To people who doubt Aam Aadmi Party

AAP/Kejrival has become a hot topic of debate both for its ideologies and its economic policies. There are people who support it vehemently, there are many who doubt it and many who oppose it. The ones who oppose Kejrival are mostly supporters of Mr. Modi. In this letter I argue why I would not doubt AAP/Kejriwal and also prefer him over Modi.

One of the reasons people do not support him is because they feel that that his policies are populist. To judge a policy to be populist we need to question its financial sustainability. The AAP team has always maintained that they feel that the prices are high because of high corruption (they have given many prima facie evidence for that) and inefficiencies and if these problems are resolved then the prices can be lowered. He might very well be right and then Delhi government will not have to provide subsidies on power and water. He has clearly said that these subsidies are short term and these policies will be reviewed. Many people argue that 700 litres of water is too much. Well Mr. Kejrival has himself said that while we can not argue that it is the government's responsibility to provide lifeline water, the quantum can be debated upon. Thus we can say that he is willing to consider reduction in the minimum amount of free water allowed. Many people are arguing that he should have first conducted audits on power companies and then taken up a decision on electricity rates. (The subsidy has been given to people who use less that 400 units, so any body who uses air conditioners will not benefit.) If he would have done so, many including his political opponents would have started arguing that he will not fulfil his promises. Considering that AAP is going to fight the Lok Sabha elections very soon, should we blame Mr. Kejrival for announcing subsidies on electricity which he is going to review after the audit results come out. Also we can not call him a socialist when AAP talks of increasing competition in the power sector. The larger point is that it is too early to judge his policies as populist. If he continues the same for even after two years, then we can take a judgement call.

Some people question his integrity and say that he is hungry for power and that he is actually a B team of congress to stop Mr. Modi. Well Congress can accept anything but an attack on the first family. It was Kejrival who tried to expose Mr. Robert Vadra. So he clearly can not be with congress. Here is a video explaining the Vadra scandal Link and another video where top journalist commend Kejrival for what he did Link. He left his job in income tax department and was working in the streets of Delhi to bring about change and awareness. Very few people know it, but he lived for 3 months in slums of Delhi. Imagine the strain that would put between you and your wife and children if you tried to do that. How can we question his integrity. Some people accuse Mr. Prashant Bhushan for his comment that there should be a referendum in Kashmir to decide what should happen. India got Kashmir under very controversial circumstances (to learn in detail read the book Freedom at Midnight). What Mr. Bhushan suggests is only too idealistic and democratic in nature and I know that it is not nationalist and practical and I oppose it. Also it is only his opinion and not the party's stand. Should a party not allow people to have their individual opinions or else how will new ideas come up.

Now coming to Modi vs Kejrival debate. Mr. Modi seems to be an honest and efficient person who has done a fair job in Gujrat. But where Mr. Modi fails is that he is an outcome of the same old system. He may himself be good but just like Mr. Manmohan Singh he can just can not take a stand against the wrong doing of his own party members. Why has he not done or even talked about preventing the rampant corruption in mining sector. Why did he not prevent a tie up between BJP and Yedurappa which happened today. Karnataka was earlier run by mining barons such as Reddy Brothers and but the land and builder mafia has taken over in last elections Link. As the most influential of BJP, why did he not put honest candidates in the election. Can he prevent people like Gadkari flourishing in his own party?

We call BJP business friendly and a couple of days ago Mr. Modi made a remark in a rally in Ranchi that congress is responsible for underdevelopment in Jharkhand. Well most of the time Jharkhand had a BJP government and no industry came there because of high demand for bribes. The fact of the matter is, while Modi himself might be honest he can not change the existing system too much simply because BJP is itself involved in corruption as much as Congress is. There is a feeling that if Modi will come to power things will change drastically, that the country will start growing by 9%, that inflation will come down, bureaucracy will become efficient. I have my doubts if these things will happen. He can take some quick decisions which would benefit the economy but he can not bring transparency in the processes as his own peers would oppose that. He can not bring a fundamental change in the system because he himself is a product of it.

I was supporter of Modi as well but with scepticism and only because congress provides a hopeless alternative. In my opinion he has a typical RSS mindset and his secular credentials can easily be questioned. One of my Sikh friend said that she would never feel safe under the Modi government. But let us leave that aside. Modi to me comes out as just too self boating and an arrogant person. Here is a link of an interview with Karan Thappar Link. Just look at how he leaves the interview. Ramchandra Guha calls him a megalomaniac Link. My point is if we do not trust Kejrival, why are we trusting Modi for PM. He has not proved any credential as a national leader. (Here are some other essays by Mr. Guha on Mr. Modi and BJP Link Link)

Coming back to Kejrival. What excites me about him is not that he is talking of free water and electricity but that he is talking of an audit of the power companies (which has been ordered); that he is talking of taking on the water mafia (I am sure Modi would not have done that as BJP would benefiting out of the mafia). He talks of bringing transparency and public goods such as education, health and transport. While AAP can challenge the incumbent lobbyists, BJP can not because they are themselves involved in crony capitalism. The benefit with AAP is that they are fresh and are not rent seekers from the existing corrupt system the way BJP is. And Modi, I guarantee you can not check that. Where ever there is a leakage, both congress and BJP benefit out of it. Modi can not stop that but AAP can. Why did BJP under the leadership of Modi support such a weak Lokpal bill. They never talk of making CBI totally independent, only AAP does. Only AAP can bring about the drastic changes required today. And I am also hopeful that with people such as Meera Sanyal (CEO and chairperson of the Royal Bank of Scotland) joining them, they will follow a prudent economic and fiscal policy.

I will end the article by two quotes, one by Ram Guha and other by Mr. Kejrival.

“There is something of Indira Gandhi in Narendra Modi, and perhaps just a touch of Sanjay Gandhi too—as in the brash, bullying, hyper-masculine style, the suspicion (and occasional targeting) of Muslims. Either way, Mr Modi is conspicuously unfitted to be the reconciling, accomodating, plural, democratic Prime Minister that India needs and deserves. He loves power far too much. On the other hand, his presumed rival, Rahul Gandhi, shirks responsibility entirely (as in his reluctance, even now, to assume a Ministerial position). Indian democracy must, and shall in time, see off both.” - Ramchandra Guha

Once Kejrival was asked as to what he will do if he lost the Delhi elections, to which he replied, that it is not for him to think what he will but for people to think what they will do if AAP looses the election.

PS: Some links explaining crony capitalism in Coal scam and how both BJP and Congress are involved Link Link Link.

How online surveys get it wrong.

An online survey on NDTV shows a classic example of what we technically call the sample bias. Only rich, well off and english speaking people would have taken this survey. While the poor would also have voted for fighting corruption, many would not also have voted for public goods like water, schools and hospitals. Obviously the rich don't care about government schools and hospitals and they are more concerned with women safety. The survey thus reflects distorted demands.

An open letter to Mr. Arvind Kejriwal

 Dear Mr. Kejriwal,

I am great admirer of what AAP has done so far and what it is trying to do and as the head of the AAP, I offer you my heartiest congratulations. The challenge of cleaning the politics and public administration processes is daunting one and I feel that your decision to join politics to try to clean up the system from within was the right one. But it is also important to remember that while you give hope to the entire nation, your every step will be scrutinized and you will be required to meet the high standards that you have set for yourselves. Any mistake, or falling short on any of the promises you have made, will give an opportunity to both the cynics, as well as your opponents to downplay you. The trust you have gained can be lost easily.

Therefore as a concerned optimistic citizen, and as an economist I have certain suggestions for you. Very bluntly put, I feel that the claims you have made of providing electricity and water are a 'little' extravagant (I will explain the use of the word 'little' later in my letter). This concern has been voiced by many other experts as well. India is a country poor in resources simply because of a very large population, and therefore success of an economic policy should not be judged merely on the basis of what it delivers today but also on what it saves for future generations.

Let us take the example of water. Improving water supply to poor people living in slums of India is very important and I am confident that you will be able to achieve it. But I also think that providing 700 litres of water free of cost is a little too much. If we consider a household of 4 persons with each person using about 4 buckets (about 100 litres) of water per days, it makes it 400 litres per household. Thus one should start charging a modest amount after that and anything above say 800 or 1000 litres of consumption per day should be charged very high rates.

Regarding electricity bills, I think it will be very difficult to reduce the rates to half by the processes of auditing the companies, bringing transparency and others which you have mentioned in your manifesto. But it can be done for people using small amounts, with higher rates being charged to those who consume a lot. Thus there can be a cross subsidization of electricity. Reducing the electricity rates uniformly by half, as your manifesto suggests, makes no economic sense. So there has to be gradual increase in electricity rates with only the poor seeing a reduction of electricity prices by half while the middle and upper middle class seeing only a small reduction if at all. I like the part where your manifesto talks of improving the processes and making them more transparent. But people don't care about processes. They care about outcomes. One of your biggest challenge will be to convince the middle and upper middle class, which forms a big voter base for you and is hoping for a 50% reduction in their electricity bills, to accept only a marginal reduction in prices. It will also give your political opponents an opportunity to come at you.

More that anything else, I am looking forward to see how you improve the public services such as eduction, health and transport systems. There are many people and organizations, such as Pratham, who have done very good work in these field. You should try to hire people from these organizations to work for you. They will help you come up with out of the box practical solutions to the problems.

One of your agendas is to punish the corrupt politicians and bureaucrats. While they should be punished, please do not put it in your top few priorities. People do not care if a certain politician went to jail or not, but they care much more about their day to day problems. Governance and not punishing the corrupt should be your first priority.

I have another suggestion regarding the upcoming Lok Sabha elections. There could be many people who would vote for you but playing the kind of role at national level that you did in Delhi seems unlikely. You also have lesser time to raise funds and strengthen you base in other areas. So my suggestion would be that you should focus your energy mostly on governing Delhi right now and not fight on too many seats (at best 15-20 in and around Delhi). While you may win more seats if you contest election in more constituencies, there is danger that your efforts to provide better governance in Delhi could get diluted. You should fight elections only on as many seats as you can without compromising on your efforts to govern Delhi.

I wish you the very best for your future noble endeavours.