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My Friend Sancho

My first novel, My Friend Sancho, is now on the stands across India. It is a contemporary love story set in Mumbai, and was longlisted for the Man Asian Literary Prize 2008. To learn more about the book, click here.


To buy it online from the US, click here.


I am currently on a book tour to promote the book. Please check out our schedule of city launches. India Uncut readers are invited to all of them, no pass required, so do drop in and say hello.


If you're interested, do join the Facebook group for My Friend Sancho


Click here for more about my publisher, Hachette India.


And ah, my posts on India Uncut about My Friend Sancho can be found here.


Bastiat Prize 2007 Winner

Category Archives: Economics

Pervez Musharraf’s incentives

Headlines like “India-Pak terror pact sinking fast” exasperate me. Whaddya expect? As I have written before, the India-Pakistan peace process is a charade. While it is in General Pervez Musharraf’s interest to talk peace with India, as it makes him appear responsible in the eyes of the international community, it is equally in his interest to continue the conflict, which Pakistan’s military needs for its sustenance. All talk, no walk, in other words.

Similar incentives drive Musharraf’s actions as far as the War on Terror is concerned. As I wrote here, appearing to be America’s ally gets the foreign aid flooding in (1, 2), which Pakistan’s economy desperately needs. However, if al-Qaeda and the Taliban are actually defeated, then that aid will begin to dry up, as Musharraf and Pakistan will no longer be needed so badly.

In each case, Musharraf is doing what any rational person in his place would do. The only way to solve either problem is to change his incentives. And, much as the mandarins in New Delhi may shudder at the thought, the Americans can do that far better than we can.

The next few months will be interesting.

(Some earlier posts on Musharraf.)

Posted by Amit Varma on 12 March, 2007 in Economics | Politics


Why Liz Hurley is good for India

Because the economy benefits from her marriage to Arun Nayar. Times of India reports:

The hospitality sector estimates that the Jodhpur wedding [between Nayar and Hurley] should cost about Rs 1 crore.

I’m assuming that with so many foreign guests coming down, and some of them perhaps being tempted to return later, the indirect benefits of the wedding will be even greater than that. And much of the money spent may not have been spent within India if not for Liz Hurley. Thus, however much we may envy the rich their ability so spend so ostentatiously, we should actually encourage them to do more of this, because it ends up creating jobs for people at the bottom of the ladder throughout the hospitality industry.

Also read: “Lavish weddings are good for the economy.”

Posted by Amit Varma on 09 March, 2007 in Arts and entertainment | Economics | India


Your maid funds Unani

This is the latest installment of my column for Mint, Thinking It Through. It is an elaboration of my concerns behind my ongoing series, Where Your Taxes Go, and I’d like to thank all the readers and bloggers who have sent me links for that. Keep them coming, and keep expressing your outrage on your own blogs as well.

These are good times for Unani. In his latest budget, the honourable P Chidambaram allocated Rs. 563.88 crores for the Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy. I kid you not, I am not making this up for your satirical amusement. That departments exists. And you work your ass off, and make sacrifices, so that it can be funded. You and your maidservant.

On my blog, I have a section called “Where Your Taxes Go,” where I document strange instances of how our taxes are put to use. There is much there that is trivial and amusing—a moustache allowance for a havaldar in Lucknow, compensation for a bank employee mistakenly declared dead, salary for an 11-year-old teacher, relocation of monkeys from New Delhi to MP (only Rs. 25 lakhs). There is also much there that underscores the irresponsibility of our politicians—toilet refurbishment allowances for Jharkhand legislators, parliament hold-ups that cost 20k a minute, the 90 lakh free TVs that the DMK promised in Tamil Nadu to get elected there. Most of us are so used to government wastage that we shrug this off. “Pata hai yaar,” we say together in a gruff chorus of a billion nonchalant voices. “So what is new? Gorment is like this only.”

Read more...

Posted by Amit Varma on 08 March, 2007 in Economics | Essays and Op-Eds | India | Old memes | Taxes | Thinking it Through


The mistake some of us make when we talk about the budget…

... is in assuming that government spending can solve all our problems. The government may spend more on education, but that doesn’t mean that Indian kids will get anywhere near the education they should, or that the education system will become better. Our mai-baap sarkar may announce a safety net for workers, but that doesn’t mean that workers will benefit. It may extend the REGB, but that doesn’t mean that it is doing anything to enable the growth of employment in this country. In some cases, it might actually be harming the cause of those it claims to benefit, by spending money inefficiently that, had it never been taxed in the first place, would have done more good for the economy.

Beyond that broad point, I will offer no comments on the budget—there’s enough of it out there in the MSM already. I’m just glad there isn’t a cess on blogging.

Additional notice: My “Thinking it Through” column won’t appear today in Mint, because they needed the space for budget analysis, some of which is very good. Regular service resumes next week.

Posted by Amit Varma on 01 March, 2007 in Economics | India


Enough carrot. Time for stick

Dick Cheney landed in Pakistan a couple of days ago to urge Pervez Musharraf to get serious about fighting al Qaeda. About time. This acknowledges that Pakistan wasn’t doing enough to wipe out al Qaeda to begin with, and no sensible man would expect otherwise. As I wrote here and here, it is not in Musharraf’s interest to end the battle with al Qaeda by winning it. Pakistan’s economy has flourished after 9/11 because it is the USA’s main ally in the War on Terror, and an end to the War on Terror means an end to aid and preferential treatment.

So the carrot was never likely to work. Will the stick fare better?

(Previous posts on Musharraf.)

Posted by Amit Varma on 27 February, 2007 in Economics | Politics


Socialism and the Sirius Cybernetics Corporation

Kunal Sawardekar writes about how Douglas Adams’s description of the Sirius Cybernetics Corporation fits socialism as well:

Their fundamental design flaws are completely hidden by their superficial design flaws.

Kunal expands:

Whenever a Socialist policy fails, the blame falls on some minor (in the greater scheme of things) deviation from the Socialist Golden Path. For example, the National Rural Employment Scheme is a brilliant solution to rural poverty, it will only fail because the bureaucrats have weakened the Employment Guarantee Act. Forcing banks to give farmers in Vidharba low-interest loans in a good idea, the problem is that the interest is not low enough. Five-year-plans are a great idea, its just that our planners sucked. And so on.

Indeed. Always blame the execution—or order one, if it comes to that. That’s the way of socialism.

(Link via email from Ravikiran. And here’s an old Op-Ed by me on the REGB.)

Posted by Amit Varma on 26 February, 2007 in Economics | Politics


Newspapers and regulation

I spend the whole day at the Kitab festival, hanging out with pals like Jai, Chandrahas and Manish, meeting the litty sorts and bitching about them like bloggy sorts should. I was also part of a session on journalism in India, and found some eminent people expressing the view that journalism needs to be regulated in India. The logic: The Times of India is indulging in monopolistic practices, and, in Delhi, forming a cartel with the Hindustan Times. To ensure competition, there should be government regulation.

I couldn’t think of a worse solution to the problem. (Leave aside the issue of whether there really is a monopoly emerging; Mumbai alone has HT, DNA and IE on the stands, among daily broadsheets.) The industry actually needs fewer controls, not more. If foreign capital was allowed to pour into that sector, and foreign ownership of media was enabled, there would be more competition, and monopolies and cartels would be less likely. Consumers would be empowered with more choices. Competition is the best regulation.

Government regulation, no matter how well-intentioned to begin with, always ends up favouring the entrenched players, and making it harder for newer players to enter. The protectionist lobbying that some of the top media houses in the country have done to keep foreign media out is a good example of this.

In my clumsy, inarticulate way, I did try and make this point, but I’m a better blogger than speaker. Anyway, the high point of the evening was the presence of Bhaskar Das, the executive president of the Times Group, who rightly got assailed about how the Times of India sells editorial space. “We don’t do it on all the pages,” he argued. “Only some of them.”

The best moment came when someone asked Das why the ToI didn’t have the basic decency to indicate which articles were paid for. His reply:

“The clients wouldn’t like that.”

Joy. It reminded me of Devi Lal, in that it was honest, and shamelessly so.

Posted by Amit Varma on 24 February, 2007 in Economics | Freedom | Media


Where your taxes go: 15

To space.

You see any earthly reason for it? I don’t.

(Where your taxes go: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14. Also see: 1, 2, 3.)

Posted by Amit Varma on 22 February, 2007 in Economics | India | Old memes | Taxes


Why India needs school vouchers

This piece of mine was published on January 15, 2007 as an Op-Ed in the Wall Street Journal Asia. (Subscriber link.) It was also posted on India Uncut.

On India’s Republic Day, January 26, the New Delhi-based Centre for Civil Society will launch a campaign for school choice. It’s an apt day for the event. While India’s constitution guarantees universal and free education, the government has utterly failed that mission. It’s time to encourage the private sector to step in.

Read more...

Posted by Amit Varma on 15 February, 2007 in Economics | Essays and Op-Eds | Freedom | India | WSJ Pieces


Empowerment, not slavery

A version of this piece by me was first published on November 8, 2005 in the Wall Street Journal as “Self-Delusion.” (Subscription link.) It was also posted on India Uncut and the Indian Economy Blog.

Organized slavery ended decades ago, but to go by the criticism of some leftist commentators in India, one would imagine that it is alive and flourishing in the world’s largest democracy.

Recently it has become especially fashionable to hit out at call centers, or business processing outsourcing (BPO) units as they are officially known. A study published by an institute that comes under India’s Labor Ministry compared conditions in Indian BPO outfits with those of “Roman slave ships.” Chetan Bhagat, the author of a new book set in one such unit, “One Night @ The Call Center,” recently claimed that call centers are “corroding a generation.” It is common, almost clichéd, to hear call-center workers referred to as “cyber-coolies.”

Read more...

Posted by Amit Varma on 15 February, 2007 in Economics | Essays and Op-Eds | Freedom | India | WSJ Pieces


The kidnapping of India

A version of my piece below was first published onOctober 5, 2005, in the Asian Wall Street Journal (subscription link). It was also posted on India Uncut and the Indian Economy Blog

Imagine this scenario: someone kidnaps a child and, for decades, maims and exploits him. Then, in a sudden revelation, we learn that the kidnapper was once under the pay of a branch of the mafia that is now defunct. There is instant outrage, and everyone condemns the crime. “How could you have taken money from the mafia?” they ask.

Read more...

Posted by Amit Varma on 15 February, 2007 in Economics | Essays and Op-Eds | Freedom | India | Politics | WSJ Pieces


Good intentions, bad ideas

A version of my piece below was first published on September 15, 2005 in the Asian Wall Street Journal (subscription link). It was also posted on India Uncut and the Indian Economy Blog.

The road to hell is paved with good intentions—and nobody knows that better than India’s poor. There can be no better intention than removing poverty but, for more than half a century, a well-intentioned and bloated state has only perpetuated it with misguided policies and regulations. And New Delhi still hasn’t learned from these mistakes. The Indian government is soon to embark on perhaps the grandest waste of taxpayers’ money yet: the Rural Employment Guarantee Bill.

Read more...

Posted by Amit Varma on 15 February, 2007 in Economics | Essays and Op-Eds | India | WSJ Pieces


The myth of India’s liberalization

The piece below by me was published on June 16, 2005 as an Op-Ed in the Asian Wall Street Journal, titled “India’s Far From Free Markets” (subscription link). It was also posted on India Uncut.

Indian Prime Minister Manmohan Singh is due to visit Washington in a few weeks, and editorialists and commentators have already started writing about the emerging economic power of India. New Delhi’s decision to start liberalizing its economy in 1991 is touted as a seminal event in India’s history, the moment when it threw off the shackles of Fabian socialism and embraced free markets. It is the stuff of myth—and to a large extent, it is exactly that.

Read more...

Posted by Amit Varma on 15 February, 2007 in Economics | Essays and Op-Eds | India | Politics | WSJ Pieces


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