselves on such sites, instead of focusing on work. 
• Kids can be greatly affected by these social networking sites. Sometimes people share photos on social media that contains violence and sex, which can damage the behavior of kids and teenagers. 
• What you post on the Net can come back to haunt you. 
• Revealing personal information on social sites can make users vulnerable to crimes like identity theft, stalking, etc. 
• Many companies perform a background check on the internet before hiring an employee. If a prospective employee has posted something embarrassing on social media, it can drastically affect their chances of getting the job. 
• Our loved ones and friends may get to know if we post something undesirable on social networks.
• Even with the tight security settings your personal information may leak on the social sites. Downloading your videos or pictures and copying your status is an easy task.
• Social media has its above mentioned advantages and drawbacks. 
• Anther disadvantage of social media is the low control of the integrity of posted information.
• It is up to each user to use social sites wisely to enhance their professional and social life, and exercise caution to ensure they do not fall victim to online dangers.

Not disputing anything, it leans heavily in favor of the positives. Social media is greatly implicated in increased depression, feelings of isolation and loneliness, spreading of false information, creation of "echo chambers", break down of inter-personal communication skills, break down of intimate relationships and cause of broken friendships/ relationships. Social media  is a prime catalyst of social decay with unquantifiable negative impact.