Can we regulate ourselves to development?

A question arises in the mind that if lawyers can do so much to improve the economy, can we just pass requisite regulations and "become" a developed country?

Well let me give you an example:

In USA, 15 years after the law was passed for making seat belts mandatory in all cars and wearing them, hardly 11% people wore them. As compared to today 85% people use a seat belt to make their travel safe.

40,000 people die annually in USA due to road accident today. Which is roughly the same before the invention of seat belt. Of course the number of people-miles ( number of people X number of miles) would have increased exponentially so the invention of seat belt has actually made road travel safer.

When I used to go to US when I was a child, all my aunties would proudly comment that "we all wear seat belt here". The fact of the matter is that this voluntary compliance of wearing a seat belt to make your own life safer didn't come just due to regulation.

India is a disaster in road safety. http://articles.timesofindia.indiatimes.com/2009-08-17/india/28181973_1_road-accidents-road-fatalities-global-road-safety is one article mentioning the precarious situation.

Currently it is estimated that around 2 lakh people die on road in India. The problem could have been worse if the traffic was not so bad. Due to congestion in city roads, the speed has dropped drastically, hence leading to less accidents. All the city traffic police in India boast of huge safety improvement. Most of the drop in fatalities in cities are due to show moving traffic rather than any safety law enforcement.

To make people wear seat belts, helmets and drive safely requires a behavioral change. This doesn't come through regulation.

Nothing has a proven effect on impacting a behavioral change in the people. Even in countries which have found success in one change, have miserable failed in bringing about another change.

Peer pressure has an effect on ones behavior but it may boomerang. Say for instance you tell all the residents of a society that most neighbors in this society are environment friendly, are you? Many will change. But it may boomerang if you use the same tactic in another society where hardly any one is environment friendly.

I personally think it is just matter of time and persuasion. Once people get convinced what is good for them, they do it. We just need to persuade them and keep up our hopes.

 

How can lawyers contribute to improve India’s economy?

So in my last blog I mentioned that in the last 25 years nothing “external” has changed India but it is the policies of government and initiative of private enterprise which has made this country. I was thinking hard that what kind of people who change this country faster than others. I thought about Industrial tycoons, investment bankers, doctors, CAs, Engineers, builders, teachers, SMEs and a host of other people. But one thing I realised that most of these people are the effect of economic growth not the cause. I thought about lets evaluate the role of lawyers in growing India’s economy. Do they contribute to cause or merely enjoy the effects?

`Let me start this topic with a divorce case. My house-maid is fighting since 5 year to get divorce from her husband. The allegation: extra-marital affair, cruelty, not giving maintenance etc. The cost?

1.10,000 every year in court fees, lawyer fees alone.

2. The cost of commuting to court every month, the reduction in working days would make up to another 10,000.

3. This is only one side of costs.

These costs would mean approximately 25% of her income from which she has to feed to children and educate them. It’s a severe strain on her finances. Not to mention the absence of a husband in her children’s life because of her inability to marry without a divorce. In fact most of the criminals are from broken families, and timely legal attention may reduce the parental absence for children.

This is not a one off case in the infamous India legal scenario. There would be thousands divorce petitions pending in various courts in India. Whenever I talk about law and order in India people immediately blame corruption and incapacitated police. However in this case there is no case of corruption or police. It’s merely the problem of processes. If the husband’s or wife’s lawyer is not present for 3 consecutive dates, shouldn’t the order be passed ex-parte? Just image the drain on economy such kind of cases would have? Even worse there would be thousands of women who face problem of wife beating, extra marital affair and other valid reasons of divorce but are afraid to take services of lawyer due to the tedious process.

Like the economy theory of “market expansion” due to convenience, people would avail more of lawyer’s service and hence effectively a lawyer’s long term revenues would not suffer. So are India’s divorce rates lower due to arranged marriages or bad legal system?

There is joke: A very senior lawyer’s son joined his practice and in the first month was sent to represent the old case which his father was handling since about 15 years. He was an energetic and enthusiastic lad who left no stone unturned and solved the case in 15 days. Excited he went to his father to give him the good news. The father slapped him hard and said: “idiot that funded your education for all these years now who is going to fund your marriage?”

I would say this clearly represents a “lawyer’s Myopia” in assuming that customer dissatisfaction is not going to harm them in anyway. In fact if you see the rise in out of court settlement in recent years (which media doesn’t report) you see that practically people have lost faith in the judicial system. So only thing that lawyer can do, is take up activities at the bar level to increase customer satisfaction. They will improve their economic condition and also the country.

So that’s something at the micro level. Now let us discuss macro level role which needs to be played in policy making.

Most of the US lobbyists are formed out of lawyers. The policy formation in India is a cryptic process and I don’t know how lawyers could influence that. However let’s take example of real estate scenario.

It is roughly estimated that 75% of a person’s net worth is in real estate. However when he wants to buy a house he has to either get a new one through builder, resale one through a broker or directly from the owner. The only law that regulates all these transactions is the “Indian Contract Act 1872” and host of other acts like “Transfer of Property Act 1882” etc. There is no separate act to govern the builders or the brokers. In fact there is no title guarantee in India it is just title assurance. The government knows that second biggest sector to employ people after agriculture in India is real estate. It leaves not a page unturned in taxing by way of Income tax , Service tax and Wealth tax from real estate. However as far as regulation is concerned, nothing has been done. 130 years have passed since Transfer of Property Act and government is still not clear on title clearance.  What can a lawyer do?

Firstly we need a regulation on title clearance. That will immediately create a huge market for title clearance and insurance for lawyers.

Secondly we need a regulation for builders on Municipal authorities. The builders have to follow norms for safety, accessibility, quality and timeliness. This regulation is already there but municipal corporations should be monitored as usually they are bought over. Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1996 is passed but not enforced at municipal level.  

Thirdly we need a regulation for brokers. In Gujarat you cannot become a driver if you are 10^th pass. However you can become a real estate broker. Now this zero entry barrier has crowded the market with middle men with no value addition and brought down the reputation of brokers. While in developed countries there is a regulation that brokers needs to pass a test and undergo continuous education. We need such a regulation in India. I am sure it will be a lot of work for lawyers to frame and enforce this regulation at each city level.

There was a survey on who would people trust the least? A lawyer, a politician or a realtor. People choose a Politician as the least trusted person. However many politicians are lawyers and hence I think lawyers should work on improving their trustworthiness.

Let’s the research intellectual property rights scenario. There is a landmark case of Apple V/S Samsung. In which it was clear that you cannot steal someone else’s patented ideas. A question is that would such case happen in India? I think not because Indian companies are not investing in R&D.  Assuming Apple was India based, by the time of verdict the products would be outdated and would not even be available in second hand market.

I think India has the talent to make an Apple iPhone. However it lacks the legal infrastructure to protect the patents. The innovations in today’s world are not a product of a single patent but a combination of own, licenced and infringed patents. Typical iPhone today has 200 of its own patent and equivalent of licenced. For example Microsoft earns more out of licencing of its patents to Android phone manufacturers than manufacturing of its own WinPhone.

So in effect if we want to have a huge RnD expense we need a protective IP regime in our country.  Who will bring IP protection to India? Legislation is already there, Copyright act, 1957, Patents 1970, and host of other legislation.

Why not a single public interest litigation on pirated CDs available on street? Why no court action “sou moto” on piracy of software? Why does the government look the other way when there are lookalike products hurting the innovators. Blatant violation of copyright needs speedier conviction.

 

Lets talk about honest people. Law is made to help honest and punish the dishonest. However cumbersome processes just do the exact opposite. On the ease of doing business, India ranks 132 out of 189 countries. The forms, the procedure and the information about it are aimed to dissuade the honest. Try to get a manufacturing business started in India. Knowingly or unknowingly you will break a law or two. Now imagine there are two players in a competitive in market : an enterprise which a high cost of compliance or an enterprise which has a high cost of non-compliance. Which company will be profitable in an atmosphere of non-compliance? Why government bureaucracy has a free hand in increase common man’s inconveniency and lawyers follow them? So much time would get saved if the honest people can comply in an efficient way.

 

Conclusion:

The lawyers should focus on improving their impression and focus on customer satisfaction rather than fleecing the same customer over and over again. If more number of people feel availing services of lawyer leads you to a life long battle then more number of people will approach them. Lawyer can really improve the country just like Mr. Mohandas did not very many years ago.

Will India Ever Improve?

In the year 1988, when I first visited USA, I was 10 years old. Its not a very mature age, but an age when you understand which country is better. Especially you can see the wide roads, tall buildings, good looking cars, TV with 24X7 cartoons (only DD then in India) and a huge Toys R Us store. You can figure out that US is good, in many ways.

It is all but a very tender age to take a decision whether you want to settle there or return. I went there on a green card. At most times since I was born a green card was the most coveted card on this planet. People would sell ancestral jewellery to get hands on one of those cards. (For people outside this planet: Basically residential works permit in USA). So here I am amazed at this wonderful country and in an odd position to take a decision whether to embrace this country or return to the “real” world…

A basic question arose in me which till date a big question. When will India become as developed as USA?

If the answer was that in my life time, meaning assuming I am going to live for say 70 years (average Indian life expectancy), will India improve to a great extent so as to motivate me to return to India and stay back here? About quarter of century later, the question still remains.  

I see a lot of people having an attitude that in India it can NEVER happen. We are too corrupt to build the road. We are too lazy to work. We don’t have the technical capability as the most intelligent people have left the country to work for more money in developed countries. The system is such that no one can achieve what is required. Law and order is a mess and so is the military. We cannot solve Pakistan problem and we are losing Kashmir.

Let us look as some of things which have improved in India, in the recent past.

1.       We have got good looking cars. In fact when Porche and Land Rover opened show room in Ahmedabad, it was like almost everything that automobile engineering could offer was available right there. We have got great indigenous cars from Tatas and Mahindras. In fact we have a full-fledged automobile industry which hardly 10-20% of the countries in the world have. We make our own cars; from scratch. What does this mean to development? More jobs, more export income, increased productivity, reduction in imports and reduction in overall poverty. How did this happen? Well government decided to let it happen!

2.       Roads. We have got roads! Earlier we didn’t have roads, now we have them. So lets not expect wide, well designed, zero bottlenecked, etc for now. We have got fabulous highways. Don’t compare it to US for now, compare it to 1988 roads. I clearly remember our routine trips to visit paternal and maternal grandparents at Bharuch and Surat respectively in rickety Ambassador and Fiat on a two lane highway which was little wider than a single lane. Supposedly “all weather” and usually more crowded than a flea market. The exact same road is smooth, wide and short. It now takes approximately 3 hours less or 50% less overall time to reach Surat from Ahmedabad than before. Of course the modern car makes you less tired also. How did this happen? Government found a formula to fund it.

3.       Public transport.

a.       We have got BRTS in Ahmedabad. It began operation in 2009 and now has 2 lakh people riding on it daily. It has won many accolades and soon will become the life line of Ahmedabad. Even though right now its approx. 75 km long they plan to do it a lot longer. Not to mention that the auto rickshaws have improved also from petrol to CNG; this has resulted in to a great reduction in pollution.

b.      Delhi Metro, a super success on a lot of counts. The best known achievement is time to build. Lesser known include, international quality of trains, affordable cost and on time operation. Running on 200 km it is used by 20 lakh people daily.

c.       How did these happen? Govt thought it was important and allocated money.

4.       Retail stores. At present the retail stores which are available are a world apart from what was available 24 years ago. With our without FDI the malls and the “supermarket” has changed the retail aspect of the economy. How did it improve? I think a lot because of govt’s disbanding of licence raj and somewhat because of higher disposable income. (This increase may be attributed to IT revolution in which govt had no role)

5.       TV : yes with DTH and set top boxes we got all the channels we needed and a few which we never needed. Today India’s TV is as much advanced or in some cases even more advanced than in most countries in the world. Again something what government approved.

6.       We got FM Radio. Again Govt allowed.

7.       One major thing that we got was IT products. That too with nominal duties. So here I am typing my way out on a laptop with i7 processor which was bought from India and which I could afford! Downward revision of custom duty on IT products, again something Govt did.

8.       E-governance initiatives. Something which was unheard of even in the US. Most of the departments of govt have become IT enabled. Income Tax, Excise, Service Tax, Company Affairs, Passport and a lot of others. Unbelievable but true: Government decided to do more, with less.

9.       Higher Education : if 25 years ago I would have said that there will be 52 engineering colleges which will be closed down, people would have branded me as maniac. (I run that risk even now). http://articles.timesofindia.indiatimes.com/2012-10-08/news/34322007_1_aicte-new-institutes-colleges The most surprising part is that these colleges were closed due to lack of demand and not due to any compliance issue. So now we have ample education available. This was not the case before. Of course like any developed economy the “good” colleges are less, like Ivy League in US. How did this happen? Govt allowed deemed universities, self-financed colleges and gave land at cheap rates.

10.   Health care: a huge improvement than 25 years ago. Huge private hospitals, proliferation of clinics, affordable pharmacy and modern machines. Health care in India has not only helped cities but rural population too. This has eradicated a lot of diseases and infact increased the life expectancy, reduced infant mortality, reduced pregnancy related deaths and effectively increased the net working days of an average citizen. How did this change? I would say a combination of govt policy, increased medical professionals, disposable incomes and mother of all : Insurance. Which brings us to:

11.   Financial Services. A few years after I returned from USA I was fascinated by Harshad Mehta and stock markets. I was so excited about stocks that my father thought taking me again to Disney would not make me as much happy as taking to see the Bombay Stock Exchange trading rink. So approximately in 1991 or 1992 I visited the Dalal Street : the wall street of India. Saw the rink, even Harshad Mehta’s office and miserably tried to understand how stock markets operate. Seeing the daily “bhav copy” (price sheet) which mentioned the prices of all shares was really amusing. Imagine a teenager in that setting! A wonderful thing happened in coming few years, National Stock Exchange was set up. And then came the technology revolution in financial services which was not expected so fast. Everything become online! Now how did that happen? I would say it was a combination of private enterprise, government policy, innovations in technology and above all, a booming economy.

12.   Telephones:  It’s a widely known success story of a PSU dominated industry to an overcrowded highly competitive marketplace. The quality of service has improved a lot and the cost reduced. How did it happen? Combination of technology, government policy and private enterprise.

13.   Electricity. It is still a revolution in making. But states like Gujarat and Andhra Pradesh have practically changed the scenario without much of fuss. Reduced T & D losses, gave electricity to poor, didn’t charge much from farmers. What else you need? Well if you say we have power in 24x7 power in cities like Bombay and Ahmedabad, it was not even dreamt in 25 years ago.  A lot was done by govt policy in this regards.

14.   Working Women. So number of working women have increased multifold in India in the past 25 years. The words like Double income, working parents and single mother have entered the Indian vocabulary. How did that happen? I suspect a combination of higher level of education, improvement in law enforcement which increased safety of women and influence of TV can be attributed to this change.

15.   Tourism. India was not very well known for tourism about 25 years ago. However now things are different. We find good tourist places, good hotels and a good number of foreigners visiting India. In fact now its costly to take a vacation in India then to Far East or Middle East! How did that happen? Again Government policy and private enterprise.  

So with so many success stories people still have the same question: Will India ever improve?

India is a democratically ruled nation and as we see above most of the progress we have done is because one day we decided that we wanted to change. One day the government took a call to get the best public transport system to India. One day we believed that we could do it. It was not only the government which enabled the change. It was the private enterprise which believed in the Indian dream and worked relentlessly in changing the country to what it is today. It is not a question of any particular political party. Across the board parties have worked towards the betterment of the country. The people have supported changes and have benefitted from it. It is the same people who are cursed for illiteracy, lawlessness and increasing population, have change this country. Even today India has the same natural resources which it had 25 years ago. Nothing dramatic has changed, yet.

The solution was by the people, for the people, of the people.

Of course the journey towards improvement will never get over. US even today needs improvement in lot of areas. India has a long journey to cover. The only way we can make the journey feel even longer is continuously questioning whether we will ever make it? Will we reach to the destination? Is this the right path? Are a few people benefitting more than the “public at large”?

My point : India will ever improve. Believe it or not.

And what did I do with Green card? I had decided to surrender after 2 years, i.e. in 1990. A conclusive proof that I am a strong believer in the “Indian dream”; ever since I was 12.

Create or View?

Should you create content or just view it?

I heard that in 48 hours as much content is created in this world which was created in the entire world from recording of history till 2003.

So a question arose in my mind, should I create my blog or whatever could have written would have written somewhere...

I thought on that for a few years, until then I several 48 hours had passed and still more content had created. But still what I wanted to write was not written anywhere. If it was written it was difficult to find.

Then one day I saw my cricket friend watching TV. (last Sunday at my home). Then something struck me. If he can play cricket what fun he has watching cricket. So something very basic dawned upon me...

Do I want to become a spectator or an actor?

Watching cricket would make me a couch potato, and I would lead a generally inactive life.  However watching cricket will help me learn from others mistakes and improve my play, which is again useful only if I play.

While playing cricket would make a lot fitter, and may be manage my stress also.

likewise :

Reading content  would make my brain on an input only mode. However it would help me improve the content i create.

Creating content would give the workout to my brain so its not one way flow.


So i decided to start creating content and post it online.

Now i am in :
Facebook, YouTube, SlideShare, Blogger, Twitter, Pintrest and what not.


I would recommend to you too, create some content. for every 10000 words you read, write 1 word. Its not a difficult target, if you start.