IPL--The most explicit exercise in consumerism in India

The yearly celebration of cricket in India is finally over, but IPL continues to be in headlines courtesy those disgruntled politicians and ex-cricketers, who weren't able to profit from this cash-spinning extravaganza.

But these people, along with the media have failed to recognise the true nature of IPL. It was never about cricket. Had it been, then they could have as easily changed the name of the Ranji trophy and be done with. It is about the rise of Capitalism in India. While the early intentions of Lalit Modi and co. might have been towards betterment of cricket and domestic ranji players, they were quick and smart to realise that, had IPL been promoted on the lines of the Ranji trophy it would never have worked. The support and ownership of Bollywood as well as corporates lended not only the much-needed glamour, but a large infinite market to the advertisers, not to mention huge money.

Unlike many of my friends, when I watch an IPL match, I do not care who is playing and who is winning. There is no point in spoiling my day over something that at the end of the day is still domestic cricket. I instead see giant hoardings and an MRF airship floating over the stadium. I see how every decision of the third umpire is preceded and succeeded by the Kingfisher ad. I notice how, almost every match completes its full quota of 40 overs even if initially the batting team was in tatters and how the bowler seems to wait for the ad on the scoreboard to end before bowling the fourth bowl of every over. I can cite many more such instances.

In a nutshell, IPL is about the rise of consumerism in India. It tells you that there is such a large domestic market out there that Pepsi, Coca-cola, Sprite and Maaza, all can sponsor the same match and get more eyeballs and publicity than all of Ekta Kapur's soaps combined.

Governments around the world including India, took various measures to increase domestic demand in order to sustain growth in view of depreciating global demand during the recession; If IPL is fueling domestic demand, thus helping our economy expand, then why cry over morality, as was witnessed in the Indian parliament which is convened by ancient(both in age and their outlook) ministers who have redefined morality and decency in their political lives. Needless to say, almost all parties and senior leaders were in favour of scrapping IPL on the grounds of morality and explicity, and sacking Lalit Modi for causing financial irregularities. Wherever huge money is involved, irregularities are bound to happen, and sometimes, such irregularities even make for good business sense; and the kind of financial irregularities our leaders have shown in whatever they do over the past 60 years, they do not qualify to comment on the IPL or Modi.

So, my message to our leaders and the media would be--By all means, sack Modi for whatever rigging he has done, but recognise his invaluable contribution to the rise of Consumerism in our country and don't even in your wildest dreams, think of scrapping or modifying IPL for the sake of morality.

Where Capitalism wins...Part-III

The Concept of Horizontal development:

Highly industrialised and urbanised states like Maharashtra and Gujarat do not get sufficient funds from the centre because of the stupid (at least I think so) ideology of the UPA --that of horizontal development (If some region or some set of demographics are somehow benefitting more, from the existing policies or by virtue of their skill or profession, or availability of resources, then no more resources need be allocated for their further development, and the money meant for these affluent regions be diverted to the unprivileged regions, whose standard of living has been stagnant, be it due to lack of skills among the workforce, poor policies or poor implemetation, non-availability of resources, etc. Mostly, such a policy is backed by stating the chances of social unrest in the poor sections due to lack of resources).

So they siphon off the money from higher GDP and well developed states like Gujarat and Maharashtra, and fund the inefficient states like U.P., orissa, etc. In essence, we are being punished both for the inefficiency of the bimaru states and being a well developed state. Such problems do not arise in a capitalist society, where the development of the developed is not sacrificed for the needs of the under-developed. As Capitalism provides equal development opportunities to all, it comes down to the regional governments of the undeveloped states to be more efficient, and the industry in that region to be more competitive. Instead, the government should find ways to better frame and implement its policies. It will be better to plug the holes before pumping huge amounts of cash down the drain.

Where Capitalism wins...Part-II

Disinvestment/Privatisation:

For all kinds of development that a government undertakes, money comes out to be the main motive force. Now, how do they get this money? They may of course increase the taxes, or lower subsidies, both of which cannot be implemented in a major way because of round-the-year elections in our country for fear of facing the public's ire. The government has some Public Sector undertakings, whose revenues and dividends can partly fuel the country's development needs. But the performance of PSUs is often found to be less than satisfactory than their private sector counterparts. So, as we enter a more globalised world with our age-old static institutions, who have never been competitive due to support from government, we end up loosing precious business to the more efficient private players of other countries. For example, in the private sector, bankruptcy is taken seriously. In contrast, public sector managers tend to be relatively relaxed about the prospect. Drastic adjustments do not take place, as the managers know that there is no real danger of extinction. The answer to these problems is Privatisation, where government gives up the majority stake to a private enterprise. This is a win-win situation for both the parties involved as it provides the government with huge funds, that may be used to build critical infrastructure ( in India's case) for accelerating growth while enhancing the performance of the formar PSU. The best example is of Maruti whose privatisation brought more than 2000 crores to the government kitty while visibly improving its performance after privatisation. Privatisation, however, cannot be implemented everywhere. There is afterall a chance of greed coming over national interest. So, the best course is Disinvestment, where the government sells some equity to private stakeholders, while retaining the majority share, to maintain its hold over the industries that are critical for the country.

To give you a better idea, while the sale of 25% stake in Maruti fetched the government 2000 crores back then, a miniscule disinvestment of 5% in NTPC (from 89.5% to 84.5%) will fetch a handsome 8100 crores, and there is scope for at least 10-15% more divestment!

Though it was claimed to be a victim of coalition politics in the UPA's previous term, there is no such compulsion now, with Left no longer a stakeholder in the government. Still, the process of disinvestment has been slow and dismal, compared to the time of NDA 10 years ago, when there was a separate disinvestment ministry for this purpose, which more than anything else shows the difference in econmic policies of the BJP and Congress.

Where Capitalism wins...Part-I

The western world (which by extension refers to the whole world) classifies politics as left and right (curiously based on the sitting tendencies of certain leaders with communist beliefs to the left of the French president). Of course, there are sub-divisions like center-left, far-left, center-right, far-right, etc.

The politics on the left of the spectrum generally opposes the forces of globalisation, capitalism, and root for public and government control over most or critical installations in the country. They hope for equitable and horizontal development of the society.

The politics on the right generally, favours limited state control, and greater liberalization as regards the businesses in the country. They instead of going for horizontal development believe in the trickle-down effect which basically means, that even if the rich do get richer, the benefits of any sort of development will eventually trickle down to the poorest sections of the society.

By now, you must have understood that both the systems have there own advantages and disadvantages. While, under socialism or communism the rich and the middle class is made to suffer or for want of a more polite description made to shoulder the burden of the predominantly rural and pro-poor reforms, a right wing political party's ideology though favouring equal development opportunities to all, has mostly been found to be negligent towards the poor in the society.

So, logically, India, being a mixed economy must be the best and most balanced case for development with the best of both worlds approach. Alas, we have a tendency to screw up even the best scenarios.

For the past 6 years we have had a center-left government at the center.

It is an irony that the country that is most set to gain from globalisation is having a center-left government at the center. Now, in the next few articles, I will share a few examples that I can think of where right wing politics would have made a better case for both governance and development.