Saugato Datta

Perhaps the only (dubious) “virtue” of these “arrangements” is that they remind us that “gentlemanly” is often just code for old money ganging up to ensure that parvenus cannot crash the party. So the outrage is justified. But it is also largely pointless: with voting shares in the Bretton Woods Institutions being what they are, changing the status quo as far as the way the leadership of these institutions is decided will require those who rule the roost in the current dispensation to voluntarily cede their power. As was clear with the unseemly haste with which the Europeans united around the candidacy of France’s Christine Lagarde to run the IMF, the chances of this happening is exactly nil.

Read the rest at: http://www.livemint.com/articles/2012/02/20115748/Views—Who-cares-about-the-Wo.html

How to raise the highest rates without doing too much damage

Jan 21st 2012 | CAMBRIDGE, MASSACHUSETTS | from the print edition

DOES raising taxes on those who are doing well economically stifle growth and slow down the recovery? That depends on how rich people behave when their taxes rise. Do they work less when they are allowed to keep a smaller chunk of their income? Do they move their money offshore? Do they take a larger share of their earnings in forms that are more lightly taxed? Economists have looked at the effects of many past changes in tax rates to try to answer such questions.

Read the rest at: http://www.economist.com/node/21543184

The Indian tax code is replete with special provisions for this or that class of person or investment. The experience of richer countries like the US is that exemptions and special provisions are extremely hard to remove even when the economics of their continued use is clearly regressive

If the only two things in life that are certain are death and taxes, then the only things that one can be sure about as an American campaign season heats up are that one of those – namely taxes – will sooner or later become the focus of immense amounts of debate, rhetoric and posturing, and that the discussion of taxation will be immensely personal. And so it was this week, with Mitt Romney, the front-runner for the Republican nomination, being forced to disclose that his effective tax rate works out to something like 15%.

Republican presidential candidate former Massachusetts governor Mitt Romney. Photo: Reuters

Unsurprisingly, the revelation that a fully-paid-up (touché!) member of America’s top 1%, pays a lower effective tax rate than many working Americans who are barely making ends meet has led to a raging controversy. Although it’s still early days, this issue is unlikely to disappear. If Barack Obama’s offhand comment to “Joe the Plumber” about “spreading the wealth” became the taxation-related leitmotif of the 2008 campaign, then Romney’s 15% tax rate may well become the equivalent lightning rod of this one.

Read the rest at: http://www.livemint.com/articles/2012/01/20121226/Views—What-India-can-learn-f.html

How not to think about inflation

Caravan magazine, January 1, 2012.

A certain kind of history, beloved by the Victorians and the Edwardians, made much of the significance of particular dates—history by the numbers, with a few years remembered for their momentous events (and always for just one) while all the others are relegated to obscurity. Unsurprisingly, this sort of list-making still flourishes in our schools, where one might be forgiven for thinking that nothing of note happened in India between, say, 1707 (“Death of Aurangzeb”) and 1757 (“Battle of Plassey”). Along similar lines, for modern Indian schoolchildren, the year 1974 figures as an “important date” because of the nuclear “device” detonated at the insistence of that Bangladesh-liberating, Pakistan-splitting only-man-in-the-cabinet, Indira Gandhi. 

But 1974 was noteworthy for another reason, and one that children are unlikely to be memorising: through the entire year, the country’s inflation rate was never lower than 20 percent. September 1974, in fact, was a “record month”: inflation as measured by the wholesale price index touched 33.3 percent. (In other words, prices were a full one-third higher than a year earlier.) Perhaps it should come as no surprise that Mrs Gandhi, never less than shrewd, chose that particular year—when the average Indian was earning essentially the same pitiful amount as he had done a year earlier (as was typical in those years of anaemic growth) while paying at least 20 percent more for his meagre purchases—to set off a bomb and whip up the jingoist fervour so beloved of embattled politicians. 

If this was the gambit, it seems to have worked, because one rarely hears talk of the fact that 1974 marked the worst inflationary episode in the history of independent India—even worse, though only slightly, than the only comparable period, between 1979 and 1981, when wholesale price index inflation remained in the double digits, often above 15 percent, for more than two years. Looking back today, in the midst of another sustained period of high inflation that began in mid-2010 and has continued for roughly the past 18 months, one sees both similarities and contrasts: as in 1974, the present spell of inflation has taken place against the backdrop of a global spike in crude and commodity prices and a period of economic weakness in the developed world. But in many other ways, today’s crisis looks very different from the one an earlier Mrs Gandhi had faced: inflation has peaked at around 11 percent and mostly remained in the high single-digits, which would have represented a trough in either earlier cycle. At the same time, the average Indian now sees his or her purchasing power double roughly in a decade; under the growth rates that prevailed between 1965 and 1979, doubling per capita GDP would have taken a century. 

Judging from the exasperation seen in the press at the government’s failure to rein in inflation—invariably accompanied by the fear that high inflation will irretrievably damage the “India growth story”—Indians are clearly agitated about inflation. And there are perfectly good reasons to worry. While the current bout of inflation is far less severe than those India has experienced in the past, several troubling aspects stand out: first, that it came in the wake of a period of broadly low and stable inflation, with a quick spike and a very slow return to “normal” levels; second, that while overall inflation hasn’t touched the heights seen in earlier such episodes, it has remained steadily high in large part due to more drastic spikes in food prices—which also means that this wave of inflation has disproportionately hurt the poor. Food inflation has begun to moderate in recent weeks, as one might expect after a reasonable monsoon. Yet this is hardly cause for comfort. Indeed, the very fact that food prices ebb and flow so sharply with the seasons points to serious structural problems that underlie the way Indian inflation behaves. 

… This piece can be read in full at http://caravanmagazine.in/Story/1224/Fear-of-Large-Numbers.html

A retail economy that allows stores to specialize in serving different niches of the market is more likely to provide consumers with what they need at any given point in time

In the Central Square area of Cambridge, MA is a store called Economy Hardware. It’s reasonably small but big enough to stock a pretty solid range of the sorts of basic home-wares – furniture, lamps, accessories, kitchen goods, bookshelves, rugs – that your average new-to-campus student needs. It is well-located to cater to the needs of such students, being but a hop and a skip away from the eastern end of the MIT campus and only a bit further from an area full of apartments shared by students at Harvard, MIT or one of the many other colleges in the Boston area.

A file photo of a supermarket

The reason I bring this up is that the IKEA-Economy Hardware comparison captures an absolutely fundamental facet of the way people make choices about when, where and how to shop in most parts of the world which somehow never seems to make it into the discussion about big-vs-small, foreign-versus-local debate about retailing in India. In a very basic sense, people need different things from their retail outlets at different times, points in their lives, and so on. Poorer people will probably value low prices over much else (there is a reason why poor people in America bristle at attempts to wean them off McDonald’s – it’s cheap). Others may value other attributes more, at least some of the time. A retail economy that allows stores to specialize in serving different niches of the market is more likely to provide all of them with what they need at any given point in time.

Read the rest at: http://www.livemint.com/articles/2011/12/14113230/Views—Why-opposition-to-open.html

This review of “My Name is Gauhar Jaan:The Life and Times of a Musician” by Vikram Sampath appeared in Biblio’s September-October 2011 issue. It is freely available online, but requires the reader to register first.

Gauhar Jaan of Calcutta was not “India’s first dancing girl”, as early gramophone record covers often said, clearly inaccurately. Neither, as is also often claimed, was she the very first Indian singer to have her voice recorded. The archives of the Gramophone and Telegraph Company (GTL) and the accounts of Fred Gaisberg, who supervised the first “native recordings”, suggest that this honour belongs to Miss Soshi Mukhi and Miss Fani Bala, “two little nautch girls aged fourteen and sixteen with miserable voices”. But Gauhar Jaan, whose fascinating story is the subject of My Name is Gauhar Jaan: The Life and Times of a Musician by music enthusiast Vikram Sampath, was certainly among one of the most celebrated singers of her era. She was also among the earliest, and most successful, recording artists in India. Listen to any of the few recordings of her singing that are easily accessible today, and it is clear why: the supple voice whose bravura taankaari has survived the crudeness of early recording technology and the inevitable deterioration of sound quality over time quite obviously belonged to a singer of great virtuosity.

Gauhar Jaan’s talent was obvious even to someone completely unfamiliar with (and generally dismissive of) Hindustani music. Gaisberg, whom GTL had dispatched to India in 1902, complained that “the Oriental ear was unappreciative of chords and harmonic treatment”. But even he was forced to admit that Goura Jaan (sic), “an Armenian Jewess who could sing in 20 languages and dialects”, could “lay considerable claim to a coloratura voice”. The streets surrounding the Calcutta mansion where he first encountered Gauhar Jaan in concert were packed with people who were hoping to be able to catch a few strains of her voice. As he was shrewd enough to realise, this meant that there was a big potential market for her recordings. It turns out that Gauhar Jaan herself was more than aware of her own market value: she asked for Rs. 3,000 for each recording session at a time when the typical ICS officer was paid Rs. 350 a month. It is not clear whether her “delicate black gauze draperies embroidered with real gold lace, arranged so as to present a tempting view of a bare leg and naked navel”, whose charms Gaisberg was clearly not immune to, helped her strike an even better bargain. 

Driven in part by the wide appeal of the over 150 records she cut for GTL and other companies between 1902 and 1931, Gauhar Jaan’s fame survived beyond the lifetimes of those who could attend (or hang around outside) one of the soirees at which she sang. Her status as one of the first – and biggest – ‘stars’ of the era of recorded sound should be enough to ensure that she has a prominent place in histories of Indian music. Her style of singing set the stage for what would become the standard way to render a raga in the short span of time available to the singer before the development of the long-playing record. For these reasons alone, this book is a welcome addition to the sadly short list of detailed biographies of Indian classical musicians, especially those no longer living.

And what a life it was! It turns out that the leading singer of Calcutta (some might say India, though Gauhar Jaan herself seems to have been in awe of Zohrabai Agrewali) during the high noon of Empire was, rather fittingly, in fact a woman of Indian, Armenian and English descent, christened Eileen Angelina Yeoward on the 3rd of June 1875 in a Methodist church in Allahabad. Her mother Victoria, nee Hemmings, herself the daughter of a Companywallah and his native bibi Rukmani, converted to Islam after being abandoned by her husband, becoming the celebrated tawaif Badi Malkajaan of Banaras. Badi Malkajaan eventually moved with her daughter to Calcutta, whose mix of exiled Awadhi courtiers and rich Bengali babus had made it a major centre for music and dance. An apocryphal tale, recounted in this book, has Gauhar Jaan being fined Rs 1,000 by the Governor for using a six-horse carriage, forbidden to all but the aristocracy. Gauhar Jaan, it is said, paid the fine each time it was imposed, but did not change her mode of transport. One wonders whether such stories inspired Kamal Amrohi’s creation of the character of the senior tawaif played by Nadira in Kamal Amrohi’s Pakeezah, who was also called Gauhar Jaan.

Such anecdotes, gleaned from a wide range of primary and secondary material – including the records of a notorious lawsuit brought against Gauhar Jaan by her mother’s maid’s son – are the book’s main strength. Anyone interested in the history of the performing arts in India, the evolution of the recording industry, and the role and status of the tawaif in the evolution of Hindustani classical music will find interesting – often fascinating – nuggets interspersed through the story of the celebrated gaanewali from Calcutta and the world she inhabited. Those who have wondered, for instance, why early artists spoke their names at the end of each record – Gauhar Jaan, for instance, ended many of her recordings with the words “My name is Gauhar Jaan” – will learn that this was in part because the technicians in Hanover, where the wax masters of the records were sent, would otherwise have had no way to know who was singing. And consider this: the recording technology of the age required a minimum of movement on the part of the singer. So a recording agent would sometimes hold the ustaad or bai’s head still while he or she sang. (One shudders to think of what would have been necessary for Bhimsen Joshi, whose physical contortions challenged the skills of those in charge of microphone placement even in a much later age, to record in the days that Gauhar Jaan did.) One learnt a fair bit about the world of the tawaif, the difference between a “jaan” (who sang and danced) and a “bai” (who did not dance); that accompanists usually stood while only the singerm performed seated; that Gauhar Jaan was an early performer of Tagore’s compositions, well before they were canonised as ‘Rabindrasangeet’; about the wonderfully-named Nanuan and Bachchuan, the leading tawaifs of the United Provinces in the 1920s; or indeed about the ways in which the chhota khayal in fact emerged from a particular form of thumri, known as the bandish ki thumri. 

Yet the discussion of even these interesting matters often felt both superficial and insufficiently nuanced. Much is simply asserted without an attempt to provide any supporting material. Anyone who has heard a recording of Ustad Faiyaz Khan of Agra, for instance, cannot fail to have noticed the high pitch in which he sings. The book claims that Faiyaz Khan and others like him were in fact imitating the manner of singing of tawaifs like Gauhar Jaan, whose success as early recording artists had led the listening audience to expect a certain quality of voice. Yet there is little to back up this claim, which would be fascinating if true. Did Faiyaz Khan sing differently when he was singing for a live audience? Surely some accounts must survive, or even some people who recall having listened to the maestro sing. It would have helped the account if they had been found and quoted. Instead we are told merely that Faiyaz Khan and some of his contemporaries sang in falsetto, “in order to imitate the erotic and seductive mannerisms of the courtesans”.

That last sentence should provide a clue to my other principal reservation about this book. Given the richness of the raw material, it is all the worse that it frequently makes for remarkably painful reading. In large part, this is because Vikram Sampath’s obvious enthusiasm for his subject and his tenacity in tracking down a number of interesting sources runs far ahead of his abilities as a writer. The book is best when it is reproducing what others have written: some of the florid late Victorian descriptions of Gauhar Jaan’s exploits by her contemporaries at least have the excuse of being written, in a different age. But even they can scarcely compete with Sampath’s overwrought prose. If Gauhar Jaan plays a record on a gramophone, then the latter must be one that “rested majestically in the drawing room”. The voice that emanates (or rather, “struggles through”) is “young, sultry, melodious and piercing”. (I, for one, find it hard to imagine a voice that is simultaneously piercing and sultry). When Gauhar Jaan reminisces about her past, then “the fragrance and embrace” of a former lover “swirled in her mind’s eye”. Elsewhere, one cliche follows another. A chapter titled “The Glory Years” ends thus:

Those who liked her, loved her, those who didn’t, well, they hated her and everything about her! What is remarkable is the equanimity with which she handled both. She lived life on her own terms and to the full. But fate had its own plans for her. She went from one personal disaster to another and by the time she was about forty she seemed to be heading towards what was going to prove the biggest blunder of her life.

The story of the greatest singer of her age and the first star of India’s recording industry deserved more skilful writing and considerably more ruthless editing. But at least the broad outlines of Gauhar Jaan’s story have now been committed to print. Twenty-five of her recordings, including the superbly syncretic ‘Mere Hazrat Ne Madeene Mein Kheli Holi’ and ‘Rasule Khuda Bansiwala Hai’ as well as better-known compositions like ‘Ras Ke Bhare Tore Nain’ and ‘Kaisi Yeh Dhoom Machayi’, are on a CD included with the book. Vikram Sampath’s very helpful list of all of Gauhar Jaan’s recordings will hopefully inspire someone to try and track more of these records down. If this book were to result in Gauhar Jaan’s voice being rescued from near-obscurity, that would be a remarkable achievement.

Even assuming no big setbacks, crises, etc. the average Indian in 2030 will be about as well off as the average Turk or Bulgarian is today, and poorer than the average Mexican or Latvian is now

October 10th, 2011. 

The debate over India’s economic performance tends to veer towards one of two extremes. On the one hand, there are those who emphasize the robust rates of GDP growth over the past decade to the exclusion of all else. For the most extreme of these “9%-wallahs”, the fact that India’s economy has been growing at one of the fastest rates in the world means that concerns about poverty can be brushed under the carpet – or, at least, treated as something that will resolve themselves in due course. For their opponents – the “poverty-wallahs” – the continued existence of large numbers of the indigent and the dispossessed in post-liberalisation India is a clear indictment of the country’s economic structure and policies.

Read the full article at: http://www.livemint.com/2011/10/10143336/Views—Between-the-9wallahs.html 

Americans are not as gloomy as economic data might suggest

Oct 8th 2011 | from the print edition

WILL the next presidential election see Barack Obama return triumphantly to the White House for a second term as president of the world’s biggest economy? Or will a sluggish economic recovery, which has left over 14m Americans out of work, doom him to defeat in November 2012?

… read the full article at: http://www.economist.com/node/21531437