Prime Minister Manmohan Singh’s lecture at his Alma Mater, Cambridge University on October 11th is subtle and yet he managed to touch on poverty, globalisation, reorganising the global order through institutions like the UN and creating a more level playing field in world trade through free trade and non protectionist policies by the developed world. The lecture can be read here.

He quoted Nehru (not someone I like to quote often) in a speech in 1949. It is interesting that still holds true!

Prosperity, ladies and gentlemen, is not divisible. Neither is global peace possible without the eradication of poverty. As Jawaharlal Nehru said in his address to the Canadian Parliament in 1949:

“There can be no security or real peace if vast numbers of people in various parts of the world live in poverty and misery. Nor can there be a balanced economy for the world as a whole if the underdeveloped parts continue to upset that balance and drag down even the more prosperous nations.”

He urged his audience at Cambridge to understand the deep impact of prosperity on peace and a stable world order. A message that is most relevant in the world today.

Indian government has banned child labour. Again. For the third, or perhaps, the fourth time. Under the new ban more activities have been listed as hazardous for children.

Now if child labour was so simple a problem that it could be solved with a ban, we wouldn’t need four attempts. So what is really the cause of child labour? Don’t all parents want their children to be happy and free from employment?

There is a clear link between child labour and minimum wages. The minimum wage sets a standard high causing unemployment among adults forcing them to send their children to work. On the demand side, since no minimum wage is required for child labour, employers prefer to employ underage workers. Kaushik Basu has a far more eloquent explanation for the same.

Secondly, the alternative is to educate the child which is not a real option for most poor parents given the quality of government schools and the high fee of private schools. So the real challenge and solution is to create and incentive structure to attract parents and students to schools as opposed to sending them to work.

Schemes like the Mid-day meal and Akshaya Patra would have a far greater effect on reducing child labour than just banning it. These schemes make it cheaper for parents to send children to school since they provide at least one meal a day alongside providing education. Other schemes like providing students with bicycles in Tamil Nadu also help in increasing access to schools and reduce child labour.

The magic, as always, is in providing the right incentive structure and banning child labour merely changes the law and not the incentives.

Last week I heard something on the news that really made me laugh. Which is quite a change from the usual irritation I feel when I see what our government has been up to.

The Ministry of Health has declared 90% of street food unfit for comsumption. So it proposes to start a new program where it will train all the street vendors in basic hygiene and cooking. The general plan is that at the end of this program the vendor would get some kind of certificate or licence which is required to sell food off the street.

So now we cannot eat food unless it is approved by the central Government!

All this from a Ministry which cannot control or report an epidemic accurately.

I have never been impressed by the leftist bandwagon which is perennially fighting the giant corporations. I am also not a big fan of Morcha’s against these large corporations when they plan to come and set up shop in India.

India is finally creating SEZ’s which hope to repeat the magic of China’s SEZ’s. For a detailed analysis of this new economic policy read The Economist. I am largely happy with providing such incentives and inviting foreign investment to India especially for developing infrastructure.

However as far as the POSCO deal is concerned, well that is what I am, concerned. This Korean company has struck a deal with the Orissa government for the creation of a special economic zone for POSCO where it will set up a large steel plant as well as develop and operate a major port. More on the deal here.

The trouble is the state government has promised 4000 acres which it doesn’t own.

The land is going to be acquired by the state government from about 100 villages, mostly agricultural, and no rehabilitation package has been announced for the villagers whose land will be acquired.

The reason for this is that in India there is no fundamental right to private property, there is only a legal right to private property. This fundamental right was abolished by the 44th amendment in 1978. Hence it is far easier for the government to acquire land often without paying compensation.

Many feel it is often justified for the government to acquire such land for public projects such as dams (as is evident from the Sardar Sarovar project), highways etc. However the POSCO deal is nothing more or less than taking land away from the poor and giving it to the rich under the utilitarian pretext of creating more employment and growth for the whole area.

This is a typical example of the government taking away the rights liberty and property of the “little people”. It reminds me of Justice Sandra O Connors dissent in Kelo v City of New London where she said, “Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory”.

The POSCO deal is an excellent example of what we call abuse of government power of eminent domain. Finally what we see today is not a step towards growth and development but two steps away from the right to private property and economic freedom which is the foundation for any long term growth and development.

I already blog with a few friends on various issues at Distributed Intelligence.

But I though, perhaps, I needed to write something on India each day, just to keep my sanity,hence a new blog.

These are interesting times to be in India.

We live in a world, mostly painted red.

People file PIL’s for everything from deciding if the garbade must be disposed to whether the PM should hold office.

We grow despite what the government tries to do ever other day.

We are the most interesting, ecelectic people whose spirit is unmatched.

Hence this attempt to chronicle the times of these people. Godspeed.