Tag Archives: china

God Almighty — Flash Fiction #17

The tiger has turned into a great nuisance. Humans are worried to no end. It started with cattle and then human beings too began to fall prey to the tigers. People brought out their sticks, their spears and their guns and killed the tiger. But then yet another tiger arrived. Finally, the humans approached God Almighty with an appeal.

“God Almighty! Do please save us from the tigers.”

God Almighty replied — “Okay.”

Soon after, the tigers showed up in the court of God Almighty with a complaint — “The humans have made our lives unbearable. We are running away from forest to forest. But the hunters are not leaving us in peace. Hey God Almighty, can’t you please find a remedy for this perilous situation?”

God Almighty replied – “Of course.”

Just then young Nerha’s mother appeared before God Almighty and prayed —“Baba, please make sure that my Nerha is blessed with a lovely young bride. Please, please dear God Almighty. I am offering you five paisa in obeisance.”

God Almighty replied – “Okay.”

Harihar Bhattacharyya addressed God Almighty on his way to court where his case was pending. “I have worshipped you all my life. My body has thinned on account of the fasts I kept. I want to give a proper lesson to my rascal of a nephew. Please do be my ally.”

God Almighty replied – “Okay.”

Sushil is preparing for an exam. He tells God Almighty everyday, “Dear God Almighty, do make sure that I pass.” Today he added — “God Almighty, if you can arrange for a scholarship for me, I will spend five rupees to distribute sweets I offer in your glory.”

God Almighty replied – “Okay.”

Haren Purakayastha desires to be the Chairman of the District Board. He approached God Almighty through an intermediary, a priest called Kali. “I need only eleven votes to win.” The priest, in lieu of a fat fee, chanted prayers in incorrect Sanskrit making God Almighty nearly lose his mind – “Votam dehi, votam dehi —”

God Almighty replied desperately – “Oh, okeigh, ohkeigh.”

The farmer raised his hands towards the sky and said — “God Almighty, give me water.”

God Almighty replied –”Okay.”

The mother of a sick child prayed to God Almighty–”Oh Lord, I have but a single child. Please don’t snatch it away.”

God Almighty replied – “Okay.”

Khenti pishi, the next door neighbour of the mother, said –”God Almighty, the slut is far too vain. She shows off new jewelry every other day and looks down on us all. You have shown endless mercy by catching hold of the child by his throat. Give the broad a proper lesson.”

God Almighty moaned – “Okay.”

The grim philosopher said – “God Almighty I wish to understand you.”

God Almighty warily responded – “Okay.”

China came up with a piercing cry – “Please save us from Japan Oh Lord.”

God Almighty replied – “Sure.”

A young man from Bengal caught hold of God Almighty– “No editor is accepting my submissions. I want to publish in ‘Prabasi’. Please tell Ramananda-babu to be kind to me.”

God Almighty replied – “I will.”

During a short break, God Almighty asked Brahma, who was sitting right next to him – “Do you have pure mustard oil at your home?”

Brahma said – “Yes, I do. But what’s the problem?”

God Almighty said – “I am in dire need of it. Can you spare some for me?”

Brahma. (Speaking hastily out of all five mouths) “I definitely can.”

Pure mustard oil arrived from Brahma’s home. Immediately, God Almighty put drops of mustard oil into his nostrils and fell into a deep slumber.

Till this day, we has not woken up from that slumber.

Translation-cum-transcreation of a classic Bengali flash fiction বিধাতা (bidhata) by Banaphool. The original version of The Neem Tree was also his creation.


[This a transcreation of an original story written by Banaphool. He is the same writer who had penned The Neem Tree. The present story in its original version was published by Gurudas Chattopaddhay and Sons in 1936 in a collection entitled Banaphhol-er Galpo (Banaphool’s Stories).]

Investigating Investment


Published in The Telegraph, Kolkata on 30 December, 2015.


Listening to the acrimonious debates surrounding West Bengal’s inability to attract high profile investments, an economist ought to ask two important questions; ques-tions which might even appear to contradict one another. First, why are investors reluctant, if they indeed are, to invest in the state? Second, will a surfeit of investment help to eradicate the scourge of unemployment afflicting this economy?

Before proceeding to address these questions in turn, it is worthwhile to ask a third investigative question pertaining to the factual scenario. Is West Bengal truly lagging in terms of investment? The Annual Reports of the Department of Industrial Policy and Promotion (DIPP) published by the Ministry of Commerce and Industry can help resolve this issue. The latest report for 2014-15 throws up data on investment expenditure in the country during the period 2009 through December, 2014, listing in detail the number of investors and the corresponding total investments undertaken annually in the different states as well as the country as whole. For the sake of simplicity, however, it is helpful to study an average figure, investment per project, for the entire economy and that for the state of West Bengal. As the graph illustrates, West Bengal trails behind the country in terms of this average and that the gap appears to be increasing. The figures are not corrected for inflation of course, but the character of the picture is unlikely to change even if the calculations were to be carried out at constant prices.

Although West Bengal is worse off, it is suffering from a relative disadvantage at worst. In absolute terms all parties are affected. It is in this context that the first question assumes relevance. Why are potential investors shy at all, of investing not merely in West Bengal, but elsewhere as well? The science of economics, sadly, has no straightforward answer to the question, except to point out that entrepreneurs as a class cannot foresee with clarity whether the potential produce flowing out of the factories and machineries they set up will be matched by a demand for it. An unwillingness to install equipment results then from gloomy expectations about the future. And this, irrespective of the availability or otherwise of adequate infrastructure, cheap labour or what have you. Indeed, a shortage of infrastructure could not possibly have unleashed the sub-prime crisis in the US or the financial crisis of the far east in the late nineties. Infrastructure, such as electricity, roadways and ports are surely necessary to attract investment, but they cannot guarantee that investment will actually arrive.

Of course, one need not consult a trained economist to come up with this conclusion. However, the converse question is less easy to answer. What is it that does induce entrepreneurs to invest? It is interesting to recall John Maynard Kenyes’ views on the subject. In his classic, The General Theory of Employment, Interest and Money, he observed that the uncertainty facing an investor is hard to resolve by means of a mathematical calculation of probabilities. To quote from Chapter 12 of the book, “… a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits … Enterprise only pretends to itself to be … actuated by the statements in its own prospectus … Only a little more than an expedition to the South Pole, is it based on an exact calculation of benefits to come. … This means, unfortunately, … that economic prosperity is excessively dependent on a political and social atmosphere which is congenial to the average business man.”

If Keynes was right, and nothing noteworthy has happened to the world’s economies in the course of the 80 years or so since the publication of the book to prove him wrong, then large entrepreneurs, foreign or local, are possibly viewing the prospect of setting up shop in West Bengal (as well as in a few other parts of India) no differently from arranging a cricket match in Antarctica. Politicians travel far and they travel wide, governments create single windows, hold business summits and rope in stalwarts from the world of entertainment or sports to anchor reality shows, and ministries are said to be at their wits’ end to convince Central Banks to lower interest rates. But whether these campaigns will touch the right chords in entrepreneurial hearts and arouse their animal spirits remains as obfuscating a query as the mystery of the Holy Grail. So much then for the colour of the carpets being rolled out to invite private investment.

The stage is ready now to face up to the second question. Can a growing investment expenditure path serve as a panacea for every possible economic malady, in particular one as painful as unemployment? Although it is generally believed that investment cures unemployment problems, modern technology, which is moving rapidly towards automation, appears to suggest otherwise. Except for the super-skilled, labour is being relegated progressively to the status of a superfluous factor of production. Uninterrupted growth of investment in modern technology may then be accompanied by a concomitant growth in traditional labour intensive production processes. This is apparent from the way unregistered manufacture has been behaving in West Bengal for the last few years, its annual rate of growth being consistently higher than that of registered manufacture.

Quite apart from the automation question, a steady rise in investment expenditure, as Evesy D. Domar had pointed out in the distant past (1947), impacts the economy in two distinct ways. First, the expenditure creates incomes, and expenditure out of incomes create further incomes and expenditure. The total expenditure so generated represents a growth in demand for produced commodities via the so-called Keynesian multiplier channel. Second, investment in plant and machinery brings about an expansion in the capacity to produce more commodities. The stream of demand is determined by the propensity to spend out of investment led income growth. The second effect, viz. the expansion in capacity is a technology driven matter. There is no reason why capacity expansion should be matched by the demand expansion. If the former should exceed the latter, then excess capacity would emerge, which in turn may dampen the flow of investment. And the latter could end up throttling the growth in demand too.

Needless to say, an open economy will not depend on investment generated domestic demand alone. A surge in investment and capacity growth in China for example catered to large scale exports. Not that the multiplier led improvement in domestic demand was a silent bystander in China’s success story; but the fact that few or no commodities that do not display a “Made in China” stamp are sold in the US (or even in India, if one restricts attention to specified groups of commodities), proves that exports played a major role in lifting up the Chinese economy. And now that Chinese exports have weakened following the indifferent performance of world markets, even crude oil prices have assumed a wistful weeping willow appearance. China’s domestic demand has not been able to save the situation.
There is yet another major factor that needs to be borne in mind in the Chinese context. Keynes’ overt reference to political and social atmosphere is soaked in wisdom. One hears of incidents in China, such as waking up workers for Apple Industries in the middle of the night to ensure that a sudden arrival of order may be attended to with alacrity. A democratic society, however corruption ridden it may be, can hardly hope to replicate such tales.

Investment therefore, even if indispensable, can bounce back as well.



Troublesome landing — They don’t grow land anymore

(Published in The Telegraph, Calcutta, April 9, 2015)


Singur, the potato bowl of Bengal, appears to have landed in trouble again. Not on account of unwilling farmers grieving over their lost assets, but on account of overproduction by the ones who didn’t lose their land. Excess supply of the crop has pulled down prices, leading indebted farmers to slither down the precipice. According to media reports, matters have come to a dismal pass, with a section of the farmers demanding that the Tatas be recalled to help rectify the situation. Industrialization, presumably rapid, will bring along with it employment for the farmers, thereby leading them out of misery.

Simultaneously, the Central government is leaving no stone unturned to ensure the passage of the land bill. What with its minority status in the Rajya Sabha, it is relying now on repeat promulgations of ordinances, till presumably, a joint session of Parliament will beget the act itself, the promised blueprint for industrial bliss. Unleashing the forces of industrialization is believed to be the sine qua non for economic growth, an adored goal for governments across our planet. Growth increases output and growth creates employment, as the recent Singur message appears to suggest. In his radio broadcast, the prime minister, too, has assured a job for each land-losing family, over and above the compensation offered for acquired land.

Availability of land, of course, is an essential precondition for building factories. It is a basic factor of production along with labour and capital utilized by industry. Of these three, though, land enjoys a unique position in that while the other factors can grow, land cannot. Widespread industrialization makes land increasingly scarce vis-à-vis other factors of production, leading to a rise in its market price in the vicinity of industry.

Let us concentrate, however, on the nature of technology associated with growth. As every budding undergraduate student of economics is aware, extra doses of capital and labour, applied to a fixed plot of land, cause aggregate output from an enterprise to rise, but the incremental output brought about by the extra labour and capital begins to fall eventually. Elementary text-books refer to this as the law of diminishing returns. Put somewhat dramatically, a banyan tree cannot be grown in a flower pot, unless it is cultivated as a bonsai.

A sustained rate of growth of per capita aggregate output will call, then, for forces that can negate the tendency for diminishing returns to capital and labour as they are applied to non-augmentable land. Quite obviously, the forces in question will assume the form of technological upgrades that will improve the productivity of capital as well as labour. However, a rapid rise in labour productivity may not necessarily be a phenomenon that acts in the interest of the labouring class as a whole, for it implies that any given volume of output will require a smaller workforce to produce it. The labour required by the industrial sector could nonetheless rise over time, provided, of course, that the size of the manufactured produce itself grows at a high enough rate to engage not only more productive labourers, but also a larger number of them.

Indeed, this is the way employment in China’s industrial sector behaved from 2003 till 2012, during which period the number of workers engaged in industry expanded from 159.27 million to 232.41 million. These figures translate to 21.6 per cent and 30.3 per cent of the total workforce for China. As opposed to this, India employed 24.7 per cent of its workers in industry in 2012, while in agriculture it had engaged 47.2 per cent of the workforce. The land ordinance or act is aimed at reducing the size of the agricultural workforce through allocation of land to industry. Even if the land reallocation goal is achievable, what is not clear is how the displaced agricultural workers will be rehabilitated as industrial workers.

There are at least two issues that need to be borne in mind in this context. First, India’s land area is approximately 2.97 million square kilometres as opposed to China’s much higher 9.33 million sq km. Further, India’s population density is around 421 persons per sq km as opposed to China’s approximate density of 145. In other words, not only does China have more land available in absolute terms to be distributed in favour of industry, it is also likely to displace fewer people in the process relative to India. In comparison with China, the law of diminishing returns is likely to work with a vengeance in India therefore, to counter which India needs massive access to productivity improving technology. And this, as already pointed out, does not send a cheerful message to the agricultural land owners. More productive industrial workers will probably give rise to greater, not less, unemployment in the workforce, especially for those displaced from agriculture.

A second issue that needs to be emphasized is that employment generation in the industrial sector is not merely a technological phenomenon. Industry does not produce output unless it can be sold. And the market for Indian goods is no longer restricted to its geographical boundaries. The country’s open economy policies are gathering pace and this means that it is rapidly transforming into one amongst the many producers catering to world demand. Its producers have to compete with foreigners for a rising chunk of the world market, and this too when the world market itself has been in doldrums for the last few years. Even China is showing signs of a slowdown, in spite of a political structure that allows workers to be woken up in the middle of the night to attend to lucrative export orders.

Whether India can harness the forces of technological advancement in industrial production and compete in world markets is yet to be seen. But even if it is successful in its endeavour, we are likely to be caught in a Scylla and Charybdis paradox, namely, needing to compete in a weak world market on the one hand and preventing unemployment from rearing its head at home on the other.

The implication of technical progress for employment may easily be gauged from the performance of India’s service sector, which produced 56.27 per cent of the gross domestic product in 2012 by employing 28.1 per cent of the workforce. China’s share of services by contrast was 44.6 per cent and its employment share of the workforce was 36.1 per cent. It is no secret that India has a giant lead over China in services and the secret of our success lies in labour saving technological innovations. Exactly the reverse situation prevailed in Indian industry in 2012, where 24.7 per cent of the workforce produced 26.21 per cent of the GDP. China on the other hand utilized 30.3 per cent of the workers to turn out its 45.3 per cent of the industrial share.

It is not entirely clear, therefore, that the magic of competitive growth in industry can be achieved through a simultaneous increase in employment of land and labour, even though the media reported the government to have made precisely this claim following the re-promulgation of the ordinance. If the assertion turns true, what is almost certain to happen is a growth in the ranks of the unorganized labour force working in the fringes of industry in townships surrounding industries.

Since land acquired for industrial use cannot keep pace with the growth in industrial capital and output, a steep rise in the price of land in the neighbourhood of industry can hardly come as a surprise. This had happened in Singur before the Tatas took the curtain call. As Mark Twain had famously observed, the best way to get rich was to buy land, since people didn’t produce it anymore. Some people out there are awaiting a bumper harvest therefore. Not of potatoes anymore, needless to say.

(The author is former professor of economics, Indian Statistical Institute, Calcutta)