But How Do You Hide the Dead…

The idea for this piece came from a May 13 tweet by G Raghuram. In this tweet Raghuram talked about the Goodhart’s law in the context of the way Covid numbers are being reported.

In a 1975 article, the British economist Charles Goodhart had stated: “Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” This came to be known as the Goodhart’s law. Of course, like many other laws in economics, the Goodhart’s law has also not been stated in simple English.

As Carl T Bergstrom and Jevin D West write in Calling Bullshit—The Art of Scepticism in a Data-Driven World: “While Goodhart’s original formulation is a bit opaque, anthropologist Marilyn Strathern rephrased it clearly and concisely: When a measure becomes a target, it ceases to be a good measure.”

As Bergstrom and West further explain: “If sufficient rewards are attached to some measure, people will find ways to increase their scores one way or another, and in doing so will undercut the value of the measure for assessing what it was originally designed to assess.”

Examples of this phenomenon can be seen across different facets of life. A business school I used to work for had started dozens of journals and magazines, without much quality control, to drive up its rankings and it briefly did succeed. This was because business school rankings gave some weightage to research carried out by the faculty of a business school and by having its own magazines and journals, it was easier to publish. This helped in driving up the ranking. 

Now what does the Goodhart’s law have to do with the covid pandemic? As the covid pandemic struck and spread, different measures have been used to get an idea of its strength (for the lack of a better term). These include daily increase in covid cases, the total number of tests carried out in a district and a state, the total number of covid deaths, etc.

As per Goodhart’s law, these different measures have become targets. And that has led to different state governments  trying to game these measures, in order to make themselves look good and tell the world at large that they have the covid pandemic under control.

Before I get into data and news reports, let me explain this through a very simple example. For a while, the daily increase in the number of covid cases in Nagpur in Maharashtra was much more than the increase in the entire state of Madhya Pradesh.

Anyone who knows Indian geography would know that Nagpur is right on the border that Maharashtra shares with Madhya Pradesh. It is not an island. People can move between the states. This anomaly wasn’t really explainable unless one looked at the Madhya Pradesh numbers from the lens of the Goodhart’s law.

One parameter that has been managed (or should I say fudged) by different states is the number of people dying of covid. The idea as I explained earlier is to tell the world at large that they have the situation under control. The trouble is that the governments may be able to manage the data, but they can’t always hide the dead bodies.

Crematoriums across the country have been working overtime. Public health expert Ashish Jha, offered a straightforward argument in a Twitter thread on May 9. As he wrote: “During [the] non-pandemic year 2019, about 27,000 Indians died on [a] typical day. Crematoriums handle that level of deaths every day. Additional 4,000 deaths won’t knock them off their feet. Crematoriums across the country [are] reporting 2-4X normal business.”

He further writes: “So best estimate [of] 55,000 to 80,000 people dying daily in India, If you assume baseline deaths of 25,000-30,000, Covid [is] likely causing additional 25,000 to 50,000 deaths daily, not 4,000.” As Anirban Mahapatra writes in Covid-19 – Separating Fact from Fiction: “During the pandemic many of these excess deaths are due to COVID-19.”

Many journalists and newspapers have found ways of going beyond the official numbers. Let’s take the case of Gujarat. The Divya Bhaskar newspaper has reported that the state has issued 1.23 lakh death certificates between March 1 and May 10 this year. It had issued around 58,000 death certificates during the same period last year. So, the number of deaths has more than doubled this year. As per Gujarat government’s data only 4,218 deaths happened due to covid during the period. This suggests massive underreporting. The Gujarat government has called this report inaccurate.

It would be unfair to suggest that this trend of underreporting covid deaths is prevalent only in Gujarat. An April 15 report on NDTV, during the early days of the second wave, said that for Lucknow, the “cumulative official covid death count released by the government in the last seven days is 124.” Nevertheless, as “per the records maintained by the city’s crematoriums, over 400 people who died because of the virus had been cremated,” during the period. The government explained away this difference by saying that those dying in neighbouring districts and states were also being cremated in the city.

A similar thing happened in Bhopal as well. Over a period of 13 days in April, the official covid death count stood at 41. Nevertheless, a survey carried out by The New York Times of the main covid-19 cremation and burial grounds in the city, revealed that more than 1,000 deaths had been handled under strict protocols. There was a similar newsreport on Kanpur as well.  

In fact, the Financial Times, collected news reports across seven districts and found that the number of covid victims who had been cremated are ten times larger than the official covid numbers in the same districts. (Click on the above link to look at the graph).

Of course, other than such news stories, there have been a spate of photographs and videos lately, showing bodies washing up and then later buried on the shores of the Ganga river, flowing through Uttar Pradesh and Bihar. A Dainik Bhaskar news report puts the number at more than 2,000 bodies, with Kanpur, Unnao, Ghazipur and Ballia being worst hit. (Those who can read Hindi, I suggest please read this report).  

Journalists have also been counting paid obituaries being published in newspapers, again suggesting a huge difference between the reported numbers and the actual state of things.

As Bhramar Mukherjee, an epidemiologist at the University of Michigan told the New York Times: “It’s a complete massacre of data… From all the modeling we’ve done, we believe the true number of deaths is two to five times what is being reported.”

As per the Institute for Health Metrics and Evaluation, which is based in Seattle, United States, the total covid deaths in India as of May 6, stood at 6.54 lakh, around three times the official figure.

There are several ways in which the undercounting happens. In Uttar Pradesh, in order to get admitted into a hospital, the patient required a reference letter from the Chief Medical Officer “who heads the Integrated Command and Control Centres set up by the government in all districts”. Due to this rule, patients were turned away from hospitals. And if such a patient died he or she wouldn’t be counted in the covid deaths.

A medical officer in Krishnagiri in Tamil Nadu told The Hindu: “We have been told orally in the meeting that only deaths within 10 days of admissions will be taken as covid-19 deaths.” MK Stalin, the new Tamil Nadu chief minister, has asked the state government officers not to fudge data.

The number of deaths also depends on how the counting is carried out. Take the case of West Bengal, where in May 2020, the “official’ coronavirus death toll… doubled in the five days since the state virtually shelved its Covid-19 death audit committee.”

Then there are cases where an individual dying of covid had not tested positive (hence, it was a case of a false negative). There are examples of such cases not being counted as well.

There are also cases of covid deaths being attributed to other health complications that individuals had when they got infected by the virus. These include diabetes, hypertension, cancer etc., which increase the risk of severe covid.  

A news report on BMJ.com published in July 2020, pointed out that in Vadodra “death audit committees attributed nearly 75% of deaths in covid-19 positive cases to other causes such as complications from diabetes or following organ transplants.”  All this is happening against the prevailing guidelines of the Indian Council of Medical Research.

People who die outside hospitals or on their way to one, aren’t counted in the covid deaths. Two thirds of registered deaths in India happen at home. In all around 86% of deaths in India are registered.

Even here there is a great deal of variation across states. In Bihar and Uttar Pradesh, only 34.6% and 60.8% of the deaths, respectively, are registered. As the disease spreads across rural Bihar and rural Uttar Pradesh, massive undercounting of both active covid cases and deaths, is happening.

The reluctance of politicians notwithstanding, the system itself is not geared up to count the dead, from covid or otherwise, in these states.

The biggest evidence of undercounting comes from the fact that the Prime Minister Narendra Modi recently said that the “states should be encouraged to report their numbers transparently without any pressure of high numbers showing adversely on their efforts”.

There are several reasons why the governments need to count the number of people dying because of covid, correctly.

First and foremost, people have a right to know what is happening in the country. It tells us clearly how the disease is progressing  and helps us prepare accordingly, mentally, physically and financially.

Second, as I have often said in the past, if we don’t recognise a problem how do we work towards solving and/or containing it. With regard to this, Bhupinder Singh Hooda, a former chief minister of Haryana, made an important point in a recent column in The Indian Express, where he said:

“The Union government is allocating oxygen on the basis of the severity of the second wave in the state. If the state government underreports the numbers or fudges the data, it will harm, rather than help, the state as it will get a lower allocation of oxygen and more deaths will follow.”

Third, counting covid death numbers as accurately as possible is important for the overall health security of the world. No herd immunity can be achieved if the disease keeps spreading across India.

Fourth, the correct data helps epidemiologists run their models properly and then make projections that should help policy.

It also needs to be said here that historically during a pandemic, data is not always accurately collected. As  Chinmay Tumbe writes in Age Of Pandemics (1817-1920):

“Death figures are collected on the basis of ‘registration’, which is a process that usually breaks down in a period of crisis, as observed by the health officials of those times. It leads to serious underestimation of the number of deaths, especially in poorer countries with weak data collection systems. In India, the Census of 1921 noted that due to ‘the complete breakdown of the reporting staff, the registration of vital statistics was in many cases suspended during the progress of the epidemic in 1918’.”

The mortality statistics of those who died in the pandemic that happened between 1918 and 1921, have been updated through various studies over the years.

Having said that, when it comes to data and data collection, things have improved by leaps and bounds over the last 100 years. Hence, even with the pandemic being on, data collection and management, needs to be carried out in a much better way.

Of course, all this is lost on a central government, which is primarily interested in narrative management. It is currently busy spreading the narrative that it had warned the states of a second wave.

But then it did nothing about it… Didn’t order enough vaccines… Didn’t make sure that there was enough stock of oxygen… Exported the vaccines being produced… Continued with the kumbh mela and the elections, both big super spreader events… And also told the world that India had managed to defeat covid.

In between all this we were also asked to bang utensils and eat dark chocolate. 

Was Haryana CM Hooda, Robert Vadra’s political stooge?

Vadra3 (1) 
Vivek Kaul 
Crony capitalism has been alive and kicking in India for a very long time.
One of the original crony capitalists in this country was Sanjay Gandhi, son of the then Prime Minister Indira Gandhi. Sanjay was a Doon school drop-out and had apprenticed as a motor mechanic at Rolls Royce in Great Britain in the 1960s.
He wanted to build a low priced people’s car called Maruti. His mother was the Prime Minister of the country and her colleagues in the government and the Congress party went out of their way to fulfil Sanjay’s dream.
In November 1970, a letter of intent was handed over to Sanjay Gandhi by Dinesh Singh, the then minister for industries. As Vinod Mehta writes in The Sanjay Story “The letter of intent was granted ‘on the basis of a paper proposal with no tenders called for and no impartial study’ for the mass production of 50,000 ‘low-priced’ cars per year made entirely of indigenous materials. In short, Maruti was licensed to match the total output of the other three domestic car manufacturers.”
But just a letter of intent wasn’t enough to get the project going. Land was needed to build the factory where cars would be manufactured and before that money was needed to buy that land. In stepped Bansi Lal, the chief minister of Haryana. “To his credit it must be said that Bansi Lal was the first to spot Sanjay Gandhi as a man of the future, as a man to hitch your bandwagon to,” writes Mehta.
Bansi Lal offered land to Sanjay Gandhi for the Maruti factory and at the same time gave him a loan to buy that land. As Kuldip Nayar writes in Emergency Retold about Bansi Lal “He was unscrupulous; means never mattered to him, only ends did. From being a briefless lawyer he had risen to be chief minister in less than a decade, and he wanted to go still higher. It was he who gave Sanjay, a 290 acre plot for the Maruti factory at a throwaway price along with a government loan to cover the amount.”
Despite all the help from Bansi Lal and the union government, Sanjay Gandhi’s people’s car never got going till he was alive. Production started only when Japanese car manufacturer Suzuki was roped in after Sanjay’s death in 1980.
Something similar has played out in Haryana where the current chief minister Bhupinder Singh Hooda seems to have gone out of his way to help Robert Vadra, the son-in-law of Sonia Gandhi, the chairperson of the United Progressive Alliance (UPA).
The IAS officer Ashok Khema brings out this nexus in a 105 page reply to the report of the committee constituted by the Haryana state government (dated October 19, 2012) to inquire into the issues raised by Khemka when he was the director general of land records.
This is how the story goes. Sky Light Hospitality Private Ltd bought 3.531 acres (or 5 bighas 12 biswas) of land from Onkareshwar Properties Private Ltd for a consideration of Rs 7.5 crore. This sale was registered on February 12, 2008.
Publicly available data on the MCA 21 portal of Ministry of Corporate Affairs, shows that Sky Light Hospitality is a company that was incorporated on November 1, 2007. As on March 31, 2008, the company had a paid up share capital of Rs 1 lakh. Upto September 30, 2011, its total paid up share capital was Rs 5 lakh. Robert Vadra owned 99.8% of the company and the remaining 0.2% was owned by his mother Maureen.
The company selling the land i.e. Onkareshwar Properties was incorporated as a company on September, 28, 2004. Its paid up capital as on September 30, 2011, stood at Rs 25 lakh. Of this 98% was owned by one Satyanand Yajee and the balance 2% by Godavari Yajee.
Paid up capital is the total amount of the company’s capital that is funded by its shareholders.
Various media reports have clearly established the link between Yajee and Hooda. A report published in The Economic Times today points out that “Satyanand Yajee, director of Onkareshwar Properties, which sold 3.5 acre in Shikohpur village to Vadra’s Skylight Properties, is general secretary of the All India Freedom Fighters Organisation(AIFFO) and is in charge of constructing and maintaining a memorial in the name of Hooda’s father Chaudhary Ranbir Singh in Rohtak.”
A report published in the Business Standard in October 2012, goes into even greater detail about the relationship between Hooda and Yajee. It points out the strong ties that Hooda has with the All India Freedom Fighters Organisation i.e. AIFFO. “Haryana Chief Minister Bhupinder Singh Hooda, too, has strong ties to this organisation. Before his death in 2009, Ranbir Singh, Hooda’s father, was working president of AIFFO. And, Hooda is a founder-member and working president of AIFFO’s sister body, All India Freedom Fighters’ Successors’ Organisation(AIFFSO), according to his profile in the Haryana Vidhan Sabha website.”
The report also mentions that AIFFO had spent lakhs of rupees in full page advertisements which praised Ranbir Singh’s contribution to the freedom struggle. As mentioned earlier Ranbir Singh was Hooda’s father.
Of course, just because Hooda and Yajee share a relationship does not mean that Yajee could not have sold land to Vadra.
So let’s get back to the land deal between Yajee and Vadra. Yajee’s Onkareshwar Properties sold 3.531 acres of land to Vadra’s Sky Light Hospitality. The price of the land was worth Rs 7.5 crore and over above this there was a stamp duty cost of Rs 45 lakh, for registering the sale.
As per Khemka’s reply, Vadra’s Sky Light Hospitality issued cheque number 607251 of Corporation Bank on February 9, 2008, to pay Yajee.
The question is how did Vadra’s Sky Light Hospitaliy with a paid up capital of just Rs 1 lakh(as on March 31, 2008) manage to pay an amount of Rs 7.5 crore for the land and Rs 45 lakh as stamp duty?
The answer lies in the fact that Sky Light Hospitality’s balance sheet as on March 31, 2008, shows a book overdraft of Rs 7.944 crore. This is almost equal to the amount of Rs 7.5 crore that needed to paid for the land, plus the Rs 45 lakh that needed to be paid as stamp duty for registering the sale.
What this basically means is that even though Sky Light Hospitality issued a cheque to Onkareshwar Properties, but the latter never got around to encashing it. As a report in the Business Standard dated October 16, 2012 points out “A book overdraft is not an overdraft at a bank but an excess of outstanding cheques on a company’s books over its reported bank balance.”
The notes to the account of Sky Light Hospitality also mention the same. “The overdraft shown in Corporation Bank account is book overdraft due to cheque issued before balance sheet date but not presented up to balance date, which is cleared after balance sheet date,” it is stated in serial no. 6 of the Notes To Accounts.
This can be confirmed from the balance sheet of Onkareshwar Properties as well. “Onkareshwar’s balance sheet as on March 31, 2008, showed an entry of Rs 7.95 crore under ‘sundry debtors’. This corresponds to the entry of Rs 7.944 crore book overdraft entered in Sky Light’s books. The land price was Rs 7.5 crore, and the balance Rs 45 lakh could have been registration and stamp duty costs. It appears Onkareshwar happily footed even these costs,” a report in the Business Standard dated Ocotber 27, 2012 points out.
So not only did Yajee’s Onkareshwar Properties not encash the cheque (it would have bounced if it tried to do so), it also happily paid the Rs 45 lakh stamp duty that needed to be paid to register the transaction.
The question of course is that if money did not change hands can the sale of the land to Vadra’s Sky Light Hospitality by Onkareshwar Properties be considered as a sale at all? This is something that Khemka points out in his reply. “If there was no payment as alleged in the registered deed, can it be said that the registered deed No. 4928 dated 12.02.2008 conferred ownership title over the said land upon M/s Sky Light Hospitality by virtue of the sham sale? Section 54 of The Transfer of Property Act, 1882 defines “sale” as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. There was no promise to pay in the future in the registered deed. No price was paid as claimed in the registered deed No. 4928 dated 12.2.2008. The “sale” registered in the said deed cannot, therefore, be called a “sale” in the true sense of the term, legal or moral, and it cannot be said that M/s Sky Light Hospitality became owner of the land in question by virtue of the “sale.””
On March 28, 2008, department of town and country planning of the Haryana government issued a letter of intent to Vadra’s Sky Light Hospitality for grant of commercial colony license for 2.701 acres out of the total area of 3.53 acres. This was done within a mere 18 days of application, writes Khemka.
He further points out that “Sub-section (2) of section 3 of the Act of 1975 mandates that an enquiry will be conducted by the Director of Town & Country Planning, particularly with respect to the title to the land and the capacity of the owner-applicant to develop a colony.”
The phrase to mark here is the capacity of the owner-applicant to develop a colony. In order to check this capacity the owner-applicant (in this case Vadra’s Sky Light Hospitality), under Rule 3 of The Haryana Development and Regulation of Urban Areas Rules, 1976, needs to furnish among other things, particulars of experience as colonizer and particulars about financial position as to determine the capacity to develop the colony, Khemka points out.
So what experience did Sky Light Hospitality have in developing colonies? If one looks at the memorandum of association of the company, stamped by the Delhi government as on October 27, 2007, the main objects to be pursued by the company on incorporation were as follows:
skylight


So this makes it very clear that building colonies was not among the main objects of Vadra’s Sky Light Hospitality, when it was incorporated. As the Memorandum of Association clearly shows the main object of the company was to be in hospitality business, as was suggested by its name.
Nevertheless that did not mean that the company could not build colonies. Just that it did not have any previous experience in doing so.
As far as the financials of the company go, as I have previously pointed out as on March 31, 2008, the paid-up capital of the company was Rs 1 lakh. The company did not earn any income upto March 31, 2008. It had an expenditure of Rs 43,380 which was met through borrowed money. Hence, the company really did not have any capacity to build a colony.
As Khemka puts it “The “capacity” of the applicant-Company was nothing else other than Mr. Robert Vadra. The man became the measure of everything and the entire statutory apparatus a castle of sand.”
Once Vadra’s Sky Light Hospitality got the letter of intent from the Haryana government for a commercial colony license on 2.701 acres out of total 3.53 acres of land, things got even more interesting. Vadra’s Sky Light Hospitality now had the land title as well as the letter of intent for grant of colony license in its possession. This made it possible for it, to enter into a collaboration agreement with with M/s DLF Retail Developers, on August 5, 2008.
After this Sky Light Hospitality received a huge amount of advance or interest free loan from DLF. The balance sheet of the company as on March 31, 2009, clearly points out entries of Rs 15 crore and Rs 10 crore as advances received from DLF.
And this money paid by DLF was finally used to clear the dues of Onkareshwar Properties. As Khemka points out “this funding from the DLF Group was used to clear the dues of Rs 7.95 crores, i.e., Rs7.5 crores towards cost of land plus Rs 45 lakhs towards stamp duty, to M/s Onkareshwar Properties, the vendor-company in registered deed No. 4928 dated 12.02.2008.”
This is how the transaction was completed. This could not have happened without the Haryana state government granting a commercial colony license within 18 days of application to Vadra’s Sky Light Hospitality, which had no previous experience of developing a colony. The license was renewed on 18th January, 2011 for a further period of two years up to December 14, 2012, Khemka points out.
Vadra’s Sky Light sold off the 3.53 acres of land to DLF for Rs 58 crore on August 18, 2012.
In doing this Bhupinder Singh Hooda turned out to be Robert Vadra’s Bansi Lal. The moral of the story is that behind every successful crony capitalist there is a successful politician.

The article originally appeared on www.firstpost.com on August 13, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)

Five questions govt needs to answer on food security

 sonia-maino-la-fidanzata-italiana-di-rajiv-gandhi-29-gennaio-1968-ap2Vivek Kaul 
Sonia Gandhi wants the chief ministers of fourteen states in which the Congress party is in power to role out the food security scheme in letter and spirit, and in quick time. Some media reports suggest that the scheme will be rolled out on August 20, which also happens to be the birth anniversary of Sonia’s late husband Rajiv.
While there seems to be a great hurry to launch the scheme there are some basic questions that the government needs to answer.

a) It has been pointed out time and again that the right to food security is likely to benefit 82 crore Indians. It seeks to cover 50% of the urban population and 75% of the rural population. The trouble is that no clear eligibility criteria for identifying the intended beneficiaries has been specified. It has been left to the state governments. As Jean Drèze wrote in a recent column in the Business Standard “For instance, the identification of eligible households is left to the discretion of the government. In the absence of clear eligibility criteria, no one is really entitled to anything as a matter of right; this defeats the law’s purpose.”
So the question is how will be the intended beneficiaries be identified.? The lack of a mechanism already seems to be causing problems. A report in the Daily News and Analysis points out that a presentation being made Sheila Dikshit, the chief minister of Delhi, was cut short by food minister KV Thomas. As the report points out “Dikshit’s presentation was cut short by food minister, when she mentioned that 32  lakh beneficiaries of existing schemes would be covered by the food security ordinance. She was reminded that in Delhi 72 lakh people are estimated to gain from the food security scheme. She had mentioned that Delhi had 2.62 lakh BPL card holders and 2.21 lakh are in the rehabilitation colonies and other 40,500 are in slums. Even these figures made just 26 lakh persons. Delhi CM then added another 10 lakh beneficiaries covered under the Antyodaya Ann Yojana and Anna Shri Yojana. She was told to undertake a fresh survey and draw the list of beneficiaries.”
Haryana Chief Minister Bhupinder Singh Hooda was in a similar situation. “Similarly, Hooda also come out with a figure of just 39 lakh beneficiaries.  He was also told that as per the population of his state, he needs to draw a list of not less than 1.69 crore,” the DNA reports.
So the calculations of the Delhi chief minister tell her that there should be 36 lakh beneficiaries(26 lakh + 10 lakh beneficiaries under the Antyodaya Ann Yojana and Anna Shri Yojana) of the food security scheme in Delhi. The food minister feels that there are 72 lakh estimated beneficiaries. Dixit has been asked to do a fresh survey and draw up a list of beneficiaries. The gap of 36 lakh (72 lakh minus 36 lakh) need to be filled.
Hooda needs to fill in an even bigger gap of 1.3 crore (1.69 crore minus 39 lakh). Both Hooda and Dixit want to launch the scheme on August 20, which is a little over a month away. How are so many people going to be identified in such a short period of time? And the bigger question is why has no method for identification of intended beneficiaries be prescribed? Sheila Dikshit plans to distribute food security cards to those eligible for the scheme. 

b)What is the food security scheme going to cost every year? The finance minister P Chidambaram in the budget speech he made earlier this year said “I have set apart Rs 10,000 crore, over and above the normal provision for food subsidy, towards the incremental cost that is likely under the Act.” The total food subsidy in the government budget for 2013-2014(i.e. The period between April 1, 2013 and March 31, 2014) is set at Rs90,000 crore. Chidambaram’s estimate will be lower for this year simply because the scheme will be launched in large parts of the country only during the second half of the year.
Economist Surjit S Bhalla writing in a column in The Indian Express puts the cost of the food security scheme at Rs 3,14, 000 crore. Bhalla’s calculations are fairly simple and straightforward to understand and put across the likely cost of the scheme more than clearly.
The Commission for Agricultural Costs and Prices of the Ministry of Agriculture in a research paper titled 
National Food Security Bill – Challenges and Options puts the cost of the food security scheme over a three year period to Rs 6,82,163 crore. During the first year the cost to the government has been estimated at Rs 2,41,263 crore. Andy Mukherjee, a columnist for the Reuters, puts the total cost of food security at $25 billion or Rs 1,50,000 crore (assuming $1 equals Rs 60).
And if all these numbers aren’t enough there is the original estimate of Rs 27,000 crore when the idea of the Right to Food Security was first mooted in the National Food Security Bill tabled in the Parliament in December 2011. As Jean Drèze and Amartya Sen write in 
An Uncertain Glory – India and Its Contradictions “The additional resources required to implement the Bill were officially estimated, at that time, at Rs 27,000 crores per year.”
So how much is the food security scheme eventually going to cost the government and in turn the taxpayers? The estimates as one can see vary anywhere from Rs 27,000 crore to Rs3,14,000 crore. Can the government at least provide us a clear estimate of that? Or would that even be possible for the government to do, given that it has specified no method to identify the intended beneficiaries. Hence, it has no idea of how many people it will eventually end up covering under the scheme. So how does it calculate the cost? 

c) The food security scheme aims to provide subsidised wheat and rice to nearly 82 crore people. In order to procure the required rice and wheat the government already has an elaborate procurement system in place. It uses the Food Corporation of India and various other state agencies to buy rice and wheat directly from the farmers. The rice and wheat thus bought will be later sold at a subsidised price by the government.
What does the government plan to do in bad years when the production and/or procurement of rice and wheat are hit? In the current year the procurement of wheat by the government has declined by 33 per cent to 25.08 million tonnes. This has been attributed to aggressive buying by private traders. As of now this is not a reason for worry for the government primarily because of the excess wheat that it had bought during the previous years.
But what happens in a year during which production of rice or wheat is hit. As the CACP research paper cited earlier points out “With 60 percent of India’s farmland dependent on monsoon rains, drought years can slash production and force the country to import large quantities. The government already procures one-third of the cereals production and any increase in procurement will have enormous ramifications on the cereal economy/markets and would crowd out private sector operations with a consequent effect on open market prices.”
The government has the option of importing grains. But that is easier said than done, specially in case of rice. “Rice is a very thinly traded commodity, with only about 7 per cent of world production being traded and five countries cornering three-fourths of the rice exports. The thinness and concentration of world rice markets imply that changes in production or consumption in major rice-trading countries have an amplified effect on world prices,” the CACP paper points out.
Andy Mukherjee of the Reuters explained the consequences of what would happen during a year of bad harvest, a lot more clearly, in a recent column. “When the domestic Indian crop is insufficient, the programme may destabilize a thin global rice market…Once the bulk of Indian consumption bypasses the local open market – where prices can and do rise in years of bad harvest – the full brunt of the country’s demand will have to be met by supply from Thailand, Vietnam, Pakistan and the United States. That will in turn cause prices to surge for countries dependent on imports, such as Nigeria, Senegal, Bangladesh, Indonesia and the Philippines,” he writes. Not only is the price of rice going to go up in India, the world prices will go up as well. We will start exporting food inflation in the years to come.

d) Are the states really ready to launch the food security scheme? Of the fourteen Congress governments in the country only two have committed to launch the scheme on August 20, 2013, the birth anniversary of Rajiv Gandhi.
The government plans to use the public distribution system (PDS) to distribute rice and wheat. Estimates made by CACP suggest that the currently the system has a leakage of 40.4%. “In 2009-10, 25.3 million tonnes was received by the people under PDS while the offtake by states was 42.4 million tonnes- indicating a leakage of 40.4 percent,” the research paper points out. This is a marked improvement from 2004-05 when the leakage was around 54.1%.
Drèze and Sen in their book An Uncertain Glory – India and Its Contradictions divide the PDS into ‘old-style’ PDS and ‘new-style’ PDS. “Basic features of the old-style PDS include narrow coverage, large exclusion errors, erratic supply of food and massive corruption. The new-style PDS is based on a focused effort to tackle these interrelated problems, and to achieve broad coverage, low exclusion errors, regular supply, and relatively small leakages,” write the authors.
States like Tamil Nadu, Chattisgarh, Andhra Pradesh, Himachal Pradesh, Odisha and Rajasthan, are a part of the new style PDS, Drèze and Sen point out. But large states like Uttar Pradesh and Bihar are still on the old style PDS. This will ensure a tremendous leakage of rice and wheat that is distributed at a subsidised price in these and other states which still have old style PDS. 

e) The government ultimately plans to move food security onto the cash transfer system from the current PDS. So beneficiaries will be paid in cash which they can use to buy rice and wheat from the open market. But what will happen to the elaborate grain procurement system that the government has built through the Food Corporation of India in that case? As Drèze and Sen write “If the PDS were to be replaced with cash transfers, the government would have to devise good ways of using all the rice and wheat it procures every year. The procurement system has a momentum of its own, and is unlikely to be dismantled any time soon. Upbeat estimates of massive ‘food subsidy’ savings in the event of a transition to cash transfers effectively assume a discontinuation (or at least a sharp reduction) of foodgrain procurement, but this assumption is rarely discussed. Nor is the political feasibility of discontinuing food procurement given any room in these calculations.”
These are important questions for which the government needs to answer or they will comeback to haunt us in the time to come.
The article appeared on www.firstpost.com on July 15, 2013

(Vivek Kaul is a writer. He tweets @kaul_vivek)
 
 
 
 

Robert Vadra's Midas touch is based on inside info


Vivek Kaul
Robert Vadra is a lucky man. A very lucky man indeed.
People sell land to him and do not demand money in exchange immediately. This is not money running into a few thousands or a few lakhs, but it’s more than a few crore.
In today’s edition of Business Standard N Sundaresha Subramanian explains how it all started for Vadra. How the son-in-law of the first family of Indian politics got into buying and selling land.
Onkareshwar Properties sold 3.5 acres of land in Shikhopur near Manesar to Vadra’s Sky Light Hospitality sometime in February 2008(as an earlier report in The Hindu suggested). Sky Light Hospitality as on March 31, 2008 had an issued capital of Rs 1 lakh. This was the money Vadra and his mother Maureen (who owned 0.2% of the company) had put into the company for business. The company had not taken any loans.
So the question is how did a company with Rs 1 lakh capital buy 3.5 acres of land? The sale deed for this land showed that it was bought by Sky Light Hospitality for Rs 7.5 crore. So how did a company which had Rs 1 lakh capital buy a piece of land which cost Rs 7.5 crore without taking on any loan?
Sky Light Hospitality’s balance sheet as on March 31, 2008 shows a book overdraft of Rs 7.94 crore in Corporation Bank Friends Colony, New Delhi. This basically means that a cheque was issued without enough funds being available in Sky Light Hospitality’s accounts. The cost of the land was Rs 7.5 crore. With a 6% stamp duty, the total would have worked out to Rs 7.95 crore (Rs 7.5 crore + 6% of Rs 7.5crore). And that is more or less the entry that sits on Vadra’s Sky Light Hospitality.
The question is how can a company issue a cheque without there being enough money in its accounts? This can only happen if the individual/company in whose name the cheque is being issued agrees not to deposit the cheque immediately.
And that’s what precisely seems to have happened in this case. As the Business Standard points out “Onkareshwar’s balance sheet as on March 31, 2008, showed an entry of Rs 7.95 crore under ‘sundry debtors’. This corresponds to the entry of Rs 7.94 crore book overdraft entered in Sky Light’s books.” So what this means is that Onkarshwar sold the land, accepted the cheque, did not deposit it immediately and also paid for the stamp duty in the meanwhile.
Vadra took this land and sold it to DLF sometime in June 2008. DLF valued this land for Rs 58 crore and gave Vadra an advance of Rs 50 crore against it. Vadra basically used this Rs 50 crore to go on a property buying spree in Haryana and Rajasthan. What this also meant was that Vadra bought land for Rs 7.5 crore and sold it for Rs 58 crore. And in the process made a profit of Rs 50.5 crore. All along he had invested only Rs 1 lakh of his own money in the deal.
Vadra got the advance of Rs 50 crore in three installments an earlier story in The Financial Express pointed out. The first of these instalments was paid on June 3, 2008, The Hindu had pointed out. It was this money that Vadra would have used to pay off Onkareshwar Properties. So what this means that Onkareshwar sold the property to Vadra in February 2008 and waited till June 2008 to be paid. That was a very considerate transaction in this day and age where every real estate company wants the money in advance.
A clear link has also started to emerge that the Haryana Chief Minister Bhupinder Singh Hooda may also have had a role to play in facilitating the deal between Onkareshwar and Vadra’s Sky Light Properties.
Satyanand Yajee owns 98% of Onkareshwar Properties. He is the general secretary of the All India Freedom Fighters Organisation (AIFFO), the Business Standard points out. “Satyanand Yajee, who turned Onkareshwar Properties, a company with capital of Rs 1 lakh, into a Rs 136-crore capital base behemoth, isn’t an obscure figure. He is an office bearer of the Delhi-based All India Freedom Fighters Organisation (AIFFO)…Haryana Chief Minister Bhupinder Singh Hooda, too, has strong ties to this organisation. Before his death in 2009, Ranbir Singh, Hooda’s father, was working president of AIFFO. And, Hooda is a founder-member and working president of AIFFO’s sister body, All India Freedom Fighters’ Successors’ Organisation(AIFFSO), according to his profile in the Haryana Vidhan Sabha website,” the paper writes.
And the link doesn’t end there. “Both Hooda and Yajee are sons of freedom fighters. While Satyanand’s father, the late Sheel Bhadra Yajee, hailed from Bihar and was said to be close to Subhash Chandra Bose, Ranbir Singh hailed from Rohtak and was irrigation minister of Punjab when the iconic Bhakra Nangal project was implemented. On a website in honour of Sheel Bhadra Yajee, the chief minister, with his father and son, Deepender Hooda, is quoted showering praises. Recently, AIFFO had spent lakhs of rupees in full-page advertisements praising Ranbir Singh’s contributions to the freedom struggle. ,” the Business Standard points out.
Given this it is not surprising that the Haryana government was in a hurry to give Vadra a clean chit on his property dealings in the state. Vadra’s real estate empire started with more than a little help from Hooda.
A part of the money that Vadra’s Sky Light Hospitality got from DLF was also used to buy plots of lands in Bikaner, as a DNA story reported a few days back. “In a flurry of deals between June 2009 and August 2011, Robert Vadra purchased at least 20 plots of land collectively measuring more than 770 hectares in Rajasthan’s Bikaner district, in a region that would see prices spiraling soon after. A clutch of investors, including Vadra, apparently privy to information on upcoming industrial projects (the Vavasi silicon chip project and the solar parks policy) in the vicinity, reaped huge profits with land values appreciating by up to 40 times since 2009,” the story pointed out.
In fact Vadra was willing to pay Rs 65,000 per hectare of land when the going rate was not more than Rs 30,000 a hectare. As the DNA wrote “Bikaner businessman and land investor Vineet Asopa, who sold among the largest plots to Vadra, was so surprised at the ease with which he demanded and received Rs65,000 a hectare when local prices were no more than Rs30,000 a hectare that he summoned contractors for an overnight survey of whether the land was rich in minerals.They dug 80 feet deep, found only rocky surface, and Asopa went ahead with the deal. He found out only two months later that the purchaser was Vadra, whose signature was on the cheques.”
This would not have happened unless Vadra was privy to information about the industrial projects coming up on the aird land he had been buying up. And this needed more than a little help from the government.
Ashutosh Varshney in a column in The Indian Express equates Vadra’s strategy of buying up land before anyone else does, to an honest graft. He quotes George W Plunkitt, a US state senator in the state of New York, in the late 1800s. “In a famous passage, George W. Plunkitt…said the following: “Everybody is talking these days about Tammany men growing rich on graft, but nobody thinks of drawing the distinction between honest graft and dishonest graft… Yes, many of our men have grown rich in politics. I have myself, but I’ve not gone in for dishonest graft — blackmailing gamblers, saloonkeepers, disorderly people, etc… There’s an honest graft… Let me explain by examples. My party’s in power in the city, and it’s going to undertake a lot of public improvements. Well, I’m tipped off, say, that they’re going to lay out a new park at a certain place. I see my opportunity and I take it. I go to that place and I buy up all the land I can in the neighbourhood. Then the board of this or that makes its plan public, and there is a rush to get my land, which nobody cared particularly for before… Or supposing it’s a new bridge they’re going to build. I get tipped off and I buy as much property as I can that has to be taken for approaches. I sell at my own price later on and drop some more money in the bank… Wouldn’t you?” (William L. Riordan, Plunkitt of Tammany Hall).”
That’s what Vadra is doing as well. His mother in law’s party is in power. He is tipped off about a new project coming up in states the Congress party rules. He just happens to be buy land before anyone else does being privy to information. And once the information is made public the price of the land goes up many times over in the months and years to come, and he sells out. Wouldn’t you, dear reader, be doing the same thing, assuming you were privy to  information like Vadra is?
The article originally appeared on www.firstpost.com on October 27,2012. http://www.firstpost.com/economy/robert-vadras-midas-touch-is-based-on-inside-info-504707.html
(Vivek Kaul is a writer. He can be reached at [email protected])