Indian Economy

As we had often come back to discussing economic benefits/impact of sports I thought it was about time for an economic discussion forum.
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Re: Indian Economy

Postby jayakris » Sun Jun 03, 2012 6:05 am

No arjun, no amount of middle class growth would help. They can care deeply all they want, but will not get what they want whomever they elect, because the constitutional set up in India gives the elected people very few tools to get things done (so they just make money and go away till other worthless worms come in to do nothing again).

The other perennial hope Indians had always had was that a higher education level will help. The biggest falsehoodout there. It CERTAINLY is of not much use. if you want proof, you only have to look at Kerala which has been highly educated and close to 100% in literacy for some 25+ years. The worst governed state in the world, for that level of literacy and social awareness (and a large middle class too). The people get nothing they want, have never had a way to get what they want, and the state has among the lowest per capita GNP in India too. Anybody who can do anything productive mostly just leaves that Godforsaken God's Own Country. Most of my thoughts have come from simply observing Kerala everytime I have been there, and how things do not work anywhere near they should, considering the people's understanding of things. There is no question that it is the useless exceutive machinery implemented by the Indian constituion that causes that well-known anomaly in world economic development literature (The weird "Kerala Model"). Some things in Kerala are a bit better than the rest of India (example: people do spend money on their own toilets and you see much fewer people sqatting by rail tracks while on a morning train - but this happened with NO government action), but many things are worse too.

I do not understand everybody's deep belief that geatness will somehow happen from a copycat document that we have lived with, and hardly ever allowed to be modified in any fundamental way by capable people in India who can do it. The founding fathers did the best they could in a couple of years then. 60 years later, we need to really do some serious introspection, because we are out of excuses on why our country is this backward.

Jay

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Re: Indian Economy

Postby Atithee » Sun Jun 03, 2012 6:53 am

Constitution again? Please Jay. I thought this had been put to rest by you some months ago. You cannot blame a document. Period.

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Re: Indian Economy

Postby jayakris » Sun Jun 03, 2012 7:16 am

I am really not "blaming the constitution". I am blaming all of us and our politicians for not trying to improve it or modify it. How can you blame a document anyway? We made it, and we live by it. Blame is all with us for not looking more and analyzing what parts of it aren't working. In my view, a key part of it doesn't. I am trying to elaborate that part.

Well, what other explanation do we have for what the real problem in India is? Don't tell me that Indians are substandard people in intelligence, or are of less integrity culturally, or are lazy people, or anything. None of such explanations seems to wash. But we as a country do the dumbest things very often, have among the higher levels of corruption and really have low (general) productivity levels on most measures of it. Why? What other explanation is there, except the system that we set up for ourselves?

There is nothing to put to rest in this. Of course, it gets annoying, I know. But till somebody gives me some counter arguments or alternate explanations of why India is like it is, I have no choice but to keep coming back to it.....

Jay

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Re: Indian Economy

Postby Peter » Sun Jun 03, 2012 1:22 pm

Analysis: India's growth: policy paralysis

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Re: Indian Economy

Postby Atithee » Sun Jun 03, 2012 1:27 pm

Jay, but how? You have never articulated it. If you cannot explain how it is bad for India, try explaining how another one has helped a different country. The S. Korean example was not proof of this theory -- I did not read the Dr. Hussain's article.

I still do not know who the executive machinery is. Who the system is. Why voting someone out is not a measure of punishment for failure (i.e. lack of accountability) even though they get replaced by equally inept looters and why are the voters not responsible for perpetuating this cycle? Why are we electing more dynasties now (Yadav, Patnaik, Reddy, Badal, etc.) while at the same time being angered by the Nehru-Gandhi perennial leadership? For sure, this selection preference is not constitutionally mandated.

Are you saying that states need more autonomy? At least we could have a discussion then. Just because you do not think that education and democratic process are unable to right the ship, it does not mean that they are myths.

If you tell me what part of the constitution is to blame, perhaps I can see why is it in politicians' interest to not pursue amendments. But, as long as amendments are allowed, constitution cannot be blamed for the failures just because we have no other explanation.

Personally, I feel that the population (which somehow is now considered India's strategic "human capital" advantage, at least vis-a-vis China) and our diversity are our biggest enemies. Of course, the first one enables the second to survive and bloom. In fact, I would rate our regionalism (aka diversity) the root cause of our failures and this is where our constitution may shoulder the blame. I will read the document and see if I can find reasons to agree or disagree with your assertions. I hope it is not a 1000 page document.

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Re: Indian Economy

Postby Atithee » Sun Jun 03, 2012 1:52 pm

Peter wrote:Analysis: India's growth: policy paralysis


Sorry Peter, nothing new here. I've read a lot of such articles since the precipitous decline of Rupee in the last few months. But thanks for the link.

I'd like someone to help me understand how our diversity is helping. I think it is killing us. What I like about S. Korea is their "Han" spirit. We just do not have a national spirit. We have way too much regional and sub-regional aspirations that thwart any national growth. It is an epidemic and it is getting worse. May be it is the god damned constitution after all.

"Unity in diversity" might have been required at the Independence Day to bind a nation, but I see that the tested "Divide and conquer" British technique working in practice and holding us back, way back.

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Re: Indian Economy

Postby jayakris » Sun Jun 03, 2012 4:37 pm

Atithee wrote:Jay, but how? You have never articulated it. If you cannot explain how it is bad for India, try explaining how another one has helped a different country. The S. Korean example was not proof of this theory -- I did not read the Dr. Hussain's article.

Why do you say that the specific item I mentioned about S.Korea (on Civil Service remunerations based on performance) as irrelevant? And yes, please read that Hussain white-paper, because it lists out a lot of details. Really, the issue is in some of the key details that make the governance machinery responsive to people's wishes, as effected through the elected people.
I still do not know who the executive machinery is. Who the system is.

Basically all the people who hold a job paid for by the government are part of the exeutive machinery, in some sense. Some parts of the machinery are much more important in governance though (i.e., a Govt school teacher is much less part of governance compared to a PWD engineer who maintains the govt buildings). These are not elected people, but the control of this machinery is supposed to be with the elected people. Unfortunately, it really isn't. At least in most of its working. The machinery moves on rather independently because most levels of the machinery do not deal with politicians at all, and the govt employees salries, performance, promotions, ego-based power, etc, are hardly controlled much by elected people. In fact some constitutional amendments like on article 311 (on who can demote a Civil service personnel) have only curtailed the politicians' ability to make the govt workers pay for lack of performance. Not the other way, which is what we really need, for people to have power and for better people to be in politics.
Why voting someone out is not a measure of punishment for failure (i.e. lack of accountability) even though they get replaced by equally inept looters and why are the voters not responsible for perpetuating this cycle? Why are we electing more dynasties now (Yadav, Patnaik, Reddy, Badal, etc.) while at the same time being angered by the Nehru-Gandhi perennial leadership? For sure, this selection preference is not constitutionally mandated.

Exactly :) ... Yes, the voters are responsible for the cycle, but there needs to be a mechanism to help them out a bit and give them the hope that they could ever get anything they want. If not, they just go by the simple pet national or state themes (religeous, casteist, etc) and all the hype about how certain personalities or dynasties help them. When nothing else CAN help them and they know it, what is their option? They need to see politicians' being able to bring about changes and improvements on things they care for. Like water, education, social equality, infrastructure, sanitation, power shortage... As they never see any of that happen because it is not easy for that to happen even with some capable/honest politicians they may have elected, is the fault with a the voters, when they just go by the simple emotional items while voting?
Are you saying that states need more autonomy? At least we could have a discussion then.

YES SIR. Well not just at the state level, though that is a start. We need much much more local level autonomy, with significant taxes and spending controlled locally on a lot of detail issues that people care for (like what I listed just above). The Indian administrative system was set up for the British to collect taxes and not really to execute local projects. Hardly much change on the sizes of administrative units even now. The elected people with any power at all, are also representing much larger populations and areas than they should. That needs to drastically change.

Peope ask why roughly the same constituitional schemes works in England, and not in India. They think it is because of education and economic level etc, but I beg to disagree. Check the size and population of the constituencies that the 500 British MPs are elcted from. About 1/10 to 1/20th of what it is in India. Even smaller than our state MLA constituencies. But the states have much less power and only control portion of the taxes to play with. More control on money locally, means more power to those who are elected to control it. SIMPLE.

Do our blocks and panchayats really have enough money to work with, to implement local projects? No, because only a very very small portion of what people pay in taxes get under the control of such bodies. Same even with cities. Much much more local control is needed so that people can see who is doing what for them and who their bosses are (the MLAs and MPs who come above those local guys).

Then you have the civil service, and government highway departments, medical services, police etc. No idea at all for the voting public on who these people report to, and what true power the local electd people have on these guys. Their performance and salaries are not based on anything that the local public really has an opinion on.

Compare those things with the governance in a place like Britian, with people clearly seeing what their Parrishes , Counties and Cities are doing. They do SEE that their voice counts.

Much more decentralization and local governance is needed first, for things to get done, and up the chain it goes to district, state and national levels, with people having a sense of which elected people at each level are producing results through the proper management of the "executive chain". If you tell me that Indian people are uneducated to know all this, then I will say that THAT ELITIST ATTITUDE *is* what is killing us. Sure, the politicians and media willt ry to fool them, but that is part of all political systems and they do that now anyway.

So yes, you got the idea right about more autonomy. But just giving the states more power does not help. Need to set up the local systems better and FORCE the state politicians to transfer that power to various levels below them. Right now they can't really transfer much power (and financial control) to somebody below to get something done, even if they want. So, even if the states are allowed, say for argument, the control of ALL taxes paid by the people of the states, it won't work. It needs to start with changes bottom-up with proper checks and balances to put in place "accountable power".
Just because you do not think that education and democratic process are unable to right the ship, it does not mean that they are myths.

Well, I gave the example of a "not working" state where education and complete awareness of the democratic process haven't done diddly squat.
If you tell me what part of the constitution is to blame, perhaps I can see why is it in politicians' interest to not pursue amendments. But, as long as amendments are allowed, constitution cannot be blamed for the failures just because we have no other explanation.

Again, don't get emotional about the "hallowed constitution" and think in lines of my "blaming it". Just be practical and see what needs to be changed. Indian contitution is not THAT difficult to amend, but unless leadership comes from somewhere and a proper awareness of the real issues is built up, nothing of importance would ever be changed. I am not an expert, but I believe we have not made much change to allow true power to elected people - especially in performance based rewards and promotions etc of the workers in the givernment machinery. Some of those brutally practical details are what hampers India, from all I can see and read. But none of this is ever discussed in India and we go to emotional rants about corruption and all that...
Personally, I feel that the population (which somehow is now considered India's strategic "human capital" advantage, at least vis-a-vis China) and our diversity are our biggest enemies. Of course, the first one enables the second to survive and bloom. In fact, I would rate our regionalism (aka diversity) the root cause of our failures and this is where our constitution may shoulder the blame. I will read the document and see if I can find reasons to agree or disagree with your assertions. I hope it is not a 1000 page document.

Diversity is of course an issue. But not the biggest culprit. Size is a real issue. Our systems are archaic, to handle the size issue. We really did not think this through well enough (in my VERY humble opinion) when we set up the constitution. Needs specific work to bring about much more local political power in governance. All the way from village/panchayat, and block level. Much needs to be done.

Jay

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Re: Indian Economy

Postby Atithee » Sun Jun 03, 2012 5:52 pm

Jay, as is usual for me, in your replies, as soon as I think I am starting to understand, I lose it. You wrote a lot, but I didn't gain a better understanding. If I have to read something 2-3 times to even understand what the message is, it is too complex for me. Sorry. OK, I read it again and do get some of it now. However, I am not sure if constitution is that detailed or specifically disallowing power to be transferred to lower levels. I need to research this more. Sorry about my my impatience.

You ask me to get away from my fixation on the constitution. You start letting go of it. Then, BAM, you drag it back in.

How do you give more power to people in a democracy? I assume one could directly elect every single appointed position at any level in the "government machinery." If everyone is "executive machinery" then, you cannot change everyone in one fell swoop. We need to start somewhere small. However, I think, with the digital age, we should, and will, see more and more direct vote on many issues. If not in India, then elsewhere, but surely.

Anyway, I am convinced that our regionalism is our biggest enemy right now. You cannot convince me otherwise. No one can.

No more from me unless you start holding constitution overtly any more responsible than you do now. :D

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Re: Indian Economy

Postby jayakris » Sun Jun 03, 2012 6:30 pm

Atithee wrote:OK, I read it again and do get some of it now. However, I am not sure if constitution is that detailed or specifically disallowing power to be transferred to lower levels. I need to research this more. Sorry about my my impatience

No problem; I figured you would read it at some point :) ... I really had to paint a broad picture to be able to make a case for what I am saying, and had no way to do it in short sentences. Having given the long version of it, there is less danger now in giving a smaller version though.

Simply put,
(1) we need smaller political constituencies where we elect people whose work we can see.
(2) Then for them to do the work, a proper power structure (through financial control, which is the key) is needed for the lower level elected politicians to influence the paid employees and their projects/activities for the government.
(3) The politicians need to have a say in promotions, salary etc, of the workers - to get them to get things done.
(4) The govt employees' rights need to be STRICTLY safeguarded.

The Indian constitution, from what I can see, is quite strong on item 4, but not on the first three items. Some of it started from item (1) which could not be changed much at independence time from the administrative and political subdivisions the British had set up. (2) and (3) cannot be done well before tackling (1) properly. We do have smaller units within MP and MLA constituencies and the novice thinking in me says that simply making additional laws for the sake of (2) and (3) may prove sufficient to put in place the needs of (1) through panchayat/ city/ block elections...

But devolution of power to lower levels is something the shortsighted politicians would not take up, even if it ultimately would make them more powerful with control of the lower units (both lower politcal constituencies and lower levels in the paid government work force). That is the current problem. That is why awareness need to be built up on the issue.

I am led to believe that our constitution and its amendments probably already have enough for (4), in theory. But the legal system may need much revamping to ENFORCE item (4) better, because there are grave dangers otherwise, if we somehow manage the reforms needed in items (2) and (3). Prosecutorial schemes need to be better. That may lead us to people's having to get a say in the judiciary in some form (though I don't subscribe to direct election of public prosecutors like in the USA). Currently the judiciary in India is not accountable to the people much, as far as I know.

Jay

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Re: Indian Economy

Postby kujo » Sat Jun 09, 2012 5:18 am

jayakris wrote:The voters do not even start to think of why there is such severe water shortage everywhere in India, which is not such a low-rainfall country, and has people who hardly need even 1/3rd of the water used in most developed countries per capita. Or why we do not keep up lane or edge marking on roads after spending 100 times as much to lay them. They never think why Indian football team hardly has 2 decent stadiums to schedule international friendlies. Or why we run trains with toilet sh** dropping on the rail tracks. They are all assumed to be things nobody can change...


Here is your guy Jay: I spend 18 hours on toilets alone: Jairam Ramesh

Amid the controversy over Rs 35 lakh expenditure on Planning Commission's toilets, Union Minister Jairam Ramesh has quipped that he himself spends '18 hours of a day on toilets alone'.
"I believe the biggest issues in front of us are malnutrition and toilets, these are the two faces of one coin...

....

He said Railways is "another big headache for us."
The issue of manual scavenging is related with daily railway traffic and "we have to tackle this also.

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Re: Indian Economy

Postby jayakris » Sat Jun 09, 2012 6:48 pm

Does he mean that other people do not go to toilets "alone" and go in groups? Just wondering...

The guy is a big talker and nothing more, basically. But, it is good that these things are getting talked about, since the latest census. People thought we have been making some huge progress, and everybody realizes now that the big "resurgent India" business over the past deacade did not fundamentally change things much. It wouldn't. It couln't. It can't and it won't. The mechansims are awfully inadequate for that, and there are structural issues that cause the mechanisms to remain inadequate. THAT was my point in all the posts that I was writing above.

Jay

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Re: Indian Economy

Postby PKBasu » Mon Jun 11, 2012 9:51 am

I'm surprised, Jay, that you think that India has TOO LITTLE scope for politicians' interference in executive decision-making. I think we have too much of it. A legislator is supposed to legislate, and the executive to implement the law (as laid down by past legislatures, including the Constituent Assembly). Nowhere in the world is the legislature completely in control of the executive -- which would be a disaster from the standpoint of administration. The closest is the system of referenda in Switzerland (where most power is devolved to the cantons, and decisions are often made by referendum rather than by the legislature). It has worked OK for a country with 6 million people (3 Lok Sabha constituencies!), but larger countries clearly demarcate legislative and executive roles.

India has made quite spectacular progress in the past 20 years -- perhaps Kerala and West Bengal being the exceptions. But even in rural north Bengal, I notice that the once-ubiquitous bullock-cart no longer exists; it has been replaced by the cycle-cart (and the occasional, but very rare, wheel-barrow). I am not entirely sure of Bihar/Jharkhand (although north Bengal's economy and ethnicity is closely linked to those two states), but the obsolescence of the bullock-cart in most of India (after 4-5 millennia as the main form of rural transport) does represent quite dramatic progress. The other clear sign of progress is that there are some 650 million cell-phone subscribers in India; accounting for middle-class people with multiple subscriptions, I think about half the people of India (and probably 70-75% of all households, if not more) have access to telecommunications. This is quite remarkable: in 1994, there were just 7 million telephones in India, now India adds 15 million new cellphone subscribers every month. Similarly, India now exports about 3 times as many cars (and produces about 20 times as many cars) annually as the total number produced annually in 1991/92.

We shouldn't gloss over this remarkable progress. Any visitor to Hyderabad, New Delhi, Bangalore, Pune, Ahmedabad cannot ignore the spectacular progress that has occurred. Of course, urban planning is one of India's banes -- and Mumbai remains a devastating eye-sore. But other state governments (including those of poor states like Chhattisgarh, Orissa and Bihar) are getting much accomplished -- despite the paralysis of governance and policy-making at the Centre under UPA-2. I don't think the Constitution can be blamed for the lack of progress in crucial areas of governance -- and the rapid rise in corruption in the past decade (and especially under the UPA regime).

I agree that we shouldn't have accepted the British blueprint of 1935 as the basis for our Constitution -- including such retrograde elements as caste-based reservation (a profoundly anti-democratic principle, as I discovered when searching for a potential constituency in the area I grew up in, only to discover that they were all reserved for STs or SCs). And we should have reformed the bureaucracy -- moving it away from a colonial mindset to a more developmental one at Independence. But political interference in administration is, to my mind, a bigger problem in India partly because administrators have increasingly become more venal (partly because the incentive structures were skewed by the poor pay of civil servants until the 1990s, and their still relatively poor compensation relative to rewards available in the private sector). What is quite remarkable about today's India, actually, is the strength of key institutions like the Supreme Court, Comptroller & Auditor General (CAG, the key office that has broken almost every scandal in the past 3-4 years), CEC (under current head SY Qureshi, and most other past heads apart from the loathsome Navin Chawla), and the RBI (under most governors, with the partial exception of the current one in his first 2-3 years).

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Re: Indian Economy

Postby kujo » Tue Jun 12, 2012 2:26 pm

PKBasu wrote:India has made quite spectacular progress in the past 20 years -- perhaps Kerala and West Bengal being the exceptions. But even in rural north Bengal, I notice that the once-ubiquitous bullock-cart no longer exists; it has been replaced by the cycle-cart (and the occasional, but very rare, wheel-barrow). I am not entirely sure of Bihar/Jharkhand (although north Bengal's economy and ethnicity is closely linked to those two states), but the obsolescence of the bullock-cart in most of India (after 4-5 millennia as the main form of rural transport) does represent quite dramatic progress. The other clear sign of progress is that there are some 650 million cell-phone subscribers in India; accounting for middle-class people with multiple subscriptions, I think about half the people of India (and probably 70-75% of all households, if not more) have access to telecommunications. This is quite remarkable: in 1994, there were just 7 million telephones in India, now India adds 15 million new cellphone subscribers every month. Similarly, India now exports about 3 times as many cars (and produces about 20 times as many cars) annually as the total number produced annually in 1991/92

Those two items are counted as progress definitely, but wouldn't say dramatic progress. Among the top 4 dramatic progress items that affect a nation's productivity, sense of well being and confidence:
1. transportation and it's associated infrastructure - within cities & inter-city highways
2. health & sanitation - affordable & quality hospitals, sanitation facilities in public places and at homes
3. public administration (police, government offices, courts) - can continue to run at a slow pace, but can not continue to be so corrupt!
4. a number of other items including defense, trade, finance, communications, internet access - in all of which, we are progressing okay but not dramatic


As for the bullock cart part, look at the latest photo of monsoon: http://www.thehindu.com/news/national/a ... 520038.ece
A minimal progress to happen here, is to use an inflatable tire rather than those wooden wheels with metal rims. so much more efficient!!

kujo

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Re: Indian Economy

Postby PKBasu » Wed Jun 13, 2012 10:07 am

Sad to see Assam is still behind north Bengal (which is really part of the same seamless economy)...IF that is truly a photograph taken yesterday by the Hindu, rather than a 10-year-old photo recycled.

I agree on most of the other points you make, kujo. We have been disgraceful on public sanitation -- as I have said quite often in the past here. The failure on this count is abject, and almost unmatched anywhere else on earth. Our governments -- especially Congress governments -- have a lot to answer for on that front.

Broadly, the quality of transportation has improved dramatically, however. Highways and roads are remarkably good in many urban areas -- especially compared to what existed in the past. I remember thinking -- when I went to visit the Hyderabad airport construction site -- that the airport would be great but the road connectivity to the city would be a disaster. But now there is a spanking new expressway connecting the airport to the city. Ditto for Bangalore. And Delhi is simply extraordinary: at the height of the monsoon, I was able to make it from Connaught Place (Nandan Nilekani's office, as it happened) to the airport in 24 minutes flat. With its metro, tree-lined roads, well-planned flyovers and paved pavements, New Delhi is really a world-class city now. Mumbai, though, is an urban nightmare. Once you get to Navi Mumbai (Varshi --sp?) or Powai, it begins to improve -- and the Mumbai-Pune expressway is marvellous (as is Pune itself).

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Re: Indian Economy

Postby PKBasu » Wed Jun 13, 2012 1:10 pm

The devolution of power from the centre to the states has occurred almost automatically through the democratic process. The failure of central governments over the years gradually eroded the Congress' hold on the states, and strong regional parties have figured out how to keep the Centre at arms' length while pushing ahead with whatever is necessary to get things done at the state level. And voters have increasingly rewarded those who get things done effectively. That is what ensures that India progresses despite the hopeless dynasty that has captured the Congress party in the past 43 years.

Let me hasten to add that dynastic rule per se isn't the problem. It is the crushing of institutional process in the Congress by that family that has truly emaciated India's politics. Democracy ends at the gates of each of our political parties. That there is an element of dissension and debate in the BJP is actually a good sign - although it is reported negatively in India's press. But even the BJP doesn't allow real democracy: Gadkari, Rajnath Singh, Bangaru Laxman were all picked by the RSS; Yedyurappa is being kept out as CM of Karnataka despite having overwhelming support in the legislature party, etc. All other parties in India are vehicles for individual politicians (and eventually their families). The interesting ones are BSP and Trinamool -- where the leaders have no families. (But Mamata has already given her Lok Sabha seat to her nephew, so an element of dynasty has already crept in there). Indira Gandhi invented the individual-focused party machine (and the dynastic principle as succession mechanism). The others have copied her -- and many are actually direct offshoots of the Congress. Other parties came and went because they didn't focus enough on the cult of personality: the Lohia socialists, Swatantra, Congress-O, Janata Party, Janata Dal (and its offshoots). To a limited degree, the remaining "children" of the Janata family have an element of institutionalization -- BJP, BJD in Orissa, JD-U in Bihar (and pockets elsewhere). BJD is dynastic in a sense, but Naveen has tried to build a party and a state.


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