Show me the money!

Business and economic planning in Meghalaya is arguably the most neglected area of governance by past and present policymakers. Now, there are a number of problems within the entire topic. There is immense wastage of energy and time, inefficiency, corruption on a sinful scale. The officers are drowned in oft-times pointless paperwork and become indifferent while the MLAs use the misery and poverty of people as an excuse to accentuate their supposed nobility and generosity, when they deliver umbrellas and blankets to the constituency. It is a cyclic nightmare. None of the people will escape poverty and the rich will continue to dominate elections.

No one wants to give serious thoughts to creating a Meghalaya which is self-sustainable and economically independent. Forget the pre-election rhetoric, the policies do not reflect it. To actually initiate such a task would require work, will power and actual thinking! A Meghalaya that stands on its own two feet is a Meghalaya where the citizens stand on their own two feet, and that my friends, is dangerous for the dominant power structure. An economically confident citizen is not going to simply follow what is ordered from above without questions. Such a citizen would have the means to critique Power. This is why an economically feeble state is such a danger to the democratic ideal. I am aware that there are a number of other threats. After all, even economically powerful states and countries have to deal with other dangers to their democratic apparatuses. Europe is a good example currently. However, as any good Wiki Marxist comes to realise: in the last instance, it is the economy.

Going back to the broad topic of economic planning, I would like to talk about a single but crucial issue that keeps coming up: capital, or the lack of it. I would like to build upon this with an example. There is a shop in Laitumkhrah which initially opened up as a retailer of specialty baked goods (in this case, cookies). Their products were priced along the lines of similar establishments in the major cities like Delhi. Needless to say, the shop didn’t flourish. After all, there are a number of other local purveyors of baked goods which have been selling their wares for half the price that the shop was offering. It was forced to shut down after a while. This would have been the end of the story – had the proprietors been Khasi/tribal. I know how that last sentence sounds but please read on. The same shop space later transitioned into a boutique (if I remember correctly) which also failed to attract customers. Finally in its last and latest avatar it came out as a cafe and since then it has become a popular eatery frequented by tourists and college goers.

Now as I said earlier had it been a Khasi/tribal business, in all probability it would have rolled down its shutters forever and a new tenant would have taken up the space. The lesson we must learn from this story of the trans-mutating store is this: when people have capital, they can afford to innovate. Or it can also be argued that a conducive environment allows for experimentation, but I want to look specifically at the issue of capital and its availability.

The cafe in my story is owned and operated by a Marwari businessman. The ability that the businessman had to continue paying rent in spite of bad sales indicates his financial capacity. A capacity that few tribal businesses can compete with. There are many sad instances that I have personally seen where the promise, excitement (and perhaps naivete) of a new undertaking quickly gives way to dejection and finally abandonment. Many Khasi parents are quick to further their children’s dream of being financially independent by shelling out the cash needed to set up a business. These are usually out of their own savings. Now, one must be very practical with money: can the business survive in the marketplace against constant competitors and toughened veterans? Would it be money well spent? Business literacy seems to be the need of the hour. The cafe in Laitumkhrah, for the Marwari businessman, is probably a diversification of money he has made from the ‘unglamourous’ and ‘uncool’ shop he keeps which sells dal and chini in Iewduh. It is based on risks which he can afford to take.

One must also keep in mind that the Marwari community like many successful trading communities has traditional institutions that aid it. Their community can ‘move’ money from project to project in an informal but highly efficient “banking system” which was honed over hundreds of years. This makes it extremely easy for them to access capital from anywhere, provided that the proposal is sound. How do tribal businesses compete with years of such experience (and money) if there is no helping hand from the government? Government intervention in economic affairs must surely extend into areas beyond infrastructural development! A policy of ‘positive discrimination’ would ensure that the current economic state of affairs does not spin wildly out of control. Measures like rent allowances (or control) for young start-ups, orders guaranteeing floor and shelf space for local produce are just some of the ways that a smart and progressive government would take.

If you look carefully you might notice that most protests in the state are, at the core, economic agitations. The ILP imbroglio, the predicament with the hawkers and many others are all economic issues. The government CANNOT absorb every single resident of the state into its service. It would be ludicrous for it to try. It must promote and regulate private enterprises. Especially the small and medium scale enterprises which are usually (I might be terribly wrong) tribal enterprises. Easy access to capital is one of the most important ways to ensure that these businesses are nurtured and reared properly. Right now, government policy with regards to banking sector practices more or less ensures that only the already wealthy tribal elites get their hands on capital. It is very hard for the people who need investment to get their hands on it. Instead of judging a proposal based on its merits and demerits, the only thing that seems to matter to banks is that one must have heavy-weight ”guarantors” for everything. What happens to those who don’t have any guarantors? The current manner of running financial institutions within the state is creating an inequality which we have never before seen in our tribal society. It will tear this society apart and I don’t think it is hyperbolic to imagine such things. The government has been impotent for too long in planning out poverty, in addressing unemployment, in mitigating income gaps. Ensuring the proper dispersal of capital investment into crucial areas would surely be a major step in righting the wrongs.

Planning for People

Every year, in March, I have to listen to the same pseudo-technical verbosity at State and Central levels being reported across various media outlets. The Budget Session, it is clear from all the attention and scrutiny it receives, is by far the single most important Parliamentary session there is, and rightly so. Economic activities are the life-blood of society. Here in Meghalaya sadly, the only sheets we know are bed-sheets (which we buy with money which isn’t ours). The grim reality of the state balance sheets has not roused us from our slumber. A quick survey of letters sent in to the editor of Shillong Times shows us that for good or bad, people do have various political opinions and certain positions that they hold up. I might not agree with most of the views but it is ‘healthy’ nonetheless to observe the flux and flow. It is striking though that economic opinions that make their way to the Shillong Times are too infrequent and callow when they appear. For sure, it is easy to drown in the verbal mire of economics and finance and perhaps this is why letters addressing these issues are so scarce. Economics has become, like Law, a specialist discipline. It should not be.

The people of Meghalaya have been their own political masters for a fair amount of time now. We have captured political power but economic power is still a far-cry. We barely produce anything on our own. Our capacity for production is only half-heartedly bolstered. Most of our essential commodities come from outside – rice, sugar, salt, oil – and we are effectively just a colony of consumption. Various reasons are touted for this problem: everything from mismanagement and corruption to the ineptitude and supposed laziness of “tribals”. There is no one correct answer but there must be resolution. The governments that have ruled Meghalaya thus far have been simply allocating money to various projects and departments, they have not been thinking about a living economy. Of course, we need capital investment but we need to have visions first and a commitment to work with the people towards those ends. The point of this entire financial hullabaloo is to try and make people’s lives better. It is that simple. There is no point trying to hide behind jargon – fiscal this and GDP that – when there is no clear goal.

The Budget Session must be quite tiring judging by the looks of the sleepy faces and drowsy heads. Why is that so? There is no doubt that there are a lot of numbers to be crunched and aside from a few passing observations mentioned in the newspapers by some legislators it seems that most have no idea what is going on. It is unquestionably boring and no one can visualise what any of the figures actually mean on the ground. This has to be changed if we are to proceed ahead. The economy and economics need to be simplified more (and their reach widened) because contrary to what many economists believe it is not rocket science. We will be doomed if we rely only on technocrats who do not know anything outside their offices. Unless more of us gain insight into the world of economics we will find it very difficult to mount any sort of counter argument.

To get some idea about the terrible state our economy is in we should look at a sector. Infrastructural development is probably the dirtiest business in the world. There is much money to be made and if you ally yourself with a political party, you can be a certified contractor chamcha. That is why there are so many contractors today, because government policy is inclined in that direction. The need for good and safe infra is not in question. It is an absolute necessity. However, planning in this regard continues to be implemented with no accountability. If the estimated costs for completion of a project are say 5 crores and actual costs come to about 4 crores, you can be assured that 70 lakhs will end up in the wallet of the contractor. The government stops caring when the building is up. It doesn’t give a damn about fair wages and the rights of the labourers nor has it shown an interest in minimum wage revision and other important topics. They can show in their books that the job was completed and wash their hands of anything else.

The point of governmental spending should not be to create a class of elites but to redistribute resources among the people. Taxation (wealth, income) is supposed to help address this problem by levying taxes on richer people and giving that to the many in the lower strata. This is why the wealthy want tax breaks. In Meghalaya, a dangerous situation is coming to a head. We have no means of controlling the hoarding of wealth and assets within the tribal milieu. What is happening (and I blame governments squarely for this) is that a few families and business houses are becoming too powerful and it puts our collective safety in jeopardy. The Land Act, Benami Act protects tribals from ‘outsiders’ but what protects tribals from other tribals? This is a very disconcerting question but it needs answering. Every major party in the state today is a serpent’s nest of vested business interests. Every political party operating currently exists to make their members richer and more powerful. They don’t care about the life and death of your small business nor will they protect local industry from outside competition. Our public debts are mounting and there is no easy way to bring it down. The gates are open and our local enterprises are left to fend off the giant commercial sharks, in a leaky boat, with a broken oar.

I recently heard an anecdote about the ex CM of Meghalaya, (late) B B Lyngdoh. A person informed me that Mr Lyngdoh would always convene a meeting with the local retailers, merchants and service providers of Iewduh every few months in order to understand the trends in the marketplace and to solicit their views about what needed to be done for a healthy economy. These were not just the big-wigs of the bazaar but included tailors, grocers and others. Such proactive inclusiveness cannot be imagined today in Mukul’s Meghalaya. It further highlights humility and a dedication towards public service which I have not seen in most of our sitting legislators. There was less money in the economy in those days no doubt but there was also less corruption. Maybe I am being naive but it sounds more like an economy of the lower rung, building up from below. Contrast this to our current economy of booze drenched party planners and in-bred contractor khandans and you can gauge for yourself how far we have fallen.