INDO-AMERICA RELATIONS

India Must Watch Obama’s SME Plan

Sep 06th, 2010

All eyes will be on US President Barack Obama this week as he promised to unfold a stimulus package that would give a fillip to employment after the US labour department released figures that showed that 54,000 people lost their jobs in August. The unemployment figures for August were 14.9 million jobless compared to 14.6 million in July. There was some comfort that the figures of those who lost their jobs was less than what was predicted by Wall Street (1,20,000), and that the private sector had created 67,000 jobs. The small and medium industries, it is reported, could? be the focus of Mr Obama’s new package. 

There is some scepticism about whether Mr Obama can really print more money to help the economy or the banks to support the SMEs that can create the jobs. He is also planning to do it through tax breaks and has pleaded with the Republicans not to block tax cuts for this sector. However, the bottom line is that the swathe of economic data emanating from the US and across the Western world shows that their economies are decisively weak.

The implications are not good news for India. The effect on India usually comes with a lag of a couple of months so by September-October inflows from foreign institutional investors (FIIs) could slow down and negatively impact the stock markets. This means it could be a dicey time for initial public offers waiting to come to the capital market. Many of them are public sector companies. Exporters, too, will struggle, at least till Christmas, as Indian exporters are still heavily dependent on the US and the West for their export markets. The other way of interpreting the economic data coming out of the US, which still remains the largest consumer market in the world, and the most dynamic as Mr Obama says, is that fear of double-digit recession has been overdone and that this fear is receding. So, while the road to recovery could be long and painful, the positive is that there will be no further decline.

In the context of President Obama’s move, it is a coincidence that in India the Union labour ministry has circulated a paper, according to our sister publication? Financial Chronicle, proposing that the government link bank credit to employment creation. It has proposed the creation of 58 million jobs in two years to meet the aspirations of 10 million educated youth that hit the employment market annually. Among the measures suggested are linking tax holidays, exemptions and duty rates to jobs, easy credit for job-intensive sectors with interest subvention, and facilitating finance to small and medium enterprises. This is a heartening development. But we have heard many of these suggestions routinely, particularly regarding finance for small and medium enterprises.

Seminar after seminar is held to discuss how funds can be transferred from banks to the SMEs, but till date it remains a Herculean task for SMEs to get funds from the banks. The ones who need it most are considered high risk. Bank credit to SMEs has come down to eight per cent from 12 per cent.

Interest subvention seems to be the only concrete suggestion that can be implemented. The government has tried it with the farmers and it has worked. If banks that give credit to SMEs can be given an interest subsidy, they can pass on some benefits to the sector and for the demographic dividend that everyone loves to talk about. To that extent it will be interesting to see what stimulus package President Obama provides for American SMEs because the governments of both countries are facing tremendous resistance to government subsidy for SMEs. While the US faces resistance from the Republicans, in India it is the banks that are resisting assistance to the SMEs, who are the backbone of exports and employment creation.

Source : http://www.asianage.com/editorial/india-must-watch-obama’s-sme-plan-577

The shame of misrule

By Kuldip Nayar Friday, 13 Aug, 2010

It is not an insignificant coincidence that a journalist reported, on the eve of Aug 15, that the Congress has “destroyed” all papers relating to our second independence in January 1977. If only history could be so easily rewritten. Imagine the first Mahatma Gandhi-led independence to usher in on Aug 15, 1947, a democratic polity, and imagine Mrs Indira Gandhi, his follower, destroying all democratic institutions by imposing the emergency some 28 years later on June 25, 1975. The nation celebrated a second independence when she was routed at the polls in January 1977. Typical of Congress’ furtive ways to cover up its misdeeds, the home ministry claims it does not have the emergency proclamation issued by then President Fakhruddin Ali Ahmed. Nor does it have any record of the decisions taken on the arrests of thousands on the basis of false allegations, the appointment of certain people to key posts and the manner in which the statutory provisions governing detentions were breached. This means that anyone aged 30 or younger will find it difficult to obtain any hard information about what happened during those dark days. Many of us remember the courage of Jayaprakash (JP) Narayan, who challenged Mrs Gandhi’s misrule, and the pain he suffered when he was subsequently imprisoned. M.G. Devasahayam, who was then district magistrate of Chandigarh where JP was detained, drew the authorities’ attention to JP’s deteriorating health. As Devasahayam writes in his book, the reply came from the then Defence Minister Bansi Lal, who basically said, ‘let him die’. I am surprised that there was no furore in parliament on the disclosure of the disappearance of the papers on the emergency. Neither Mulayam Singh nor Lalu Prasad Yadav, nor even the Bharatiya Janata Party leaders, raised the topic. The home ministry fixes responsibility for the missing records on the National Archives of India, saying that it is the “repository of non-current records”. The National Archives says that nothing was transferred to its safekeeping. Yet the Shah Commission, which dug into the misdeeds committed during the emergency, said on the last day of its proceedings that it was depositing all the records with the National Archives. The Shah Commission held 100 meetings, examined 48,000 papers and issued two interim reports. While the Janata government was still in power, I checked with the National Archives and was assured that the records of the commission’s verbatim proceedings were intact. Apparently, the destruction of evidence started after Mrs Gandhi’s return to power in 1980. Copies of the Shah Commission report disappeared even from the shop where official publications were available. The report by the National Police Commission, which made praiseworthy recommendations to free the force from the pressure of politicians, was shelved because it had been constituted by the Janata government. Mrs Gandhi walked out of a police medal distribution ceremony when her aide told her that the medals were for work in exposing excesses during the emergency. The Congress cannot rehabilitate Mrs Gandhi by hiding records of her misdeeds. It must face the fact of her authoritarian governance. She did great things and her fervour for nationalism allowed the country to hold its head high, but she also had her limitations. She was responsible for ousting morality from politics and effaced the thin line that separated good from bad, moral from immoral. We are still suffering from the hangover. With her extra-constitutional authority exercised by her son Sanjay Gandhi, she effectively smothered dissent and corroded India’s democratic values. It’s a pity that the press went out of its way to conform to the dictates of the government. L.K. Advani was quite right when he chided the press: “You were asked to bend but you began to crawl.” The reason why the system, which was derailed during the emergency, has not been able to return to its moorings so far is the unaccountability of bureaucrats and politicians. No one found guilty by the Shah Commission has been punished. In fact, those who indulged in excesses were given out-of-turn promotions and appointments to key posts. The rulers should heed the advice of the Shah Commission: “The government’s primary responsibility is to guarantee protection to those officials who refused to deviate from the code of conduct which should be accepted not only by the officials but also by the political authorities.” I am not surprised that Chief Information Commissioner Wajahat Habibullah has remained silent over the missing records. He is too close and beholden to the dynasty. Yet he has done laudable work in expanding the contours of the Right To Information Act. Mrs Gandhi did not even consult the cabinet before asking the president to sign the proclamation of emergency order. The cabinet was called the following morning to retrospectively endorse it. It’s understandable that the home ministry cannot explain this without blaming Mrs Gandhi personally. She even wanted to close down the courts but was assured that the judges would fall in line. The Supreme Court went to the extent of upholding five to one the imposition of the emergency. True, it is all history. But the Congress cannot rewrite it. The failings of the government and its leaders should never be fudged because the nation’s conscience is at stake. Coming generations should know how and where the country’s institutions were compromised and democracy derailed. It is only by laying the truth out in black and white that future emergencies and associated authoritarian rule can be avoided. And I hope the dawn of our second independence is never overtaken by the twilight made up of the brutalities and excesses that shame us. The writer is a senior journalist based in Delhi. Source : http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/columnists/19-kuldip-nayar-the-shame-of-misrule-380-hh-18

India’s Crisis Of Ethics

Aug 13th, 2010 - Shiv Visvanathan

I firmly believe one does not get old fashioned as one gets older. One gets more demanding of the new. One demands a sense of fundamentals without the facileness of fundamentalism. The world might shrink in terms of people who mattered yet memories become everlasting lemon drops to taste and treasure. Looking over the last few years what I sense most is the absence of an ethics which conveys a robust goodness and also understood the inventiveness of evil.

Consider the newspaper or TV as a landscape and ask where ethics come from and where are the ethical figures? It is definitely not in religion. Our gurus and acharyas preach well being, they might be ascetics and renouncers but they offer a religion separate from ethics. Take our corporate dons. Even the best, from Ratan Tata to Narayan Murthy, remain blasé about the violence of Gujarat riots, almost suggesting that investment is a substitute for ethics. Corporate life has a discipline which often simulates ethics. Sadly, our social movements have lost the edge that JP, Baba Amte, the early Medha Patakar provided them with. One can hardly think of ethicists in academic life.

If one moves from individuals to domains and searches for institutional frames or organisational sites, the search is equally futile. The bureaucracy has only an occasional whistleblower to redeem itself. The corporate world offers corporate social responsibility as a great dropping to legitimise its indifference to ecology, justice and moral indifference. Occasionally, non-governmental organisations bring sensitivity to issues but don’t dwell long enough to make a difference. Literature helps by producing a Mahasweta Devi and seems content with it.

Our world of politics brings forth a few Hamlets but the rest are content with a sense, a greed, an appetite for power which makes Right and Left brothers under the same carnal skin. The media offers stuttering pygmies as examples, but they are eventually brittle or hysterical, substituting an inquisitional style for a lived ethics. Eventually the examples we thrive on are the good father or the pious mother, a goodness that gets reduced to family recipes.
The question one wants to ask is why is there an absence of ethics in public spaces.

The first thing one senses is the absence of a civilizational view. There is no Bhakti Movement to rework ethics into law, music or politics. We use civilisation as a prop, a relic, or best as a heritage. It is a monument we salute but not a code, a model or a way of life. The nation state has corroded civilisational possibilities and consumerism has dessicated it further. The simple differences between need and greed as litmus tests have lost their relevance. Ethics as a home remedy becomes impotent in public life.

Earlier nationalism provided a framework of values through people like Gandhi, Gaffar Khan and Kumarappa. They walked their talk. But as nationalism yielded to the nation state, value frames got dessicated into policy frames.

Gradually, politics became managerial. By reifying corruption as a political or bureaucratic problem, we failed to realise the inventiveness of evil. In fact, if anything is global, it is the globalisation of evil that we fail to confront. Terror, genocide, societal indifference to violence or poverty is spreading. Consider how dessicated our id e as of peace, progress and rights are. Evil is not only more inventive, it possesses a more se d u c t i ve sense. We see goodness as ef­feminate, lacking the robustness of evil. In fact, we see viole n ce as the only way to fight evil, and thus becoming what we fight.

Thirdly, there is something about democracy that banalises ethics. Ethics get managerialised, banalised or become a collection of regulations. It becomes a rote procedure rather than a set of individual initiatives. It is reduced to a set of do’s and don’ts and as a result it lacks inventiveness. An ethical act, rather than being the norm is seen as a signal for deviancy. Ethics becomes a singular act of whistle blowing where the ethical act is seen as rare, even eccentric and vulnerable.

Fourthly, we are caught in a dualistic economy of thought which separates the ethics of science from the ethics of religion, the ethics of the formal and the informal, the domains of public and private, the ethics for male and female. Oddly, where we need specialised thinking as in the ethics of scale or the ethics of risk technology, we assume stupidly that conventional science or economics has the answer. We assume that ethics is a symptom that surfaces in crises, disallowing a prosaic ethic of everydayness.

As a result, India as a civilisation, as a nation state, as a civil society, as a community, has few answers about development, displacement, diversity, alternatives, terror, poverty or torture. The poverty of our ethics is more stunning than the poverty of our society. Maybe the two are connected and we need to invent a different ethics of technology, development, poverty and ecology, if India is to remain a viable democracy.

Let us be clear that the old words stemming from Christianity like philanthropy, aid, charity have run dry. We need other words and metaphors to answer questions like what are our ethics regarding poverty? Do we criminalise it or pathologise it or do we treat it as a threat to peace, a form of structural disempowerment? What new thought experiments and institutions can we invent that goes beyond the commoditisation of the environment that sees climate change through carbon credits? What is the ethics of the other that can make citizenship more tolerant of tribals and nomads? What is a civilisational ethic that resists the economisation of a problem or the forced obsolescence of a people? Can we devise a new Hippocratic code for the ethical illiteracy of science? Our ethics need not be fundamentalist but it needs to be a way of life, a dwelling, not an abstract paradigm or a dessicated flower lacking the life blood of water, nor does it have to be humorless wardenship of Gandhi?

We need to invent, create new forms of response to fill in our current silence about Afghanistan, Sri Lanka or the idiocy of our development or the emptiness of our ideas of science, agriculture or governance. The 63rd anniversary of our Independence should provoke some concern about such issues.

Shiv Visvanathan is a social scientist

Source : http://www.asianage.com/columnists/india’s-crisis-ethics-599

Outsourcing to India Draws Western Lawyers

By HEATHER TIMMONS

NOIDA, India — As an assistant attorney general for New York State, Christopher Wheeler used to spend most of his time arguing in courtrooms in New York City.

Today, he works in a sprawling, unfinished planned suburb of New Delhi, where office buildings are sprouting from empty lots and dirt roads are fringed with fresh juice stalls and construction rubble. At Pangea3, a legal outsourcing firm, Mr. Wheeler manages a team of 110 Indian lawyers who do the grunt work traditionally assigned to young lawyers in the United States — at a fraction of the cost.

India’s legal outsourcing industry has grown in recent years from an experimental endeavor to a small but mainstream part of the global business of law. Cash-conscious Wall Street banks, mining giants, insurance firms and industrial conglomerates are hiring lawyers in India for document review, due diligence, contract management and more.

Now, to win new clients and take on more sophisticated work, legal outsourcing firms in India are actively recruiting experienced lawyers from the West. And American and British lawyers — who might once have turned up their noses at the idea of moving to India, or harbored an outright hostility to outsourcing legal work in principle — are re-evaluating the sector.

The number of legal outsourcing companies in India has mushroomed to more than 140 at the end of 2009, from 40 in 2005, according to Valuenotes, a consulting firm in Pune, India. Revenue at India’s legal outsourcing firms is expected to grow to $440 million this year, up 38 percent from 2008, and should surpass $1 billion by 2014, Valuenotes estimates.

“This is not a blip, this is a big historical movement,” said David B. Wilkins, director of Harvard Law School’s program on the legal profession. “There is an increasing pressure by clients to reduce costs and increase efficiency,” he added, and with companies already familiar with outsourcing tasks like information technology work to India, legal services is a natural next step.

So far, the number of Western lawyers moving to outsourcing companies could be called more of a trickle than a flood. But that may change, as more business flows out of traditional law firms and into India. Compensation for top managers at legal outsourcing firms is competitive with salaries at midsize law firms outside of major metropolitan areas of the United States, executives in the industry say. Living costs are much lower in India, and often, there is the added allure of stock in the outsourcing company.

Right now, Pangea3 is “getting more résumés from United States lawyers than we know what to do with,” said Greg McPolin, managing director of the company’s litigation services group, who divides his time between India and New York.

Outsourcing remains a highly contentious issue in the West, particularly as law firms have been trimming their staffs and curtailing hiring plans. But Western lawyers who have joined outsourcing firms are unapologetic about the shift to India.

Leah Cooper left her job as managing lawyer for the giant mining company Rio Tinto in February to become director of legal outsourcing for CPA Global, a contract legal services company with offices in Europe, the United States and India. Before hiring Ms. Cooper, CPA Global added lawyers from Bank of America and Alliance & Leicester, a British bank. The company has more than 1,500 lawyers now, and Ms. Cooper said she planned to hire hundreds in India in the next 12 months.

At Rio Tinto, Ms. Cooper said, she became a champion of the idea of moving work like document review to a legal outsourcing company “because it works really well.”

“It really is the future of legal services,” said Ms. Cooper, an American based in London who travels regularly to India and has spoken widely in promoting outsourcing. Still, she acknowledges hostility toward the practice. “When I was doing public speaking, people used to joke that I had better check under my car” for something planted by a junior associate angered by her views, she said.

Many legal outsourcing firms have offices around the world to interact with clients, but keep the majority of their employees in India; some also have a stable of lawyers in the Philippines. Thanks to India’s low wages and costs and a big pool of young, English-speaking lawyers, outsourcing firms charge from one-tenth to one-third what a Western law firm bills an hour.

Employees at legal outsourcing companies in India are not allowed by Indian law to give legal advice to clients in the West, no matter their qualifications. Instead, legal outsourcing companies perform a lot of the functions that a junior lawyer might do in a American law firm.

Even global law firms like Clifford Chance, which is based in London, are embracing the concept.

“I think the toothpaste is out of the tube,” said Mark Ford, director of the firm’s Knowledge Center, an office south of New Delhi with 30 Indian law school graduates who serve Clifford Chance’s global offices. Mr. Ford lived in India for six months to set up the center, and now manages it from London.

“We as an industry have shown that a lot of basic legal support work can successfully be done offshore very cost-effectively with no quality problems,” Mr. Ford said. “Why on earth would clients accept things going back?”

Many corporations agree that outsourcing legal work, in some form or another, is here to stay.

“We will continue to go to big firms for the lawyers they have who are experts in subject matter, world-class thought leaders and the best litigators and regulatory lawyers around the world — and we will pay a lot of money for those lawyers,” said Janine Dascenzo, associate general counsel at General Electric.

What G.E. does not need, though, is the “army of associates around them,” Ms. Dascenzo said. “You don’t need a $500-an-hour associate to do things like document review and basic due diligence,” she said.

Western lawyers making the leap to legal outsourcing companies come for a variety of reasons, but nearly universally, they say they stay for the opportunities to build a business and manage people.

“In many respects it is more rewarding than jobs I had in the United States,” said Mr. Wheeler, who moved to India when his Indian-born wife took a job here in 2006.

“If you’re talking about 15 employees in a windowless basement office, I’m not interested in making that my life’s calling,” he recalled thinking when he started talking to Pangea3. “But building a 500-person office, now that is a real challenge.”

Shelly Dalrymple left her job as a partner at a firm in Tulsa, Okla., in 2007 and is now based in India as the senior vice president of global litigation services at UnitedLex, a legal outsourcing company with offices in the United States, Britain, Israel and India.

When she first joined the industry, she said, growth was being driven by corporations that were pushing law firms to outsource to save money. Now, Western law firms themselves are starting to embrace the industry, she said. “We are seeing law firms who are putting a lot of thought into their future coming to us with interesting and creative ideas,” she said.

Partners in the West are asking legal outsourcing companies in India to create dedicated teams of lawyers for their firms, for example. Those teams could expand and contract depending on how much business the Western firm has. “That means a law firm with 500 members in Chicago can compete with a 2,000-member firm in New York,” Ms. Dalrymple said.

Moving to a legal outsourcing firm, especially in India, is not for everyone. About 5 percent of Western transplants cannot handle it and move back home, managers estimate.

Some find it hard to adapt to India. Other times, the job itself does not suit them — after spending years working nearly independently as a litigator, for example, it can be hard to transition to managing and inspiring a team of young foreign lawyers.

Even lawyers who stay are sometimes wistful about their previous careers. “Of course I miss litigation,” Mr. Wheeler said. But, he added, “watching people learn some of the same skills I did is gratifying.” 

Source : http://www.nytimes.com/2010/08/05/business/global/05legal.html?ref=general&src=me&pagewanted=print