Indian Foreign Policy in Convulsions

Indian Foreign Policy in Convulsions


Indian foreign policy establishment received a big tremor on July 16, 2009 with epicenter at Sharm El Sheikh. Something unprecedented happened and Indians woke up to the reality that India’s stand against terror is put on the back burners to enable Americans fight their war on terror in Afghanistan-Pakistan. 26/11 was delinked from the dialogue with Pakistan in the joint statement issued by Dr.Man Mohan Singh and Yusuf Reza Gilani. Pakistan was already celebrating the diplomatic coup. Gilani’s stock zoomed up. He managed to kick start the dialogue process and had the feather of Balochistan in his cap.

The explanations followed no end from Indian delegation in Egypt but Indian political as well as bureaucratic establishment was at a loss to understand the compulsions of a U-turn on the stand that there can be no dialogue with Pakistan till 26/11 perpetrators are punished. India had sustained the international moral and political support since 26/11 with top diplomats briefing all the key countries. The Prime Minister had reiterated the stand several times and the last was when he virtually reprimanded President Zardari in Yekaterinburg stating the mandate he had vis a vis Pakistan. What happened in a week that the mandate had lost its relevance?

It seems the Indian side expected more of Yekaterinburg to happen in Sharm El Sheikh with Gilani on 26/11 issues. But something happened and as the reports suggest a hurried statement was drafted based on dictation of Gilani. The Prime Minister Dr. Man Mohan Singh conceded on the issue of de-linking terror and dialogue in larger interest of the peace process. May be the message conveyed to Zardari was strong enough by diplomatic standards and it was now time to move on.

Yekaterinburg Effect:

Dr. Man Mohan Singh had departed from stated positions and made a major concession. Neither the MEA nor political bigwigs had any clue to what was in store. Since it was a meeting on the sidelines of NAM summit, was there any compulsion to have the joint statement issued when talks were only peripheral to find a way out of the situation? It could have just been left to foreign secretaries to carry forward the process. It is quite possible that after Yekaterinburg there was pressure on India to get on with dialogue to provide a platform for Hillary Clinton which she reiterated when in New Delhi. The stamp of US was visible like watermark on the joint statement due to timing.

Sharm El Sheikh joint statement has left an impression globally that Pakistan can attack Indian Parliament and the culprit can not be hanged, Pakistan can attack Indian consulate in Kabul and India did not retaliate, Pakistan can attack Mumbai with unprecedented & obvious involvement of ISI and India can do nothing. India stuck to diplomacy. After buying time, Pakistan has now admitted to involvement of LeT in Mumbai attack. The world too knows the obvious. However, it is a fact that nothing would come out on terror front until we talk to them and keep the pressure on. Talks should be pursued to get step by step action on dismantling terror and punishing the perpetrators. The joint statement should have been to enlist action plan of Pakistan leading to composite dialogue after milestones have been traversed. PM has made detailed statement in the parliament on the issue. Now our talks must be recalibrated by what PM said “Trust & Verify” approach. We have to regain lost ground.

History Repeats Itself:

I was reminded of the Tashkent agreement signed by Lal Bahadur Shastri under pressure from Moscow. We surrendered all the gains after reaching Lahore. Indira Gandhi signed Simla Agreement which has been broken umpteen numbers of times. Nawaz Sharif and Vajpayee signed Lahore declaration and we had Kargil. Now we have frittered away the diplomatic gains made since 26/11. What next Mr.Gilani?

Pakistan has made mockery since 26/11 changing statements every day if not by hour. We know that no agreement with India signed by highest authorities in Pakistan is likely to be honored in implementation. The trust deficit is very high and Pakistan should be made to work to establish trustworthiness to move on. The onus of bridging the deficit should have been on Pakistan. We failed in nailing down Pakistan and on the contrary reversed our position.

Avoidable Balochistan:

The PM has made clear in the parliament that no dossier has been given on Balochistan. Whatever was discussed on the issue could have ended with demand for dossier from our end like Pakistan keeps asking us proof every day on 26/11. It is public knowledge that India has stopped overseas covert operations under what is known as Gujral Doctrine. Where was need to introduce Balochistan in the joint statement? Pakistan will keep using it to their advantage trying to implicate India in fomenting trouble in Pakistan. Sharm El Sheikh joint statement will keep haunting us for long time to come just like UN Resolution on Kashmir. The PM has reiterated that India has nothing to fear and has no interest in destabilizing Pakistan. PM may be right but it will put unfair, avoidable & unnecessary pressure on us to keep defending ourselves in international fora.

Global Role, Global Pressures:

Our approaches in dealing with NSG waiver, nuclear deal, and in recent times dealing with Pakistan have thrown up new dimensions to conduct of diplomacy with changing times and global perspectives. We should not forget that India’s place in global standing has changed considerably in last decade driven by our economic success. Our status as a nuclear power has added new responsibilities in conduct of foreign policy. As we occupy positions in global institutions and fora with the shrinking digit after G, our responsibilities as a nation increase. We also become more susceptible to pressures of partners on international issues. Our overt positions and approaches to global issues define our trajectories. This perhaps was the driving factor for Dr. Man Mohan Singh to accept the proposal of “Trust & Verify” approach with Pakistan in going ahead with dialogue. He rightly defended stating if we do not talk to Pakistan, we have to talk to third party. But the departure from well established stand and joint statement could have been avoided. We could have even accommodated US concerns if any. However, this should have been done at time of our choice after visible action from Pakistan in terms of some high profile arrests. Even if we acted under pressures, it should have been made to be seen as independent decision in pursuit of our objectives. This is where the failure of diplomacy lies. The intentions may be fine but packaging has failed us miserably exposing chinks in our diplomatic armor.


The Paradigm Shift:

In the new paradigm that diplomacy finds itself, one lesson is sure to be learnt and it is that we will be always under pressure to find new approaches and give up the familiar. Indian foreign policy has to be firmly rooted in four tenets of our national priorities and ambitions. Foremost is to secure national interest, second is to be seen to be globally effective, the third is to bring fresh approaches to resolve international issues and last but not the least is to be seen to be carrying other nations with us. India has been leader of SAARC minus six nations. Pakistan would continue to be our Achilles’ heel. Unless we take neighbors on board, we can not aspire for a seat on UNSC. That is the recipe for new global leadership. That is a tall order, isn’t it?


Vijay M. Deshpande
Corporate Advisor,
Strategic Management Initiative,
Pune

July 31, 2009

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Disinvestment- A Strategy for Growth

Disinvestment - a Strategy for Growth

It was the vision of Jawaharlal Nehru that saw establishment of various public sector companies in strategically important sectors of the economy viz. steel, mining and metals, electric power generation, ship building, aircraft building, machine building, atomic energy, defence production, oil exploration etc. The idea was to keep control on all the key factors of endowment and deploy them for social uplift and nation building. India owes its present infrastructure by and large to this 60 year old vision. The policy of investments in capacity building areas has paid rich dividends in last few decades.

There have been few large scale infrastructure building projects in private sector like Reliance Group’s global capacity creations in petrochemical and oil exploration sectors. The private sector needed supporting industries in early days of industrialization. Today we have come a long way and with liberalization as well as industrialization, the private sector does not need hand holding any longer. Today Adani Group is in ports and power sector. Companies like L& T have achieved engineering feet difficult to achieve. So technology or skills or even financial resources are not the forte of the government alone.

Disinvestment has come a long way without much mileage so far. The Economic Survey has suggested that the government should aim at raising Rs. 25,000 crores from disinvestment every year. However, the objectives of disinvestment must be clear and beneficial to the entity being disinvested as well as nation at large. If government decides to disinvest for the sake of bridging the fiscal deficit, it will be like selling the family silver to meet monthly expenses. It is tempting to sell just 10-15% equity in major 50-60 public sector companies to raise around Rs 2 lakh crores. These companies have built the brand equity over the decades with hard work and therefore must be allowed to encash on the same for enhancing their future growth, diversification, capital investments or any strategic benefits.

Strategic Benefits:

The strategic benefits out of disinvestment could be access to new technology, access to new market, access to fresh capital etc. These benefits would add to the strengths of company more than what the company will part with in terms of monetary value of the share holding in the company’s structure. If this advantage can be sustained over a long term then disinvestment is desirable. If such a strategic advantage is not on the table then it does not make sense to disinvest in a company if it is making good profits and growing.

Courage to Disinvest:

The government has been carrying several sick public sector companies on the back as it lacks conviction, political will & courage to take bold decisions. Some of the companies have turnover in double digits and barely past the “teens”. It is shocking to see that revenue of HMT Watches Ltd for 2007-08 is about Rs. 22 crores registering a loss of Rs.58 crores. They have 2200 employees with wage bill of Rs. 53 crores. There are thousands of SSI units with this kind of turnover but they will not have losses and disproportionate manpower. It is no longer meeting any of the objectives for which it was started. A company which could not sustain either market share or mindshare (except those of employees) and has shrunk ten times in as many years piling up losses, year after year, should be a candidate for disinvestment. It would be logical to exit and disinvest completely. HMT Bearings Ltd is in fact a new avatar due to forced acquisition of Indo Nippon Bearings of Andhra Pradesh. It should have been sold off to private sector then instead of merger with HMT.

Professional Freedom:

The fundamental reasons for sickness of such good companies of the gone by era is the lack of professional freedom to the managements of PSUs and political interference in strategic decision making process. It is just possible that professional managers of HMT may have liked to shut down such units but the government can not take a decision.

Air India is a classical case of the minister virtually being in the driver’s seat. Air India and Indian Airlines were merged to leverage and optimize on common resources but the experiment has not succeeded. Air India made estimated loss of Rs. 7200 crores last year. Air India has asked for bailout package of Rs. 20,000 crores. Why are they in such a big mess? It is not just due to global meltdown. The government should make public all the facts . In fact Air India can also be disinvested completely instead of a massive bail out. If government wants to keep the national flag carrier for its own use, it may retain a small fleet and sell off the airline at a time of its choosing to maximize valuation as the global aviation markets are currently in turmoil. It may retain say 25% share for strategic reasons from national security point of view.

Satyam Computers, a large private sick company, has been handed over to Mahindra Group, which would surely turn it around. The government appointed a board led by Mr.Kiran Karnik to facilitate finding a suitor for Satyam Computers. They did just that job swiftly and nicely. CMC Ltd, a central PSU, was also sold off to TCS. BALCO, VSNL were also sold off. There is no reason why stalwarts like Mr.Ratan Tata and Mr.Sam Pitroda, whose names are going around for nomination on the board of Air India, be given similar mandate to restructure the airline such that it can be sold off, or managed and turned around without a minister at the helms.

Mergers to Avoid Harsh Decisions:

The efforts of the government to merge loss making units into profit making ones are nothing but refusal to accept realities and increase the burden of good companies. There should be due diligence of product and manufacturing technology, needs of the markets and ability to service the same if allowed to survive. The government has supported sick units with cash / increased equity support without turnaround for decades. Some where this must stop. Shape up or get shipped out should be the mandate to the managements without interference from government and the ministers.

Organization Culture:

A good number of listed PSUs have out performed the markets. It is due to the nature of their business impacting the work culture. Generally, the organizational work cultures of PSUs have never been in sync with the global trends and competition, which has been the reason for decline of once glorious companies. The only way to change the mind set of employees is to have the same at the top. That is possible with free hand and liberal mandate with change of ownership. The government may keep say 25% stake only without operational control in strategically important companies and disinvest the rest in a strategic tie up at appropriate time to maximize the benefits.

Lesson from Global Meltdown:

There are 33 sick companies in ministry of heavy industries. The best of the global names in various businesses have gone under due to global melt down in last one year. There is no good reason why the government should not identify sick companies in central as well as state public sector domain and disinvest totally. At the least that will stop perpetual losses and negative contribution to the exchequer. Let us not forget that for every sick company in public sector there may be number of private sector competitors meeting the needs of the nation.

Disinvestment has to be done with human face no doubt. Since the employees are highly skilled they should be able to take VRS and move on to better opportunities elsewhere. If the government does not want to face the inevitable there is just one question to be answered. For how long the tax payer’s money will be allowed to be drained through such unviable units? We must have a coherent long term policy framework for disinvestment and reinvestments irrespective of the political spectrum at the helm of government.

Disinvesting for Leveraging Growth:

The government has budgeted for realization of proceeds of Rs. 1,120 crores through disinvestment in companies in this fiscal. This will generate cash surplus which should go to National Investment Fund. NIF should be treated like a trustee for the funds till they are redeployed productively for strategic projects. However, the proceeds should not be diverted for meeting the fiscal deficit. Disinvestment as a strategy for meeting fiscal deficit is ill advised. It must be the main strategic plank for making investments of the past more efficient and for greater leverage in strengthening the core competencies of the nation.


Vijay M. Deshpande
Corporate Advisor,
Strategic Management Initiative,
Pune

July 25, 2009

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No-Scams Oath for CEOs & Directors....Hippocrates Comes to Management

No-Scams Oath for CEOs & Directors….
Hippocrates Comes to Management

I was quite impressed and excited to read a news item that a group of students at Harvard University have come together to take an oath after completing MBA to uphold certain cherished values in course of their careers after MBA. A quick visit to their website http://www.mbaoath.org/ gives details of their efforts, the contents of their oath, and similar experiments in different institutes elsewhere. It is worth studying the oath as it tells the recognition and realization of the challenges that lie ahead of the managers under oath. I quote the oath from their website:

Quote

As a manager, my purpose is to serve the greater good by bringing people and resources together to create value that no single individual can build alone. Therefore I will seek a course that enhances the value my enterprise can create for society over the long term. I recognize my decisions can have far-reaching consequences that affect the well-being of individuals inside and outside my enterprise, today and in the future. As I reconcile the interests of different constituencies, I will face difficult choices.
Therefore, I promise:
· I will act with utmost integrity and pursue my work in an ethical manner.
· I will safeguard the interests of my shareholders, co-workers, customers, and the society in which we operate.
· I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the societies it serves.
· I will understand and uphold, both in letter and in spirit, the laws and contracts governing my own conduct and that of my enterprise.
· I will take responsibility for my actions, and I will represent the performance and risks of my enterprise accurately and honestly.
· I will develop both myself and other managers under my supervision so that the profession continues to grow and contribute to the well-being of society.
· I will strive to create sustainable economic, social, and environmental prosperity worldwide.
· I will be accountable to my peers and they will be accountable to me for living by this oath.
This oath I make freely, and upon my honor.
Unquote
This is short version of the oath and full version is available on their website.

This is a commendable initiative taken by the students to draw a parallel from Hippocrates Oath in vogue in the medical world. The cynics would like to question the use of oath in management in the cruel & ruthless world of business. An important point brought out by above website is that it is only after World War II that the medical schools adopted the oath which has worked as a conscience keeper during the course of medical practice. There are, of course, umpteen numbers of instances of negligence, greed and dumping of the oath. We regularly come across the “kidney racket” which highlights the dark side of the reality of medical profession like every other profession. However, by and large it has pricked the conscience of the doctors always even though there have been thick skinned ones who continue to over ride the same.

My blog titled “Value Management Deficiency Syndrome”, dated March 5, 2009 had addressed the deficiency in management of value systems and need to sustain & uphold shareholders’ values. A large number of organizations suffer from ailment I call "Value Management Deficiency Syndrome". They fail to identify, monitor and prevent slippages of certain core values of the organization. While success becomes a habit, so does addition of some "virus" to kill the organization. It is a slow process. But once the critical mass is reached it is difficult to prevent damages to the business and stakeholders. Satyam Computers was the case in point.

Each organization can create an early warning alert system to monitor the health of the key parameters to that there is no deficiency in managing the values. The global meltdown has been due to total dumping of values and short term approaches to beat the system and achieve the corporate as well as personal goals. I am glad that Harvard students have taken initiative to create GenNext managers who would think twice on their commitment to the oath before any breach occurs. How appropriate that only Hippocrates can come to rescue the sick from the ailment of value management deficient syndrome which has plagued our global society in every walk of life.

The above oath is aimed at “Responsible Value Creation” by these Harvard managers. Some of my concerns expressed in my blog on “VMD Syndrome” get addressed in this approach as far as morality issue is concerned. I had also referred to Madoff case which in fact triggered the students at Harvard to think of oath. No doubt it is a slow process to change the society. However, a beginning has been made and it would be a few generations later that we may see the significant contribution from these pioneers provided this movement can be sustained to reach critical mass for effectiveness.

Our leading management institutions may like to join such a movement and initiate the change process. Our politicians and members of the judiciary are required to take oath (which is perhaps followed more in breach than in compliance). Nevertheless, can industry CEOs and members of the board of directors of listed companies at least, take an oath and live up to that commitment and make difference to the society? What about the chartered accountants and auditors who are charged with responsibility of ensuring compliance with the norms laid down by the law? Can SEBI/ Company Law Board evolve a model code of conduct which becomes the oath? What about the top bureaucrats, ambassadors, secretaries in the government? If they get committed to oath, may be they can stand up to political bosses. Society depends on them for upholding the values. Can they commit themselves to some shared values?

Today, we face situations of whistleblowers getting killed because they exposed the wrongdoings. There is no protection for those who want to follow the path of accountability to society. Why condemn politicians if industry managers can not practice what they believe. Of course simple answer is that the industry managers have to manage the political environment and hence what they do is in the best interest of the shareholders. If they get committed collectively to an oath they may be able to find alternatives. Let us not worry about a few exceptions which will always be there anywhere. Would medical professionals the world over agree to do away with Hippocrates Oath just because some of them violate the same?

Corporate Social Responsibility (CSR) can not end with running a charity trust for taxation benefits or a school for children of employees. Enron, Satyam and Madoff cases, along with perhaps whole lot of companies who may have gone bust in last one year, are eye openers for the world of business which has no boundaries due to globalization. Morality also does not have geographical boundaries. Can IIMs, CII, FICCI, Administrative Staff College of India and SEBI come together to take initiatives & galvanize this movement in India and give muscle to the corporate governance? Political governance will follow only if corporate world shows the way. The lack of governance has been sustained only because the business community has directly or indirectly supported the system for their own survival. Some one has to break the mould. The students from Harvard may be the crusaders and may have shown the way.

Vijay M. Deshpande
Corporate Advisor,
Strategic Management Initiative
Pune

July 17, 2009


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What Budget?...We Need Plumbers to Fix Leakages!

What Budget?....We Need Plumbers to Fix Leakages!

Annual Budget of the government is most talked about on the day of presentation it self, with every thing pouring from admirers and critics on the same day, since TV channels have to do 24 x 7 job. So, I would restrain from commenting on the provisions of the budget itself.

Budgeting For Elections:

Annual ritual of presentation of union finance budget has lost it’s sheen of late with so many minibudgets during a year, with little regard for budgeted expenditure and leaking delivery system. Every budget with an impending election is an opportunity to please the vote bank and in a term of five year, every year there is election in one or other state or panchyats or zilla parishads, municipal corporation etc. So it is all weather season for freebies.

Union Finance Minister Pranab Mukherjee presented the budget 2009-10 projecting a high gross fiscal deficit (center & states) of 10.8 % of GDP. This is not surprising for two reasons. First, Chidambaram had given a go by to FRBM by taking out largest unplanned chunks of expenditure, Rs. 70,000 crores of debt waiver to farmers out of purview of FRBM with deficit for 2008-09 soaring to a high of 11.5%. That was a small price to pay for coming back to power as UPA II.

Secondly, global meltdown had its impact and the stimulus was essential to prevent the economy slipping into deeper recession. Pranab Mukherjee did reiterate commitment to FRBM targets in subsequent two financial years. In a one to one conversation around 1993, I happened to ask Dr. Man Mohan Singh, when he was Finance Minister, as to why India can not have something like Gramm Rudman Holling Act of USA for controlling fiscal deficit. He explained that India being a developing country was not yet ready then but was in favor at appropriate time. Now it is a sad precedence that FRBM can be bypassed or set aside when inconvenient politically.

UPA has not yet finished its political agenda, mainly the forthcoming state elections, and so with focus on expenditure on social sectors (NREGA & others) with outlay of Rs.40, 000 crores, the deficit is expected to continue to pile up. Infrastructure projects get Rs.30, 000 crores with provision of budgetary support of Rs.100, 000 crores. So what can be expected out of the expenditure planned till end of March 2010? The government will borrow the money for these projects in social sectors. The budgeted expenditure of Rs.70, 000 crores will be incurred in the social and infrastructure sectors, but the progress on ground level will be far from the targets with the result that there would be hardly any spin off felt in terms of economic boost in current fiscal. On the contrary, heavy borrowing of the government would push other borrowers from industry out of the market and inflation through the roof. Interest rates would go up due to paucity of credit and industry would be severally punished delaying the economic turn around.

System Absorption:

The government has acknowledged at highest levels that there are plenty of leakages and slippages in delivery and just 15 paise ( or is it 10?) out of a rupee spent reach the people it is meant for. My question therefore is that knowing this fact for last 30 years what have we done to break the system to ensure full delivery? Shall we say that out of Rs.40, 000 crores being allocated for social sector roughly Rs.6, 000 crores may reach the intended beneficiaries? The remaining whopping Rs.34, 000 crores get absorbed by the delivery system or shall we say “transmission losses?” It is a very polished term for corruption in the system. What about similar figures for infrastructure sector? The system comprises politicians, officials and contractors though all of them individually are not necessarily corrupt. According to Yashwant Sinha, M.P., in Jharkhand state 60-70% of billing under NREGA is fictitious and the scheme is a bottomless pit. That reflects the magnitude of tip of iceberg called leakages and black money generated year after year. So why are we shouting from roof tops to get black money in 100 days from overseas? There is so much of black money evidently flowing through and very much under direct control of the government.

Discounting the budget?

Does the budgeting exercise, to be deliberately naïve and simplistic about it, assume that if 15 paise is the need for a project at the ground level then budgeting is done for one rupee to ensure successful implementation? Or is that we know for sure that the targets will not be achieved beyond 15% of full planned capacity? Either way it is simply atrocious. What is the budget all about when the system is out to subvert a plan?

We read mind boggling figures of say 200,000 villages benefiting from a scheme or 4 crore jobs (fictitious?) have been created. Who has checked and counted them? CAG? If we assume veracity of figures, then why is that so much of population remains under BPL even after 60 years? Obviously the poor class remains poor for ever and middlemen become richer year after year. There is tremendous gap in ground reality and the cosmetics. We need to establish integrity of data which will be possible only with integrity of the politicians first.

Program Implementation:

Budgeting for expenditure and income is one thing but implementation of programs is more critical need for the country. UPA government should take up on the task of revamping the program implementation and monitoring system. Why is it that Nadan Nilekani has been taken on board for Unique ID project? I am sure it is to address the problems of implementation of project. This acknowledges lacuna in the ability of government machinery to deliver the results. One must admire the Prime Minister to have taken this decision to bring talent from private sector to execute the project. While this may be the beginning of “privatization” of CEOs for government projects, let us take the clue and build on this precedence to evolve a model for delivery of results for all the large ticket government projects. Can the government make a beginning to appoint top class CEOs from private sector for any scheme or project with outlay of more than Rs. 5000 crores? E.Sridharan, the Metro Man, has proved that there are good and competent CEOs even within the government system. What is required is to identify them and hand them over the reins without interference and with accountability as done for Metro and now for Unique ID Project. Of course, let not Public Enterprises Selection Board do the selection!

Institutionalize Experience:

It is not possible to get E. Sridharan to do every project. What is easy and feasible is to have his project implementation systems, checks and controls adopted for other projects. The organization structure and empowering of qualified people has to be done with accountability as done by Sridharan in Metro projects. We have to institutionalize his experience. Instead of Lalu going around IIM, World Bank and Harvard, people like Sridhran should be making case studies for such institutions. Can IIMs design a better delegation, control & monitoring system based on experience of E.Sridharan?

All the social sector projects (NREGA etc.), infrastructure projects and other key projects must be listed on the website of the ministry with schedules, and targeted tasks along with actual status on a quarterly basis, if not monthly, so that the public may be able verify the ground reality. Names of the CEOs for each scheme / project should also be given in public information.

Budget for “Leak Proof Pipeline”:

If Pranab Mukherjee has to ensure that the money is spent on intended projects as per schedules, then he must bring in different systems for accountability, monitoring and control. The cost over run is the last thing we can afford with fiscal deficit going further out of control. He should budget for “leak proof” pipeline! He should present a plan on how delivery of “15 paise” can be increased to one rupee with no “transmission losses”. After all it is tax payers’ money. If we want to give a real stimulus to the economy and control fiscal deficit, a beginning on this front would yield richer dividends and that too tax free! We would get rid of fiscal deficit for ever perhaps and provide a strong stimuli for boosting economy out of the woods.

Even before the ink has dried on the budget document, Union Power Minister Sushil Kumar Shinde has already said that provisions can be made during the year for requirements of his ministry not covered in the budget. So there goes the budget for a toss!

Vijay M.Deshpande,
Corporate Advisor,
Strategic Management Initiative,
Pune

July 8, 2009

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Kapil's Devils....Reforms in Education

Kapil’s Devils…Reforms in Education.

Well this is not about cricket! This is about the other Kapil in the news. Kapil Sibal, Union Minister for HRD, has bowled entire team with a single googly of reforms with far reaching consequences. Some of his proposals, though based on Prof Yashpal’s report, do not reflect the cohesiveness and integrated approach necessary to educate and build the nation of billion plus. If Kapil Sibal wants board examinations for SSC to be scrapped, how would students understand the need to compete for survival? How would a student from non-quota, non-reservation category compete to get a job with a long queue of reserved category students ahead of him? We are giving them easy options. One learns to explore and improvise only under pressure. More than passing the examination, a student discovers his own limitations, strengths, and builds self-confidence. He knows exactly where he went wrong if he did. We are killing the spirit of learning, self- discovery, and competition by scrapping board examination. If I may borrow the term, examination is a “Confidence Building Measure”.

Obama, Cheer up! Indian Students May Not Compete:

President Obama warned the US citizens to take children away from TV rooms into class rooms to be able to compete with Indian students. This just sums up that we are able to churn out most competitive students. Why blunt the cutting edge we have by scrapping or reducing the importance of examination? A student, who is afraid of examination of what he has learnt, can not be competitive.

If ICSE and CBSE students are better than SSC students, we should not dilute their chances by introducing reservations for SSC students in local institutions as Maharashtra is trying. If ISCE or CBSE boards are scrapped it means we are accepting lower standards of SSC which is the lowest common denominator. A politician should not be allowed to take a serious issue like education in his hands. Arjun Singh with one political stroke made mockery of higher education in India. And not a single politician could raise voice against him. Mayawati can not be left behind the race and she simultaneously announced replacing system of evaluation in UP.

Kapil Sibal wants IITs to also handle medical and law streams. Why can’t the best of law schools of India come up to levels of IITs by raising their standards. Or why not best of medical colleges elevate themselves to those which they wish to emulate and spread like IITs? Let IIT not lose the focus of technology. 30-years ago I read a board in an ice cream parlor in Nairobi reading “We have reached understanding with banks that they won’t sell ice cream and we won’t encash cheques”.


Rationalize, Integrate, and Strengthen the Education System:

If at all Kapil Sibal wants to rationalize board examinations, then I feel there is no need for board examination for Standard XII which has become superfluous with multiple entrance examinations for all technical disciplines. The board examination should be held only for students intending to pursue non-technical streams like arts/commerce/science. In fact IAS selection examinations are also likely to be remodeled taking students after standard X and developing them in special training academies like National Defense Academy for defense services. We need to critically look at all streams where educated manpower contributes for national endeavor. From primary level-to- graduation, from technical, to humanities, defense services, administrative services, multi disciplinary and multi-tasking, all the education systems have to be rationalized, integrated and strengthened.

Education and Growth Opportunities:

Education reforms have been overdue. However, there is a need for serious consideration of long term needs of education 10-20 years from now. Manpower is India’s major strength in the global economic sphere. In next 20 years we will add a new generation or at least 200 million of new work force. What sort of education should they get to be able to find suitable jobs at that time to sustain and improve competitiveness of India? What would be the requirements of vocational manpower for different segments of industry? As of today there is considerable gap between the output of educational institutions and the needs of industry. Consequently, the industry is required to hire unsuitable candidates, retrain them to make ready for use before deployment at productive work. Plastics industry, for example, faces this problem acutely. If the educational system does not match the needs, the onus of re-educating shifts to industry.

Competitive Advantage of the Nation:

While it is necessary to reduce the hype of examination and burden of backpack, the alternatives have to be evaluated by the educationists. The overall changes and reforms must fit into strategic plan of Knowledge Commission. IT industry has been the driver of Indian economic boom of last one decade. What new technologies would drive the global economic booms 10-20 years from now? Is it bio- technology, aerospace technology or something else? Will we enjoy competitive advantage in those new areas? Competitive advantage of a nation has to be built into the economy very assiduously over generations.

Ten Year Knowledge Society Plan for Country:

The educational reforms, therefore, should not be announced peace meal and must be handled with long term perspective, planning and integrated approach. The educationists, the technology planners and the user industry must have full say in formulation of policies to serve the nation. A draft education policy should be circulated amongst all the stake holders like the political parties, state governments, bodies of parent teachers associations, educational institutions, universities, industry bodies like CII, FICCI, ASSOCHAM and others. The policy document should be published on the website of HRD ministry for gathering public opinion. The document should also present strategic fit of new policy with long term needs of all the stake holders. In short, once accepted by the stakeholders, it should be a “10- year Knowledge Society Plan for the country”, which can not be tampered by changes in the governments at center and states or by political parties at their whims and fancies. The states may update the syllabus as and when required within the overall frame work defined by this plan. The formulation of policies and consultative processes may take whole year and therefore changes, if any, should be introduced after due diligence from next academic session.

Implementation of Plan:

Implementation of plan should be steered by eminent person, like Nandan Nilekani who is placed in charge of Unique National Identity Authority, and empowered for implementation. Can we give education as much importance as an ID card to deserve best of the leader to show the way?

Vijay M.Deshpande
Corporate Advisor,
Strategic Management Initiative
Pune

July 4, 2009