Strikonomics

"Economics is a study of how society decides what, how and for whom to produce". ("Economics" by David Begg, Stanley Fischer and Rudiger Dornbusch). Recently I got acquainted to Economics behind mass strike, popularly known as "Bandhs". It is very interesting to note how a handful of protesters decides what to do, how to do and for whom to do.

It was wee hours of 20th of September 2012, I woke up when I found my train making longer than expected halt near outskirts of Patna. I left Delhi last evening after a tedious and monotonous long stay of 8 days.

I did not leave my berth until I was made curious by my fellow passengers. The uneasiness inside the coach created all the required impetus for me to get up and to get the first hand experience of the situation beneath. The halt was indeed unexpected and very unlikely of Rajdhanis. I got up and decided to become a part of morning chaos. I dragged myself out of the compartment to see what others had been doing.

Phone calls everywhere. "Our train has been stopped by some 500 odd protestors, I have no idea where the train is, will keep you informed, in case situation fails to improve, you will have to pick me up from this location only". An old man's pity as it was being told to his son, most probably.

Coach attendant rushed to fold the bedding, on my protest, he left the one I was using and continued his business with others. He must have been feeling assaulted with my rude "no-go", he murmured with a purpose of making me aware that he was such an important person with whom I had just misbehaved, "On last occasion train had taken 3.5 hrs to reach Patna from this place, it wont be wise to wait for train to leave, better leave the train".

Had this statement been made in a cordial atmosphere I would have appreciated it and followed it incredulously. But the statement could have been a by product of anger and intent of revenge for my recent assault on him. I made up mind to sneak through the door, lean a bit outward and sniff the scene outside. I saw number of cars already lined up, waiting for their loved ones to make an exit from the stranded train. Few were not so lucky, they were lined up across the road, waiting to be picked up by public mode of transport. The crowd includes, women, children and senior citizens. It was a nightmare of senior citizens, getting out of train which is almost 5 ft above the ground level is not a small deal.

The red signal was showing no signs of changing its color. In an era when changing one's color is so ubiquitous, this signal stood with an inexorable wont-change-my-colour-do-whatever-you-want attitude. When the "unexpected" and "most unlikely of Rajdhani's" halt was just inching towards completing an hour, came the first official confirmation from coach manager, "Train cannot make its journey forward at this point of time as 500 odd protesters have taken over the railway tracks. This is Bharat Bandh". I was forced to de-board the train and to terminate my journey near outskirt of Patna. Having no idea where to move I decided follow my fate. I jumped out of the train with my bag and baggage. 

The railway track which ran parallel to the one on which my train was stranded welcomed me in typical Indian Railway style, with series of human excreta and its toxic smell. It is very tricky to cross railway tracks in India, you cannot run as it comes with a risk of losing your focus, the moment you lose your focus you could well end up landing onto freshly exhausted human waste. You can not be slow either as the "venomous" smell is enough to make you unconscious. I sneak passed the track and saw an auto rickshaw racing towards me. I was the only one who chose the other side of the train to get myself out, the auto driver did not take a minute to judge that he had just made a wrong move. By the time he had sniffed the tantalizing smell of unprecedented profits he could make on selling his services at premium to helpless passengers, he took a sharp U turn and rushed to the opposite side where hundreds of men women and children were waiting to be picked up. I instructed him to stop, he was in hell of a hurry. "Rajendra Nagar Jana hai, Kitna loge?", I asked. "Reechap (reserve) me chaliyegaaaaa?". "Han". "Taaa teen sau rupaiyaa legega". With  borrowed idea of the place from my fellow passengers, confirmation of the same through Google Navigator, a smart app of my smart phone, I came to know that I was hardly 8 Kms away from my destination. The Auto-rickshaw was asking 40 Rs a Km from me.

"Kuch kam karo bahiya". I requested, "Etna hi lagega.. chalna hai taa chaliyeee, na ta hum chale". I thought for a while and said "No" to him. Even the most luxurious cab services of Delhi/Mumbai would charge lower than the price what I was just asked to pay. I continued my stroll further till I found a good four lane road. Suddenly I saw an auto passing by, it was shared one and was going to Patna Junction. During my short journey to my home I saw what I describe as "Strikonomics"

I read statements made a day before by various political parties that the Bandh was called to save the aam aadmi from frantic bite of rising inflation. The Bandh had just jacked up auto fare from Rs 150 to Rs 300 a trip. I don't know what kind of relief they were talking about. I was also told that the Bandh was being constituted to save aam aadmi from deep inconvenience they might have when entry of foreign retailers would be allowed in India, aam aadmi was suffering on that day also. Agreed, Rajdhani travelers are not aam aadmi, but what about thousand others who were also stranded around the outskirts?

On my entire journey I tried my best to figure out what protestors were doing, how they were doing it, and for whom. The essence of Strikonomics. First I saw bottom of pyramid, the slum-dwellers. The footpath colony had already started their day, men had just finished their morning ablutions, women had started cooking, or perhaps making last night's left overs re-warm. They did not seem to be bothered about the Bandh. They might mot be aware of it at all!

Alright alright, slum dwellers are choosa hua aam aadmi (Squeezed common man) and hence must be taken out of the context. Policies are made keeping them in mind, votes are sought using their names but when it comes to making their presence felt, they, all of a sudden are made alien. My curiosity incresed, if not Railway passengers, not slum dwellers then for whom the protest was orchestrated?

Soon I witnessed a road blockage, my auto driver, very promptly took the sharp right turn and ventured into a diversion. Fortunately, I was able to figure out who the protestors were.

Protestors were known creatures, white kurta clad creatures, had no idea what they were doing, why the whole protest was being organized. I am sure many of them would have not been made aware of the issues based on which whole drama was being played. My curious eyes kept invigilating, but failed to find even a single aam aadmi coming out in support of the Mass Strikers, I found aam aadmi rather perturbed with these crazy acts of Rail Roko and Chakka Jam.

If the kurta clad creatures were not following the mandate of aam aadmi then for whom the whole episode was planned? If India is a democracy, all political parties must follow the dictate passed by the citizens of this country, then why the mandate did not irk even a slightest of response from political class. There were 3 major issues raised by the political parties during the Bandh.

1. Hike in diesel prices: Diesel prices were hiked by Rs 5 a liter, let us find out how it would impact aam aadmi. First we need to understand dependence of aam aadmi on diesel. A common man uses diesel propelled public transport, purchases vegetable which are supplied to their nearby mandi in trucks, again propelled by diesel. Farmers uses diesel to run their pumping sets, run their tractors. 

These all modes consumes 78% of diesel subsidies, here it is pertinent to submit that subsidies are nothing but taxes collected from the same aam aadmi. Rest 23% subsidy is getting wasted as it is used in fueling cars and SUVs. I would urge my readers not to see this hike in present scenario rather see this hike keeping in mind long term perspective. Subsidy burden is ultimately borne by tax payers. Selling diesel at controlled price and selling petrol at market determined price was widening the gulf between prices of diesel and petrol. This huge gap was prompting prospective buyers to purchase diesel fueled vehicles, auto companies too responded promptly and spurred manufacturing capacity of diesel vehicles, usage of diesel power generators were getting cheaper than industrial electricity tariffs, more and more industries started using subsidized fuel more aggressive than ever, originally intended for public transport and farmers. It was imperative to put a brake on uncontrolled growth in diesel consumption. Yes, quantum of increase in price is debatable and I find myself incapable of challenging decision taken by eminent economists in MOF. Hike was inevitable as it would soften the burden of burgeoning diesel subsidy bill which is still pegged at 1.7 Lac crore, little more than the State GDP of Jharkhand!.

2. Retail FDI: It was not too long ago when we saw similar protest for opening of organized retails for domestic players. Few states, such as Bihar/UP, have still not allowed Reliance retail to open their stores (Reliance fresh, Mart and Super). Four years have passed since then, Reliance hardly made any dent on business of neighborhood stores. 

Let me also tell you a story, story of onion farmers of Nasik, India's biggest mandi of onion farmers. Onion is very powerful in dethroning governments, we have seen it in pasts how NDA and Congress lost the battle due to high onion prices. Lets come back to onion farmers of Nasik. When the whole India was paying Rs 50~60 Per Kg for onion, Nasik farmers were getting highest ever price for their onions. Can you guess how much that was? It was 10 Rs a Kg.
Price of onions get increased by 500% by the time it reaches your kitchen. Even if onions are ferried through air transport from Nasik and a hefty 100%  margin is kept, by no means price can go up to 60 a Kg! Then who is eating out the chunk of the margin? It is the middlemen to which organized retailers are biggest threat. Middlemen lobby is extremely powerful in the country and enjoys unprecedented patronage from their political masters. Their bosses use them wisely in pre-election campaigns. Whatever be the scenario after entry of retail majors in India, our neighborhood stores and small neighborhood vegetable mandies will continue to make their presence felt.

3. LPG Subsidy: Every Domestic LPG cylinder is subsidized by 40%. The subsidy was introduced in early 80's to encourage poor Indians towards usage of cleaner fuel for cooking. LPG consumers have grown at a rapid rate of 44 lacks consumers per year, so the subsidies. In the last 5 years LPG consumption had witnessed exponential growth. Widespread use of Domestic subsidized LPG cylinder in hotels and automobiles is not a secret anymore . Capping the usage of subsidized LPG cylinder would route these subsidies to place where it was originally intended to, your kitchen.

As seen above, all three decisions taken by the government are logical and need of the hour. We were under the threat of credit rating downgrade to "Junk" status. Fiscal and current account deficits are all time high. FIIs were abhorring from routing money to India, Indian Rupee was facing humiliating devaluation. Keeping in mind all these cues what we were getting from across the globe, the decision taken by the government are welcomed and justified too. 

If the logic behind the decisions are valid and no such unprecedented public anger was seen on roads, then why the Kurta clad creatures were making our life hell? After a long deliberation I understood, they are working for themselves. Current politics of India has nothing to do with the aam aadmi, political parties manages elections. Many of my prospective readers would argue that my voice do not match with the chorus of the country, but I am confident than my voice is similar to the powerful Indian Middle class. 

According to political leaders, Bharat Bandh was organized for making voices of common man heard to government and to assuage their pain and inflictions, but the truth is way apart from the reality, it is the common man who gets perturbed the most during these Bandhs. 

Therefore Strikonomics says, "Strikes are organized by a group of unemployed political workers by adopting destructive techniques like rail roko, chakka jam, purely aiming at disrupting life of a common man and wholly intended for betterment of their own political carriers".