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Many years ago, I was hanging out with a friend of mine in an industrial park.
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His name is Narendra and he wasn't at that time the Prime Minister of India.
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So we were just shooting the breeze, talking about girls and cars and all the books we'd
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I mean all the books I'd read because he isn't much of a reader.
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When suddenly it started raining, I loved the rain and this change in weather put me
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I asked Narendra, yes, it's very romantic, he said, as he reached out and touched my
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I could really do with some chai and pakoras right now.
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I can organize the chai, I replied, but where will we get pakoras from over here?
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No one here sells pakoras.
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When he heard that, Narendra got very serious.
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He thundered, no one here sells pakoras?
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Welcome to the Scene and the Unseen, our weekly podcast on economics, politics and behavioral
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Please welcome your host, Amit Bhatma.
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Welcome to the Scene and the Unseen.
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Before we start today's episode, a note from our sponsors, if you love art, but find the
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And now on with our regular programming.
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My guests today are my good friends and regular guests on the show, Vivek Kaul and Shruti Rajgopalan.
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Vivek and Shruti, welcome to the show.
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Vivek is here with me in the studio, while Shruti is connected to us via Skype.
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The topic for today is pakodanomics.
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I hope I pronounced that correctly.
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You can even call it bondanomics, because bondas are more famous south of the wind.
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But that's not the word Mr. Modi used.
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So pakodanomics is inspired by a recent quote from our Prime Minister Narendra Modi.
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Here's what he said, quote, if someone opens a pakoda shop in front of your office, does
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that not count as employment?
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The person's daily earning of rupees 200 will never come into books or accounts.
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The truth is, massive people are being employed, end quote.
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Now it's true that some massive people like me are indeed employed, but leaving that aside,
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I had a hard time trying to figure out just exactly what Mr. Modi was trying to say here.
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So Vivek, what was he trying to say?
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So basically what I think he was trying to say is that we need to differentiate between
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It is not about creating jobs, as we tend to argue over and over again, but it is about
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And I think that's a valid point.
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The second point that he was perhaps trying to make is that you shouldn't expect the government
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to create jobs for around 1 million Indians who are entering the workforce every month.
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And for around 8.4 crore Indians who need to be moved out of agriculture so that agriculture
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becomes economically feasible.
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These were the two points that he made.
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And his solution was that, you know, anyone who's sort of selling pakodas on the street
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or anyone is selling anything for that matter on the street, because pakodas are just incidental
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here, is also making money and that is adding to the employment.
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But I think, you know, that something like this shouldn't have come from the prime minister
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of the country at least.
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So before we move on, I want to take a really layman's approach to this episode and ask
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you to elaborate on your point about jobs and employment.
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What do you mean jobs and employment are not the same thing?
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Okay, so jobs, I mean, let's say you were working for Wisden, Crick Info at a certain
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point of time, that was a job.
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Right now, you don't work for anyone.
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You work for anyone who gives you work.
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So as long as people are employed and gainfully employed and are getting paid reasonably for
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it, I don't think it matters whether they have a job or not.
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So I guess, so the debate should not be that India is not creating enough jobs or India
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is creating enough jobs or whether India is creating enough jobs, but the debate should
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be whether India is creating enough employment for the people who need it.
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I mean, we are not nowhere near creating enough employment as much as is needed.
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And we have one million people coming into the workforce every month.
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Like you pointed out, that's 10 lakh people and nowhere near that amount of jobs are being
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I mean, so one of the recent estimates that CMI Center for Monitoring Indian Economy came
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up with was that in the year 2017, around two million opportunities were created and
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nearly 11.5 million Indians entered the workforce.
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Now, we need to sort of also state here very, very clearly that India does not have very
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high unemployment, which is primarily because of the fact that anyone who does not get a
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job in India ultimately ends up in self-employment.
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So our unemployment rates are extremely low.
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In fact, the International Labour Organization just came out with numbers and the rate of
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unemployment in India is something like 3.5%.
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Now, which is, I mean, then the next question to ask is, you know, why are we even talking
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about all this if unemployment levels are so low?
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So is it a point like I've often heard it said that our problem isn't unemployment as
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much as underemployment?
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So which is, you know, unemployment rates are low because everyone's doing something.
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But the question is whether that something is productive enough and the answer is no.
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And like recently I heard about some PM's job in Delhi where there were like 20 vacancies
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and some 40,000 people applied, including hundreds of PhDs and MAs and all of that.
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And that, I mean, that points to dual problems.
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I mean, one of those problems, of course, is that a lot of the education system, you
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had credential inflation in the sense it's, you know, those degrees have kind of become
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meaningless and people aren't really being trained for the workforce.
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There is a mismatch between education and what the labor market wants.
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And this is something you've, you know, you and I have spoken about in a previous podcast.
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So basically what is happening there is twofold.
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One is that, you know, all these MBAs and PhDs and graduates that we are producing,
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a huge number of them are simply unemployable.
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And the second thing is that at lower levels, the government is a significantly better paymaster
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than the private sector.
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So there was this study carried out, you know, by the seventh pay commission.
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And this is, these are 2013, 14 numbers.
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And they figured out that, you know, at the junior most level, you know, what, what they
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call euphemistically called a helper, but basically meant a peon.
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The government salaries are at around 21, 22,000 rupees per month, whereas the private sector
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pays around anywhere from eight to 9,000.
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So which is why you get so many people and so many qualified people applying for all
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these jobs and the job security also, I mean, job security, then, you know, you obviously
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have this huge fascination for government jobs in India.
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Then I mean, at any level, you at least have this thought that you'll make some other income
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as well, you know, beyond what you get as your salary and so on and so forth.
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So Shruti, I want, I want you to chime in here.
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My question to you is that, you know, one of the points which Vivek pointed out Modi
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was probably making is that, Hey, it's not my government's job to create jobs, which
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I know all three of us would kind of agree with, while traditionally it's, you know,
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you'll have politicians taking credit for job creation and you'll have people criticizing
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this government or that government for not creating jobs.
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But what government can't actually create jobs, right?
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So where do jobs come from?
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The government doesn't have an obligation to create jobs and the government can't actually
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manufacture productivity.
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It's quite the reverse.
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Usually when the government starts releasing employment schemes and programs, it's the
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opposite of productivity.
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However, the government does have an obligation to create an environment that is conducive
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for private individuals to be able to find their optimal job and for skills to be matched
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to requirements in a very, you know, fairly low transaction cost way within an economy.
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So to that extent, the government does have an obligation to create an environment that
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will then itself create jobs.
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So what you'd mean by that is, for example, that the government would have to do things
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like maintain the rule of law, enforce contracts and so on, on the one hand, while on the other
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hand, getting out of the way of voluntary exchanges within society and not having too
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much of the license and regulation, Raj, basically, which acts as a dampener on private enterprise
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and raises transaction costs.
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One of the things that's happening in India is that as a country, we have made it too
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costly to employ unskilled labor, and when it's too costly, then the skill level has
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That is to make it worthwhile to hire that particular labor and pay that wage, or it
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has to come in terms of productivity.
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It's a labor surplus country, but manufacturers are reluctant to hire labor and employ other
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Now in the process, the people have to do something.
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So one is in many developed countries where there are unemployed benefits and so on and
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so forth, you see these people reflected in unemployment figures.
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As Vivek pointed out, that doesn't happen in India.
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So these people get reflected or rather get hidden in self-employment, in culture or street
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vending or so on and so forth.
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So what is happening in India is we see very little of the problem in terms of data points,
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but we see the problem everywhere.
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People are not that productive and people are not that rich.
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And you know, one of the things I've noticed in recent discourse is that, especially after
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demonetization and GST, is that the informal economy gets a bad name.
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But the point I keep making is that the informal economy only exists because you made it so
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hard for the formal economy to function.
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So all these people who can't get jobs in the formal economy because of these labor
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laws and the variety of other regulations and all have no choice but to be part of the
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informal economy, they're not there out of choice.
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And a lot of these people who are self-employed are not self-employed in the glamorous way
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that I, for example, that Vivek and me are where we are, you know, freelance columnists
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or whatever, but are self-employed in the sense of say the pakora seller who don't have
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That's pretty much all they can do to survive.
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Yeah, there are two aspects to the problem that you just pointed out.
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The first is when the English speaking elite or elite who are tweeting that there's really
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nothing wrong with what the prime minister said.
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I mean, they're right in the sense that factually there's nothing wrong with what the prime
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But their priors about self-employment are completely different from what is the reality
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For most of us, like you mentioned, especially you and Vivek, you are self-employed out of
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That is your choice of being self-employed is far superior to the alternatives of the
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kinds of jobs that you might get.
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Now what happens with the street vendors, the exact opposite.
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They would really like to get a job.
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They would like the security of the job, but they can't seem to find a job and they have
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So they are self-employed as last resort.
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And it is very difficult to be a street vendor in India.
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I don't think given a choice, most of these people would want to be self-employed.
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There's a secondary aspect to it.
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Normally, when we think about entrepreneurs, you would think, oh, so today he's selling
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pakoras as a street vendor.
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Now if he's really entrepreneurial tomorrow, that pakora enterprise will become bigger.
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Maybe he'll go from a cart to a food truck.
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Maybe he'll go from a food truck to a restaurant.
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Now that is the conventional thinking about self-employment and entrepreneurship when
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That never happens in India.
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When we say is it not jobs when a pakora seller makes 200 rupees a day, let's be very clear.
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There is no upward mobility there.
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He's going to continue making 200 rupees a day.
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It's never going to turn into a pakora shop.
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It's never going to turn into one of those places where pakora store, AC at the first
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floor and non-AC in the second floor.
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So the self-employment also has a very, very clear ceiling in terms of future growth and
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productivity and opportunity.
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So before I cut back to Vivek, just break that down for me.
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Like why can't the pakora stall become a pakora chain?
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The pakora is affordable at that price for a regular person who might also be self-employed
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or trapped in a low productivity environment.
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So if pakoras are selling at say 50 rupees a plate or 30 rupees a plate, then to make
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it at that price, you can only do it on a street cart because it is just simply too
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costly to scale it up into any kind of formal establishment because formal establishments
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require all kinds of permits and licenses and health inspections.
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There are different surveys done in different cities on how many gazillion permits you need
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to open a small shop or a restaurant.
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I'm not exactly aware what it is for an eatery in Mumbai in the exact locality where you
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are, but I would guess it's pretty high.
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So Vivek, let me sort of come back to you here.
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You published a column on the day we are recording, which is January 24th.
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You're listening to this on the next Monday or rather this was released on the next Monday.
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And you wrote this column about pakoranomics, coining that most excellent term, which I'm
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And you sort of broke down Prime Minister Modi's logic.
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So can I ask you to sort of go over your chain of thinking?
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So, you know, first and foremost, I didn't come up with the example of pakora, Mr. Modi
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So that's a very important point.
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But pakoranomics is your coinage.
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Pakoranomics was my coinage.
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Also, you know, we shouldn't be getting here into the unit economics of how profitable
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it is to sell pakoras, because, you know, we all know of some pakora wala who made it
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You know, I was tweeting about this and one gentleman sort of tweeted back that there
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was some pakora wala in Borivali, which is Mumbai suburb with, you know, who had to face
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a raid by the income tax department.
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I mean, there are always exceptions like that.
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But a pakora wala essentially is a representation of a self-employed individual who is trying
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to make money by selling some stuff on the streets.
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And we have too many people selling too many things on the streets of India.
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I mean, this is a point that we need to keep in mind.
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Now if you look at the fact that Mr. Modi talked about the pakora wala making rupees
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200 per day, that works out to around Rs. 73,000 a year.
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The average per capita income in 2016-17 of an average Indian was around Rs. 1.03 lakhs.
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So an average Indian essentially made 41% more than Mr. Modi's pakora wala.
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So there is a problem there.
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I mean, obviously someone's got to, you know, when we're talking averages, someone will
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make lower than the average, but you know, 41% gap is a little too much.
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Then the second point that we need to keep in mind is that the pakora wala, you know,
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unlike me, would definitely not be single.
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I mean, he would have a, I'm using, you know, I'm saying he, because pakora wala's in India
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typically are men, would typically have a family.
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Now assuming, you know, the average Indian household has five people.
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Now if this pakora wala has, you know, a wife and three children, then we are talking about,
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you know, per capita of around Rs. 14,000 per person per year, which is not a huge thing.
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So what we need to understand here is that, you know, all these pakora wala's and self
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employment guys are essentially, as Shruti said, not there by choice, but because they
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don't have a choice, because there are no jobs available or there are no jobs available
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for the skill set that they have.
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Making pakora's, hawking stuff on the street is very easy.
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You need very little capital to start off.
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Now, you know, if you look at, you know, there's some very interesting data that gets put out
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by the labor bureau, you know, and they sort of suggest that close to half of India's workforce
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I mean, the exact percentage is 46.3, but since we live in an era of, you know, hyping
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and overhyping things, so, you know, I've rounded off 46 to 50%.
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Now half of India's workforce is self-employed, which is too high a number anyway, right?
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If you look at their income brackets, very, very interesting, around 41% of these self-employed
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people make up to rupees 5,000 rupees a month, which is up to rupees 60,000 rupees a year.
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Around 67% make up to rupees 90,000 a year.
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Only 4% make more than 2,40,000 a year.
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So most of these pakodawalas slash self-employed people do not even come into the income tax
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So the prime minister of a country sort of, you know, selling this as a vocation, I mean,
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The other point I sort of wanted to make here is that, so there's clearly a problem with
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Now, what is happening now is that self-employment is sort of being mistaken or rather, you know,
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the propaganda is that self-employment is entrepreneurship, which it is not.
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Entrepreneurship and self-employment are two very, very different terms, which we need
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to distinguish between.
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An entrepreneur is always an entrepreneur by choice.
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Self-employment may or may not be by choice.
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So this is a very important, you know, difference that, you know, that needs to come out.
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Also, you know, if you look at, you know, the numbers of people, if you look at the
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income of people who are self-employed, I mean, as I said, 41% of them make up to rupees
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That is way less than the average per capita income.
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That's less than the pakodawala, in fact, of Mr. Mori.
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That's less than the pakodawala.
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So the larger point here is that Indians have been pakodawalas for a few decades now.
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We have been self-employed for a few decades now because we haven't got enough jobs, enough
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employment opportunities, enough viable employment opportunities going around.
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So this is not a new idea.
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I mean, it's just like, you know, old wine in a new bottle, which Mr. Modi is very good
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So is it really correct to say that the pakodawala is not so much a solution as a symptom of
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the problem, which Mr. Modi is sort of ignoring and turning away?
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So, you know, Amit and Vivek, just to jump in here, I don't think in general, it's a
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very productive idea to pick one sentence that the prime minister of a country says
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and then pick it apart the way we usually do on Twitter, but here I think it's really
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important to do it because it seems that the prime minister in this one sentence has captured
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exactly how much we are missing the point when it comes to good economic reform.
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By pointing out the biggest symptom of the problem as an example of success, in this
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case the pakodawala who earns 200 rupees by being self-employed because there's literally
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no other choice for him.
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That I think is a is a bad idea coming from the leadership of the country, which is in
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charge of economic reform.
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And that shows a mindset problem that shows that at some level, you know, our political
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class still hasn't figured out what the fundamental problem is.
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I don't agree with that.
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I think they know very well what the problem is.
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It's just that they can't do anything about it.
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Given the the number of structural reforms that are required and given the fact that
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we haven't had them for a while now.
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So see, every politician needs to fight and win elections.
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Elections happen every five years.
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These structural reforms are to be initiated.
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And if we were to sort of wait for the results, it would be a decade, decade and a half.
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So the, you know, the politicians need to do something in between, which is why I think,
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you know, what this the current dispensation is very good at is sort of taking the attention
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of people away from the real problem.
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I mean, you know, Mr. Modi was elected on the plank of jobs, employment and, you know,
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economic development, minimum government, maximum governance.
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But all that's now fallen by the wayside.
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What we have is Padmavat, which is basically Padmavati or Padmavat, whatever you might
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I mean, from people who have seen the movie, I mean, they say it's a right wingers wet
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dream and but, you know, you look at the kind of protests that are happening against the
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Now, if, you know, if the right wing can protest and protest so successfully against what is
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a right wingers wet dream, imagine the kind of nuisance they can keep creating against
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other, you know, cultural and other, you know, economic issues that keep popping up.
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So these are, you know, you basically want to take the attention away from the real problem.
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So then you make statements like, so this has been happening for a while.
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So, you know, before he made this pakoda statement, he's also been talking about the fact as to
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how mudra loans are creating employment.
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Now an average mudra loan is around twenty three thousand rupees.
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So I don't know how that is creating employment, but Mr. Modi believes that, you know, every
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person who takes on a mudra loan has two, three more people and there's a multiplier
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There has been no study which has shown this.
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The CEO of mudra has gone and record to say that we do not have any data on, you know,
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the number of jobs or employment opportunities that mudra loans have created.
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So this has been happening for a while.
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Then you cannot deliver on what you have promised.
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Then you have to sort of create, you know, and say things which take away attention from
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I would want to add one more thing to what Vivek is saying.
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I mean, I partially agree with him that a part of this whole pakoda story is just, you
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know, some part of it is just spin, right, to deviate from the real problem.
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The first is what Vivek pointed out as the underemployment, which is masked as self-employment.
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But there's a second thing hidden in this number, which we haven't talked about yet.
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As Vivek pointed out, there's very low levels of unemployment in India.
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Now what is unemployment?
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Unemployment is people who are looking for a job and can't find a job.
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Now one of the things that the self-employment story and this whole, you know, the fiasco
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over the pakodawala tells us is in India, people have stopped looking for jobs maybe
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because they know that it is that difficult for jobs to come by.
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It's almost impossible to find one when you have 20,000 applications for four vacancies
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for an office helper or something like that.
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So then the alternative is just to go into self-employment.
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I'll just, you know, buzz in here, which is true.
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I mean, if you look at the CMI data, which came out a while back.
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So they have said that the labor force participation rate has come down.
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So he's, you know, applauding the 200 rupee pakodawala while I think they need to be applauded
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for a completely different reason, which is that they work in a hostile environment.
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But Mr. Modi's reason for applauding the 200 rupee pakodawala is really trying to mask
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both the reasons for the unemployment data point, which is people might have just given
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up and the reason for the self-employment data point, which is just, it is under employment
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or, you know, you just need to eke out a living and look after your family and you have no
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other choice but to do something that seems relatively obvious and easier than the alternative.
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And Shruti, what you say about people giving up on getting a job is actually very poignant.
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You know, in an earlier episode, I was chatting with JP Nara and about the state of Indian
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politics today and he pointed out that two of the qualities that characterize the essence
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of the Indian voter are fatalism and tribalism and it could even be argued that one leads
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But can you really blame the average Indian person?
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I mean, the three of us sitting and recording this podcast are not the average Indian person.
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Can you blame them for being fatalistic about their situation?
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I meant that as explanation, not condemnation at all.
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I mean, yeah, no, no, I understand that.
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I mean, things are just really, really difficult for the average young Indian male joining the
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And one part of that is, you know, what Vivek mentioned in terms of to hide that fact, you
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know, there's a lot of political drama over Padmavat and things like that.
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But the other fact is these young men and women need to be employed in some way.
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And when they can't get that, they find different ways to protest.
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And sometimes the most obvious thing that annoys you or offends you is a great way to
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channel your energy because it's not like the economy allows them to channel their energy
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in a productive fashion.
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And in a sense, that makes Padmavat also a symptom of sorts.
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Like one of the things we're all agreed on and I've been writing about it for ages is
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that Narendra Modi has always been a man who cares more about optics than anything else.
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And perhaps a good reason, because most people don't care about reality, but about the narrative
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they're nurturing in their heads and optics plays directly to that.
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So he's always in campaigning mode.
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Even after 2014, he never exactly got into governance mode, which is where I want to
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focus my next question that Vivek, the point you made about they know what reforms have
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to be made, but they're not possible because of structural reasons, by which you mean what
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the political economy is like and those changes are simply not possible.
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So therefore they just resort to optics, thereby implying that the system is so sclerotic that
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things can never improve for the better.
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Can you elaborate on that to give me a sense of what it's like?
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For example, we all agree on certain labor laws which need to be changed.
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We all agree on certain a whole bunch of regulations and licensing laws, which if they changed
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would allow greater employment in the formal sector.
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But give me a sense of what are the sort of obstacles in their way which prevent that
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So I was recently reading a column in the business standard written by AK Bhattacharya.
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So Mr. Bhattacharya points out, and I didn't know this, that there are 260 labor laws in
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the state of Jammu and Kashmir.
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And I mean, I knew for a fact that there are around 200 labor laws all across India, state
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and central labor laws, but the Jammu and Kashmir seems to have outdone all of that
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and they have 260 labor laws.
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Now they're trying to, so the state of JNK is trying to sort of come up with some sort
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of a code which summarizes these laws.
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Anyway, that's a different point.
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The point is, every time governments have tried labor law reforms, I mean, and this
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includes Mr. Vajpayee who tried some reforms in the early 2000s, there have been great
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protests from labor unions.
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Now labor unions in India, as you would know, are politically affiliated and ultimately,
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given the fact that they are politically affiliated and they are organized, they have a huge nuisance
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Look at, you know, banks, I mean, the government of India owns 21 banks, I mean, why does the
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government need to own 21 banks?
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Some of these banks like, look at a bank like IDBI, it has a bad loans ratio of 25%.
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So why are we running these banks and wasting so much money?
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But ultimately the point is the moment, you know, any government decides to sort of either
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privatize or even shut down any of these banks, there will be a huge hungama because all these
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unions, you know, they're all very well organized and nobody wants to get into that.
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Look at Air India, I mean, we've been talking about privatization of Air India for close
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to a year now, but still nothing concrete has happened.
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I mean, they've done, you know, they've said that, you know, we'll sell the company and
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the employees will be protected.
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But then, you know, you need to, if they were serious about selling Air India, you know,
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by now we would have known as to what are the terms and conditions which come attached
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I mean, does the buyer take on the debt of the company?
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What happens to the employees?
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Can the employees be fired?
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But that has not happened.
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So essentially, you know, no, I think the, but is that a lack of will on their part or
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the friction in the system?
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And it's also, I think, so as Vivek pointed out, the unions are a huge nuisance.
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And I want to add to that, that the other group that is a huge nuisance value.
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So, you know, just off tangent for a minute.
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In standard public choice theory, we call this the transitional gain strap, which basically
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means that everyone, most people agree or everyone agrees that moving from system one
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to system two is beneficial.
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But when you move or transition from system one to system two, there are some winners
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And if the losers manage to organize themselves very well, then they can actually prevent
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the transition from system one to system two, which would benefit everybody largely.
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So now what you need to think about is like Vivek pointed out the example of the labor
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We need to figure out who are these groups, who are the winners and losers for each of
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these categories of regulation or licensing.
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And it's pretty difficult, but I think we can summarize it in two big groups.
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The first is, of course, labor unions, which is the, you know, extremely formal, well protected
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fraction of the economy compared to this huge part, which is completely vulnerable in the
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The other is the bureaucrats.
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Now if we get rid of all the stupid licensing requirements, then how are they going to make
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the rents that they wish to make or their entire reason for getting into a particular
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kind of job to get those rents will be defeated.
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So you actually, when Vivek says structural problems, it's not just frictions from outside.
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It's also frictions from within a very large part of the government, which is the bureaucracy,
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which never really goes away.
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You know, legislators are elected every five years, the bureaucracy is just there forever.
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They are extremely well organized, and it is very difficult to do things that are not
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So it's very difficult to change things.
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Now having said that, I want to defend the prime minister here a little bit, and I also
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want to zero in on where I place the blame.
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I want to defend the prime minister in the following fashion.
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The mess is really too large for one person at the top or a small group of legislators
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at the center to do anything about it.
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Now labor laws are concurrent list.
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You can legislate at the center or the state.
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There's nothing that prevents states from adding amendments, which many states have
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to improve the mess that is the labor law in their particular environment.
#
So we are not seeing any leadership at the state level either, which we could have.
#
I mean, nothing precludes the leadership at the state level from doing something different
#
from what the center is suggesting.
#
So the first is there is a lot of regulation at the corporator level, at the state bureaucracy
#
level, at the state legislation level, which I think it's a little unfair and difficult
#
to pin the blame on the prime minister, not just this one, but any prime minister.
#
Now having said that, where do I think we can impose some responsibility if not blame
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I think the leadership has to set out the ideas and the agenda at the top.
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And that is something that we find missing.
#
The spin story of saying pakodawalas are doing just fine and it's a sign of the Indian economy
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doing well sets a very poor example.
#
The example needs to be that what can the government at the union level do to help governments
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at the state level untangle the regulatory mess and make it easier or have a more conducive
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That is completely missing from the current leadership.
#
So on that aspect, I do think that the union leadership can do the lot and they're really
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They're just deviating from the matter, spinning stories, traveling here and there, talking
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about all sorts of irrelevant nonsense.
#
But Shruti, to sort of go back to the question of the prime minister's vision and concurrent
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lists and so on, the fact of the matter is that Mr. Modi boasted recently about how the
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BJP today rules more states than Indira Gandhi did.
#
The BJP is in power at the center and at many of the states.
#
Take Gujarat alone, for example, if he really had the will to make these changes and the
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conviction that they were necessary, surely he would have made more progress than he had.
#
I totally understand that there's a lot of friction within the system, both from inside
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the government in terms of the bureaucratic structures and from outside in terms of unions
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But at the same time, my sense is that the current political leadership and every single
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political leadership before it in the history of independent India simply doesn't understand
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I am not so well, yes and no to your question.
#
Yes, in the sense that I do think the current leadership and previous leaderships have been
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extremely lacking, no, in the sense that I do think as civil society in India, we need
#
to start blaming more responsibility on different tiers of government and different individuals
#
as opposed to focusing all our attention at one tier of government and one man or woman.
#
So I think that is one area where I might disagree.
#
That's the reason I jumped to the prime minister's defense, not because of what's going on is
#
But I think we need to make state chief ministers, we need to make local corporators, we need
#
to name these people, impose blame and responsibility on them and actually hold them accountable.
#
So that is my limited point.
#
But my point is the BJP is in power practically everywhere, 18 states if I'm not mistaken
#
So what is the philosophy of the party on all these issues?
#
What are its positions?
#
Not only are they not clearly articulated.
#
The only articulations we get are populist articulations, which are good for optical
#
But not only are these kinds of reforms not articulated as something that is necessary
#
that across the board in most places, there's no effort to actually do anything.
#
But anyway, I mean, leaving that aside, it's a longer discussion for another day discussion.
#
But in one sense, I don't think that is a problem or a malady that is BJP centric or
#
So malady, no matter which party and when you ask what is their goal or agenda, it's
#
the same as every party which is winning the most seats and hold on to the most power in
#
I guess I'll summarize that.
#
So basically, I keep, this is something I keep writing on that, writing that India has
#
only one model of governance and which is the Congress model of governance.
#
So as long as we keep following that model of governance, you cannot get different results
#
by doing the same thing over and over again.
#
Arendra Modi is in power because of all the misgovernance of the last six and a half decades
#
and the fact of the matter is that every political party in India is pretty much left of center
#
when it comes to economics and doesn't believe in social freedoms.
#
So it's like for a libertarian like me, that's the worst of both worlds.
#
And in one sense, I think Mr. Modi's government is the most close analogy I can find is Mrs.
#
There is a high degree of centralization of power, a high degree of suppression of economic
#
freedom, except that is the line that Mrs. Gandhi fully bought into.
#
I think with Mr. Modi's current situation, there is a little bit of a spin.
#
They seem to suggest that they want economic liberalization, but there is still suppression
#
And they both suppress social freedom in completely different ways, right?
#
Seeing Mr. Modi's case, what is happening right now in the country and the protests.
#
I just saw a horrific video of kids in a school bus being targeted by some foul group or the
#
And Mrs. Gandhi did it in a completely different way.
#
She also hurt minorities and, you know, forcible sterilizations and all sorts of horror.
#
So I mean, I don't think this is a BJP centric problem.
#
I think this is an Indian governance model.
#
I think it's a design flaw, like, you know, Vivek pointed out that we have one model of
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governance, which is Congress centralized power hold it right at the top.
#
And you know, that's not really when we think about the structural reform that is required
#
in the various sectors, we're talking about occupational licensing, labor reform, industrial
#
I don't think you're going to get that in that model.
#
You know, Shruti, you would have made for a very bad journalist simply because what,
#
you know, it took you so many words to basically what you basically meant was Narendra Modi,
#
Yeah, see, I wouldn't have made a bad journalist, but I'm a professor who needs to fill up hundred
#
So you need to be verbose.
#
Kind of now, microscoping down and moving from the sort of the large issue that we've
#
been talking about and coming back to jobs.
#
And this is something again, Vivek, you and I have discussed on a previous podcast, we
#
had a podcast just on jobs.
#
And given that Mr. Modi is focusing more on optics with, you know, all these fancy images
#
of pakora wallahs earning 200 a day being being what he's selling, you know, are you
#
optimistic or pessimistic about what's going to happen in the near future?
#
Where is the ray of hope?
#
I am extremely pessimistic.
#
I in fact, earlier in the day, I just wrote a piece which I headline India has lost its
#
So I am extremely pessimistic.
#
I'm very pessimistic about the government and what the government can do to improve our
#
I'm very optimistic about individual creativity and entrepreneurship and ingenuity.
#
And Amit, you and I have had this conversation many times over.
#
You even call it the million mutinies after Mr. Naipaul.
#
Actually it's a mutual friend, Barun Mitra has, you know, invoked that Naipaul term in
#
So the fantastic Barun.
#
I mean, Barun is amazing.
#
Well, everybody should follow Barun Mitra on Twitter and in life.
#
But I think that is what I'm optimistic about.
#
I am still very optimistic about the average Indian.
#
I mean, look at Indians.
#
They survived a disaster like demonetization.
#
Because Indians are fundamentally intelligent, entrepreneurial, try and find a way to get
#
by despite all the oppression of the state.
#
And once in a way, while they are just getting by and just sort of surviving, you see the
#
incredible idea, you see the incredible entrepreneurship, you see the next hero.
#
So that I'm very optimistic about the Indian people.
#
The flip side of that might well be that they survive just by being fatalistic, not necessarily
#
Fatalism is not optimism, you know.
#
No, but what I like about India is, you know, like Mrs. Joan Robinson said that anything
#
you say about India, the opposite is also true.
#
So if there is a very large group which is fatalistic, then there's a very large group
#
that is entrepreneurial and clever and ingenious and will come out of it also.
#
So the large enough group of people that we're talking about that I think that we can easily
#
find the million mutinies that we're looking for.
#
On that marvelously optimistic or pessimistic note, whichever way you look at it, for we
#
I'll thank you both for coming on the show where we agreed and disagreed so much because
#
And it's always a pleasure talking to both of you guys.
#
And I hope we can continue to do so in future after Mr. Modi listens to this particular
#
I mean, for inviting me when I pretty much just sort of elbowed my way into this conversation.
#
And I wanted to make two plugs.
#
One, when you talked about Indian colors, you guys can't see it because I'm not in the
#
I'm actually wearing a Harain Waqeel scarf with the jazz player and the other plug that
#
everybody should read Vivek's book.
#
So Vivek's book, give big government invites hurting you and indiancolors.com colors with
#
If you enjoyed listening to the show, you can follow Shruti on Twitter at S Raj Gopalan.
#
You can follow Vivek on Twitter at call underscore Vivek.
#
You can follow me at Amit Verma, A M I T V A R M A.
#
If you want to listen to more great podcasts from India, check out IVM podcast, just download
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their app, like them on Facebook or Twitter, and you'll find many more great shows for
#
archives of the scene and the unseen.
#
Please head on over to scene unseen.ie and I've done plenty of episodes with both Vivek
#
They were never together before this.
#
Thank you for listening.
#
If you enjoyed listening to the scene and the unseen, it makes complete sense for you
#
to check out the PRAGATI podcast, a show on public policy.
#
PRAGATI is a magazine I edit and the PRAGATI podcast is hosted by two of my colleagues,
#
Pawan Srinath and Hamsini Hariharan.
#
Every week, Pawan and Hamsini analyze views and news from India and the world and talk
#
to experts and practitioners on a wide range of issues.
#
It's out every Thursday, so there's your midweek fix right there.
#
As you can see, we have a podcast listener in his natural habitat.
#
Millions of years of evolution have led him to this point.
#
He's on his way to work and listening to podcasts makes his miserable day better.
#
He will now head to work and use all his knowledge to communicate with other colleagues and possibly
#
You can find more of his species on ivmpodcasts.com, your one stop destination where you can check
#
out all the coolest Indian podcasts.
