EMBEDDING VALUE SYSTEMS IN GOVERNANCE THE– WAY OF INDIAN DHARMIC HERITAGE

                                                                                                                          

MANAGEMENT AND VALUE FOUNDATION:

Management and reengineering concepts are not new to Indian ethos.  The Vedantic wisdom is cherished through the insight and experience of our sages in the manas-budhi-ahankara interface.  The value-foundation for the Indian system is based on the three Principal Values or Ultimate Realities - Goodness, Beauty and Truth, as enshrined in the Rig Veda ⁽¹⁾

           

            Viswa_ni De_va Savitu:

                        Durita_ni Para_Suva

            Yadram Bhadram Tanna A_Suva|

It means "Savita ! God ! Send far away all evil; Send us what is good ⁽²⁾

            A-gaso_A_diye_De_vasya Savitu: Sarve_

                        Viswa_Va_mani Dhi_Mahi

           

Again the Rishi says:

"Sinless for noble power under the influence of Savita, God.   We contemplate all that is beautiful. "

Indian texts delineate the link between management and values which provides the base for the organisational or societal function.  It is very different from the skewed principles of corporate governance, with emphasis on profit orientation to the exclusion of ethics, environmental needs, quality needs etc.  Hitopadesa says "Getting a deserved object from an undesirable source is not a satisfying practice.  But at the same time, adventure and risk taking are positive values".

Thus the management deliberately makes the choice of goodness, beauty and truth.  The value system is so lofty that Veda states that truth, not even God, is the one which upholds the earth. ".(Rig Veda X 85.1)

Much earlier to the Christ spurning the material offers of tempting Satan and telling him, "Get thee behind me !  Satan" the young hero of Kathopanishad, when persuaded by Yama to ask for material pleasures and long life, wants the Eternal Truth only and turn away the objects of ephemeral and sensuous pleasure.  There is no crisis of meaning and purpose in the minds of our forefathers.  While artha and karma are given their due place in life, dharma is considered to be the over riding factor. ⁽³⁾

            Tasma_dtha_rcca Ka_ma_cca

                        Dgarm E-Vo_Ttaro_Bhave_t

            Asminlo_ke_Paro_Caiva

                        Dharma_Tma_Sukhame_Dhate_||

Western Thinkers treated the people-oriented values, work oriented values and spiritual values in separate compartments.  The managerial value system like achievement, efficiency responsibilities, responsiveness etc. have been treated as means to establish competitive edge over the Competitor.  In the beginning, the impact of the spiritual values in managerial cultures had not been properly appreciated in the West.   Only the phenomenal success of Japanese industry made the West to look at the zen Values that shaped the holistic cultural milieu of Japanese industry and society.  These aspects have been dealt with at length in our heritage texts much earlier.

The 16th chapter of Gita explains the do’s and dont's of the ethical divide.  Those who do not know this are described as asuras.  The need to unfailingly follow the path of probity is emphasised thus ⁽⁴⁾

Pravrttih ca Nivrittim Ca

                        Ja_na_ Na Vidura_ Sura:|

            Na Soucam Na_pi Ca_ca_re_

            Na Satyam Na Satyam Te_Shu Vidhyate

The wise executives follow the codes and rules with implicit faith and do not deviate from it, like a cart proceeding in the nominated and treaded path.⁽⁵⁾

            Re_kha Ma_trmapi Kshan Na_T

                        A_ Mano_rvrtmana: Param |

            Na Oyati_Yu: Praja_stasya

                        Ni yanturbhavruttaya:

           

CHANGE MANAGEMENT AND VALUE SYSTEMS:

While the time-tested basic codes of conduct are the substratum, change is recognised as an inevitable part of life in a dynamic society.  Change Management and Re-engineering are also properly delineated in the Indian Heritage texts.  There is no empty rhetoric.  The sincere desire to produce work-output with no empty words, and not employing concepts and tenets couched in difficult semantics, is indicated in the prayer of Raghuvamsam.  Kalidasa prays to the Cosmic Parents who are united like "word and meaning" to bless him with a combination of both. ⁽⁶⁾

            Vagartha_ Viva Sampraktau

                        Va_garta: Prati Pattaye_ |

            Jagata: Pitarau Vande_

                        Pa_rvati_ Paramesvarau ||

The Sanskrit ethos emphasises values rooted on the tripod of Reason Feeling and Deeds.  Even while the need for a professional to make money is recognised, Nyaya, Daya and Karma are given the highest place.  For instance, for a doctor whether he gets  paid or not, the treatment of patients never goes without fruit.

Cikitsa Na_sti Nishphala

But the fruit may vary from situation to situation - it could be punya, friendship, fame, knowledge and experience.  This is also highlighted in verse 769 of Viswagunadarsacampu in the reply of Visavasu to the cynical comments of Krisanu.  Later Visavasu also explains the appropriate place given by the government servants in properly executing their public duties while maintaining their private and religious life properly tuned ⁽⁷⁾

           

Asubha Pushi Kala_vanya Pramatta: Swadharma:

                        Anudinauka_ra_na_caranto_ Budha_na_m

            Bahujanapari Pushyai Baddhadi_khasta Ye_te

                        Tanusu khamapi Hitua_ Tanvate_ Ra_jasva_m ||

The value plays an important role in shaping the quality of leadership and the power of influencing others.  Leadership means setting the right example - A good example is given in Hitapadesa where Citragreva, the king of pigeons refuses to allow his friend Hiranyaka, the mice king, to sever his bonds first, but insists on the release of his subjects first "They bear an equality to me as regards kind, substance and qualities, say, then when and what will be the fruit of my being their Lord ?"

Ethical and moral dimension are also given great importance.  Business schools, after the tell-tale scandals of Enron, ATT and the replete storms of unethical behaviour of high officials in Capitol Hill as well as in our own Bharat have woken up to the need for re-engineering the management ideas and behaviour to factor in ethical values and the need to not merely to raise student's awareness of the problem but also to provide the criteria for determining ethical business behaviour in situations with conflicting values.

Why does the value system break down or why do people get dragged towards sinful activities ?  Krishna, in Bhagavat Gita explains that it is due to the twin qualities of desire and anger emanating from Rajoguna. ⁽⁸⁾

Athake_na Prayukte_yam Pa_pam Carati Purusha:

                        Anicchanno_pi Va_rshne_ya ||

The role of ethics in corporate life has been vividly explained by Abraham Zaleznik and Konosuke Matsushita in "The Managerial Mystique restoring Leadership in Business" 

SYNERGY IN HERITAGE TEXTS:

Chester Barnard, in his seminal work, "the functions of the Executive" attempts to provide a comprehensive theory of cooperative behaviour in formal organisations.  The spirit of cooperative endeavour is delineated in the 10th Mandala of Rig Veda in the Purusha Suktam.  It was a great cooperative endeavour undertaken with profound devotion by the entire community.  Here a symbolic yagna was performed, out of which the created beings and natural beings took their form.  Thus the purpose of the endeavour was merging totally their individual minds with the total mind or cosmic consciousness.  This represent what Zalemik later termed as "Spontaneous cooperation".  This is achieved by reducing the proportion of pravrithi and increasing nivrithi.  Thus the process of realizing unity in the midst of differences and ekatmanubhuti is achieved.  This is the basis for what later managerial scripts call synergy or Stephen - covey's "win-win" attitude.

The greatest political and practical thinker of Indian heritage Kautilya himself, in the concluding portion of Arthasastra observes that the purpose of his work is to bring together spiritual good, material well being and happiness.  Thus, spiritual good is the foundation upon which material goodness and happiness are based.  The purpose of state must be the welfare of the people.  This is exemplified in Sakuntalam ⁽⁹⁾

           

Pravartata_m Prakrutihita_m Pa_rthiva:

                        Saraswati_ Srutamahata_m Mahi_yata_m ||

ESPOUSED-THEORY IN INDIAN HERITAGE:

Peter Senge makes a clear distinction between espoused theories and theories-in-practice.  Often blind adherence to theories or rituals leads to considerable loss.  A dynamic change consciousness is essential.  This is exemplified in Srimad Bhagavatam.  When young cow-herds sent by Krishna to get food approached the brahmins performing "Angirasa Yagna" for accession to heaven, they were refused food by the brahmins.  But the wives of the brahmins, intuitively realising the Divinity of Krishna, came rushing to him with offerings.  Eventually the brahmins, realizing what  that they had lost due to their dyed-in-the wool adherance to rituals, cursed themselves - their three-fold birth, learning, vows of continence, pedigree etc. which made them impervious the touch of Divinity. ⁽¹⁰⁾

            Dhig Janma Nastrivruda vidhya_m

                        Dhig Vratam Dhig Bahu Jnata_m

            Dhig Kulam Dhik Kiya_Dakshyam

                        Vimukha The_ Tva Dhokhate_ ||

A very interesting scene is witnessed when the espoused theory takes a back seat in the Vali-Rama debate.  While Vali is asking pointed questions, Rama is defensive.  The child-ego of Rama is pleading to Vali's parent ego in the Transaction Analysis route when Rama mouths defences like 

Pratijna_ ca Maya_ Datta_ Tada_ Va_nara Sannidhau ||⁽¹¹⁾

“I have promised sugreeva”

Nivayam Sva Vase_sthi_ta: ||⁽¹²⁾

           

"I was not in control of myself."

The solution is found in Bhagavat Gita's work ethics approach Work well done is Verily Yoga⁽¹³⁾. Let not results of your actions become your motive.  You shall not also be attached to inaction.  The theme unfolds with greater clarity in the subsequent chapter.  A clear cut differentiation is made between the action to be done (Karma) the work to be avoided (Vikarma) and finally the absence of both i.e. inactivity (akarma) from a holistic perspective.  Krishna declares that he alone can accomplish everything who distinguishes between inactivity in activity and activity in inactivity. 

This particular sloka has been interpreted in different ways by different constructions.

From a managerial angle, inactivity-in-activity is the basis for ideas like Total Quality Management, where the elimination of Non-value adding activities have been identified as the main cost reducing agents.  The essence of all these theories is locating the inactivity (unproductive actions) amidst productive activities(Karmanya karma yah pascet).  This is the basis for many modern management theories, right from FW Taylor to Peter Drucker.  Drucker packages this differently when he says "Be prepared to abandon everything, lest we have to abandon the ship".  This also the basis for core-competence analysis.

Excellence is achieved by concentrating only on core-competence areas and outsourcing others.  Defining this reengineering approach, Taitreya Upanishad says "your present package of Praja, Karma, and Dharma cannot bring in success.  Only by Tyaga, unlimited success can be attained".  The very first verse of Isa Upanishad also emphasis this ⁽¹⁴⁾

            "Enjoy through renunciation".

Thus, the concept of giving up something for a more favourable alternative has been repeatedly stressed in the upanishads.  Both the pairs of negation and affirmation are stressed.  This is the essence of modern theory of Re-engineering where sets of activities or process are abandoned for a more profitable alternative system.

The Taithreya Upanishad thus puts to an end that theory that abundance of resources like work-force (praja) skills (Karma) and finance(dhana) would assure success by themselves.  It is imperative to introduce necessary process-changes by giving up irrelevant actions.

The second part of the Gita verse quoted "know activity in inactivity" is also very significant.  Inaction represents the absence of visible or physical actions.  At the same time the mind is engaged in deep analysis and thought process.  This is the Stephen Covey's Quadrant II stage where the conceptual and intellectual activities take predominant role.  This drives the organisation in the fast lanes of growth in a competitive environment Sri Bhashyam of Ramanuja distinguishes "Karma" as routine activities(sthula) and "akarma" as sukshma or latent power.  Thus the physical and intellectual activities have their respective roles. 

CO-ORDINATION OF MIND-BODY-INTELLECT IN VALUE SYSTEMS

The coordination of the managerial activities is depicted in the Katopanishad's Charioteer Matrix

Atma               -           the Charioteer

Sarera            -           the Chariot

Buddhi           -           Driver

Manas            -           rein holder

Indryas           -           horses

A perfect fusion of the above takes the chariot to the desired destination.  If coordination fails, the chariot will go astray.  This is later brought out in Mckinsey's 7S.Matrix.

The ideal mind set for a manager to be efficient and effective provided by Gitas paradigm. ⁽¹⁵⁾

                        Samatvam Yo_ga Ucyate_ ||

ANTAHKARANA AND PROBLEM-SOLVING:

Normally the decision making process is done through the 3 tiers of Manas - Budhi - Ahankara interface dealing with ordinary, complicated and complex situations.  The better type of managers develop their antahkarna - intuitive capacities-transcending the Jnanendriyas. Emerson calls it as the "inner gleam" which is the right instrument to advise on complex decisions.  Normally the "vrithi and samskara" act at conscious and sub--conscious levels to influence the final decision.  In a person who has developed the inner gleam and inner knowledge, antahkarana helps him to arrive at the right decisions.  This inner gleam is developed through following the right path Buddha discribes them as Right Faith, Right Aspiration, Right Speech, Right Conduct, Right Livelihood, Right Effort, Right Mindfulness and Right Contemplation (Noble Eightfold Path).

Indian heritage advises the practioners not to have a short-sighted adherence to the past and not to be led by other's opinions, however numerous they are.  It emphasises on a no-hold-barred enquiry method.  Such an enquirer is known as "Jignasu" - like Naciketas.  Such person will surely embrace success.  Kalidasa says in Malavikagni Mitram "Nothing is superior because it is old nor some Kavya is ridiculed because its new.  The noble souls examine in detail and accept that which is good.  The fool is led by other's thought."

 

Mu_da: Parpratyayane_ya Buddhi: ⁽¹⁶⁾

Present era is witnessing the changing paradigms in the concepts of Management and Governance.  With  the opening up of trade and globalization and with the cross-pollination of cultural moves, ethics, Value Systems have become  important subjects in Management.  As we witness all around us, people are not price-conscious but they have become Value and ethics conscious as well people not only look at what is the end product or personal gain but what the organization stands for what is its Mission and Vision and what are the values for which it stands.

Once the basic needs are satisfied, human beings evolve into Quality conscious beings.  After this, he begins to attach higher value like “right means” and “ethical values” to the quality he looks for.  Though  the values of values differs from person to person, place to place and time to time, there are certain basic values that are common to all the people.

VALUE OF SWADHARMA - THE ROUTE TO SUCCESS

The Concept of Swadharma finds repeated expression in Gita (II 31, II-33, XVIII 47, XVIII 42).  With Multinational Corporations from various parts of the globe entering India at an alarming pace, each ushering their own work culture, this statement on Swadharma merits a careful analysis.

The standing example is Japan. The war ravaged economy was written off by the West.  But the Samurai traditions of Japan helped Japan to reemerge as a mighty economic power on a very short time making it as a super economy next only to that of US.  The Management practices of Japan, once ridiculed by the West, are now being followed avidly by them - like Ringi System of decision making, respect for elders and systems, Quality circles etc.  The company song and code of values developed a sense of commitment there.

This exemplifies the importance of Swadharma.  Many ideas which have worked successfully in USA, when transplanted in UK, did not find success there even though the cultures were similar, like empowerment, informal relationship with the boss, etc.  One of the reasons for opposition to the WTO, even in developed countries is this fear of cultural fallout from USA.

The Gita Says

Swadharmo_ Nidhanam Sre_ya:

                        Pradharmo_ Bhaya_vaha : |⁽¹⁷⁾

Paradharma traditionally provides novelty and euphoria that makes it preferable to Swadharma.  As the novelty fades away, the paradharma sheds its glitter and fails to give satisfaction.  This is exemplified by MNCs adopting local cultural aspects and practices when they set shop in foreign locals.  Addition to Paradharma would lead to wrong managerial decisions.

VALUE SYSTEM AND SOCIAL RESPONSIBILITY OF THE ORGANISATION

Sanskrit Heritage texts speak of social responsibility in the context of Paropakara: The texts emphasise paropakara as an obligation and as the responsibility of groups and individuals.  The entire system of values is imparted through the concepts of punya (merit) and Papa (demerit).  All values that are called punya karma must be treated as social responsibility in the modern context

           

            Paropakara vah punyaya

                        Papapaya Parapeedanam

Declares a famous verse.

The directives are : “Wealth should be spent for others, ducationa for righteous deeds words for helping others and thoughts for ultimate emancipation. ⁽¹⁸⁾

By taking upon itself the task of social responsibility, an organization has to alleviate the fears of the public such as over exploiting the resources and causing pollution.  It has to render them abhaya (absence of fear) Right governance distinguish this from the empirical self from the Metaphysical Self.  What restricts the empirical self is the marks or mind.  Though it is a thinking adjunct  for the jiva, it is also instrumental in the realization of the higher gods attempted by the self.  Jnana is the basis of all activities of human beings.  The Nyaya-Vaisishita schools hold that knowledge is a specific quality of the Self.

Understand and perform your Swadharma - an elegant understanding of one's ethos in the context of a rapidly changing society.  This is the core teaching in Value Management in our heritage texts.  These concepts have stood the test of time - ever fresh and ever effective.  

Charity in terms of Cows, land and food are not important.  Wisemen say that the offer of abhaya (freedom from fear) is the best among charitable  acts.⁽¹⁹⁾

Indian Heritage System also embeds the discharging of social obligation within the time-limit charity for the sake of charity not exceeding, the time limit (for keeping promised) and well-equipped words win over all people.⁽²⁰⁾

Both  the and the industry should derive benefit from each other.  They are mutually dependant and exist with mutual support.  With mutual support and with mutual dependence, relatives prosper verily like the water in the lake.⁽²¹⁾

Indian Value System also advocates conciliatory   approach rather than harsh measures in Governance.  It is not strength which is pitted against softness.  Subtle, justice is to be pursued after, by strength.  Prosperity won by cruel means is doomed to perish, while that acquired by gentle and dignified means descends to posterity.⁽²²⁾

Thus it is seen that an oraganisation should use all its powers and resources to support Welfare  measures, as a social responsibility.  The heritage texts emphasise on dharma in every endeavour.  The all-encompassing word dharma refers to justice, truth duty responsibility and virtue.  The concept of dharma is understood and practiced by all, the entire country will prosper.

CONFLUENCE  OF ETHICAL AND ADMINISTRATIVE VALUES IN GOVERNANCE.

Swami Ranganthananda the renowned President of Sri Ramakrishna Math observes that

                        Yatra yogesvarah krsno

                                    Yatra  partho dharnur-dharah;

                        Tatra sri vijayo bhutih

                                    Dhruva nitir matir mama-

”Wherever there is Krsna, the master of yoga, and arjuna, the wielder of the bow, there (in that society) shall be found wealth, victory, general welfare, and unwavering justice and ethical sense – this is my conviction”.

The verse refers to the confluence, in each person, of two energies needed to achieve total human welfare: the first is the energy of yoga, the energy of vision, of calm spirituality represented by Sri Krsna, who in the Mahabharata war, did not take part in the actual fighting, but only gave sagely guidance to Arjuna and the second is the  energy of intense  and efficient action, represented by Arjuna, the hero of action.  This represents the combination, of contemplation and action, vision and implementation, in every citizen, which the Gita and the Chinese philosophy of Taoism call the state of being sagely within and kingly without.  Herbert Spencer, in his Study of Sociology calls it as ‘uniting philanthropic energy with philosophic  calm’.  This is true  education. When this is achieved by people, all management and administration will achieve the highest level of efficiency.

The first fruit of that confluence is Sri, economic prosperity, which our Constitution has set before us as the basic national objective-banishing the demon of dismal mass poverty.  This needs not only knowledge and hard work,  but also the capacity for dedication and teamwork, which is the gift of character-energy.  The smile of Sri or Laksmi, i.e, wealth, must illumine every hamlet and home in our country.  That can come only after first bringing into every hamlet and home the smile of Saraswati, the goddess of knowledge, and this knowledge, to be true knowledge, always must be accompanied by character.  And such knowledge, when applied to work produced Sri or Laksmi. The relationship of Saraswati to Laksmi is similar to relationship of pure science to applied science and both are needed to achieve total human welfare.

The second fruit of that confluence is vijaya, victory which means success accompanying every project, every endeavor.  The failure or the low-level performance of many of our  national projects and undertakings can be traced to the absence, in many of our people, of that confluence of hard work and character energy with knowledge-energy. And wherever success has been registered, we can detect the presence of that blessed confluence.

The third fruit of that confluence is bhutih, general welfare. Sri and bhutih together constitute welfare, which is the socio-economic and cultural objective our Constitution has placed before the nation; and to enable us to achieve that high objective, we need a fourth value.

And the verse refers to that fourth value  as dhruva nitih constant justice and ethical sense.  No political system, no society, can be healthy without unwavering justice and ethical sense.  This is the value called dharma, which holds the scale even between individuals and individuals, between groups and groups by favouring one individual  or group and discriminating against another individual or group, we increase injustice in society, increase social discontent, and pave the way to eventual social chaos.  Hence the citizens, as much as the administration, must be imbued with justice and ethical sense.  This value referred to the above as dharma, is presented by Indian philosophy  as the principle that integrates man with man in society.  It is basically a byproduct of the spiritual growth of the individual citizen,  which is expressed as moral law and which is reinforced by the state laws and regulations.  A respect for law and the constant effort to uphold it, on the part of the citizen and of the holders of power in the state, are what make for human integration and the strength and stability of a State,  more especially of a democratic state like ours.  It is the awakened moral sense in the citizen that expresses itself as human values and that makes the laws and regulations of the state effective.  If the moral sense is absent, the laws become ineffective, as the citizens twist the laws to suit one’s own advantage.  This increases injustice in society and weakens the political and social fabric.  If the moral sense is not present, social contracts become ineffective; for it is the moral sense that motivates one to stick to a contract; without it, he or she can, and will, flout it.   Then the cynical remark will come true, the remark that Moses and Jesus gave eleven commandments, but only ten were recorded, the ‘thou shalts’ and the ‘thou shalt nots’; and the unrecorded eleventh commandments says that,  even if you break all the ten,  only take care that you are not caught by the law!

Swami Vivekananda had said with great earnestness,  “ But the basis of all systems, social or political, rests upon the goodness of man. No nation is great or good bacuse Parliament enacts this or that, but because  its men are great and good. I have visited China in 1893  which had the most admirable organization of all nations. Yet today China is like a disorganized mob, because her men are not equal to the system contrived in the olden days. Religion goes to the root of the matter. If it is right , all is right…”

One must admit that, law, government, politics, are phases not final in any way.  There is a goal beyond them where law is not needed. All great Masters teach the same thing. Christ saw that the basis is not law, that morality and purity are the only strength. .⁽²³⁾

Going beyond  Kama and artha to dharma and moksa values is uniquely a human possibility; without that further step, human life stagnates, and the pursuit of kama and artha becomes abnormal and unhealthy as much for the individual  concerned as for the society.  It is dharma and moksa pursuit that lift human life above the animal life; dharmena hinah, pasubhih,  samanah – bereft of dharma man is just an animal,  says an oft-quoted verse of the Hindu tradition.  In his Gita Rahasya Lokmanya Tilak quotes the following  words  of the materialist English philosopher of the last century, John Stuart Mill, which will be interesting in this context. (Utilitarianism, p.14)

It is better to be a human being dissatisfied than a pig satisfied, better to be aSocrates dissatisfied than a fool satisfied. And if the fool, or the pig, is of a different opinion, it is because they only know their own side of the question.This is what we have to change fully in our democratic stte, by infusing moral, ethical and human values into our society.

REFERENCES:

1.            Rig Veda. 82.5

2.            Rig Veda. 82.6

3.            Mahabharata Santi Parva 91 52        

4.            Bhagavat Gita XVI-7

5.            Kalidasa Raghuvamsa 1.17

6.            Raghuvamsam 1.1

7.            Viswagunadarsacampu 830

8.            Bhagavat Gita

9.            .Sakuntalam 7.35

10.         Bhagavatam 10/23/39

11.         Ramayana

12.         ibid

13.         Bhagavat Gita II-50

14.         Isa Upanishad I.1

15.         Bhagavat Gita

16.          Malavikagni Mitram

17.         Bhagavat Gita

18.         Sukraniti V.179

19.         Sukraniti V.86

20.         Sukraniti V.35

21.         Sukraniti V.65

22.         Sukraniti V.71

23.         Swami Ranganathananda’s Human values in Management Bharatiya Vidya Bhavan Bombay 1989 pp 13-15.

BIBLIOGRAPHY

1.    Anna Chandogya- Brahadaranyaka Upanisads Sri Ramakrishna Math, Chennai (1971)

2.    Anna Upanisad Saram: Isa-Kena-Katha Upanisads, Sri Ramakrishna Math, Chennai (1977)

3.    Argyris C.Overcoming ORganisational Defenses Prentice-Hall, New York, (1990)

4.    Barnard C.The functions of the Executive Cambridge, Mass: Harvard University Press (1938)

5.    Bhatt G.K.Bhavabhuti”s Uttara-Rama-Carita Popular Publishing House Surat Second Edition (1965)

6.    Bose A.C. The call of the Vedas Bharatiya Vidya Bhavan Mumbai (1999)

7.    Daniel Goleman Emotional Intellegence Bantam Books, New York (1995)

8.    Bhatt G.K. bhavabhuti’s Uttara Rama Carita Popular Publishing House Surat Second Edition (1965)

9.    Bose A.C.The call of the Vedas Bharatiya Vidya Bhavan Mumbai (1999)

10. Daniel Goleman Emotional Inteligence Bantam Books, New York (1995)

11. Dr.B. Ramamurthi, Values in the medical field, values the key to a meaningful life

12. Dr.Srinivasa Sarma et al Kali Vidambanam and Sabharanjana Satakam, Sri Sadguna Publications (1990)

13. Dutt M.N. Mahabharata Vol. VII and VIII Parimal Publications Delhi (2001)

14. Griffith R.T.H. The Hymns of Rgveda Motilal Banarsidas Publishers, Delhi (1995)

15. James Champy Reengineering Management Harper Collins Publishers, New York (1995)

16. Kale M.R. The Hitopadesa of Narayana Gopal Narayan & Co Bombay (1924)

17. Kale M.R. Venisamharam of Bhatta Narayana Motilal Banarasidas Delhi (1972)

18. Kangle R.P. The Kautiliya Arthasastra Part III Motilal Banarasidas Delhi (1965)

19. Kashyap R.A. Indian UInheritance Bharatiya Vidya Bhavan Mumbai

20. MIntzb erg H. The Manager’s Job “ folklore and ficition, Harward Business Review, Harward Business School Press, USA (1975)

21. Sankara Rama Sastri C. Abhijnanasakuntala of Kalidasa The Balamanorama Press Madras.

22. Sarma D.S. The Upanishads and anthology Bharatiya Vidya Bhavan Bobay (1989)

Slokas in Sanskrit

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        µÖ¦Óü ³Ö¦Óü ŸÖ®Ö †Ö ÃÖã¾Ö…

(R.V. 82.5)

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        ×¾ÖÀ¾ÖÖ ¾ÖÖ´ÖÖ×­Ö ¬Öß´Ö×Æü …

(R.V.82.6)

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                ¬Ö´ÖÔ ‹¾ÖÖê¢Ö¸üÖê ³Ö¾ÖêŸÖË …

        †ÛôֻÖËÓ»ÖÖêêú ¯Ö¸üÖê “Öî¾Ö

                ¬Ö´ÖÖÔŸ´ÖÖ ÃÖãÖ´Öê ¬ÖŸÖê ……

(Mahabharata Santi Parva 91 52 

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Bhagavat Gita XVI-7

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(Kalidasa Raghuvamsa 1.17)

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(Raghuvamsam 1.1)

7.         דÖ׍úŸÃÖÖ ­ÖÖÛÃŸÖ ×­Ö±ú»ÖÖ …

           

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        ²ÖÆãü•Ö­Ö¯Ö׸ü¯ÖãµÖî ²Ö¬¤ü¤ü߁ÖÖÃŸÖ ‹ŸÖê ŸÖ­ÖãÃÖãÖ´Ö×¯Ö ×ÆüŸ¾ÖÖ ŸÖ­¾ÖŸÖê ¸üÖ•ÖÃÖê¾ÖÖµÖË ……

(Vis 830)

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        ÃÖ¸üþ֟Öß ÁÖãŸÖ´ÖÆüŸÖÖ´ÖË ´ÖÆüßµÖŸÖÖ´ÖË ……

(Sakuntalam 7.35)

11.       ׬֐ÖË •Ö­´Ö ­ÖÛá־Öé¤ü ×¾ÖªÖÓ

׬֐ÖË ¾ÖΟÖÓ ×¬ÖÖË ²ÖÆãü–ÖŸÖÖ´ÖË …

                ׬֍Ëú ãú»Ö´ÖË ×¬ÖËú ׍úµÖÖ¤üµÖÓ

                        ×¾Ö´ÖãÖÖ µÖê Ÿ¾Ö¬ÖÖêÖ•Öê ……                           

 (Bhagavatam 10/23/39)

12.       ¯ÖÏן֖ÖÖ “Ö ´ÖµÖÖ, ¤ü¢ÖÖ ŸÖ¤üÖ ¾ÖÖ­Ö¸ü ÃÖÓ×­Ö¬ÖÖî ……

13.       ­ÖÖ¾ÖµÖ´ÖË À¾Ö ¾ÖÃÖê Ûã֟Ö:

14.       ŸÖê­Ö ŸµÖŒŸÖê­Ö ³Öã••ÖߟÖÖ

(Isa Upanishad I.1)

14. Bhagavat Gita II-50

15.       ÃÖ´ÖŸ¾Ö´ÖË µÖÖêÖ ˆ“µÖŸÖê …

16.       ´Öæ¤ü: ¯Ö¸ü¯ÖÏŸµÖµÖ­ÖêµÖ ²ÖãÛ¬¤ü: …

17.       þִ֬ÖÖì ×­Ö¬Ö­Ö´ÖË ÁÖêµÖ:

        ¯Ö¸ü¬Ö´ÖÖì ³ÖµÖÖ¾ÖÆ: …

FDI & FII _ INDIA CANADA MUTALITY

                Foreign Institutional Investment (FII) and Foreign Direct Investment (FDI) have become an integral part of the global economy.  In the words of Howard Siverblatt “Investors want it, Institutions want it and Companies are starting to react”.  Globalisation has led to Transborder movement of Investment in  goods and services. FII/FDI  are factored when an organization from one country makes a physical investment in another country; it broadly refers to the acquisition of lasting managerial interest in a company in another country.  It differs from Portfolio Investment which is in the form of Indirect Investment whereas FII/FDI is direct investment in building, or machinery equipments, etc.

                FII/FDI can take many forms:

·         Direct Acquisition

·         Licensing of Intellectual property

·         Construction of a facility

·         Investment in a Joint Venture

·         Strategic alliance with a local firm

“No man is an island” proclaimed Poet John Dovine.  With the emergence of the flobalisation phenomenon, no country is an island, in itself. FII is facilitated by the onset of the New Information Technology System which makes information travel lamost at the speed of light as Bill Gates says.  Ushered by the fast decline in the global communication costs.  This in turn has helped the  sea change in investment policies and regulatory environments GATT & WTO regime have also  revolutionsied Trade policies and Tariff Liberalisation.

                As  a consequence to increased cross-border flow of FII/FDI, new markets have been  opened up.  Cheaper Production facilities have come up, due to access to new technologies, she@@ and financing.

                Of course, there is also accompanying fear that multinational conglomeration  would seek to influence and waken economies in other especially developing countries and destroy local competition.  They cite the collapse of the “Asean Tigers” in the early 1990s.  However, most of the apprehensions are not well-founded  and can be remedied. . 

                The change is visible traditionally. FII/FDI used to come in the form of Machinery, Equipment and Building via mergers and acquisitions. Now we see even small  companies go for FDI.

                It can be posited that  FII is an important and inevitable factor for globalisation as it facilitates the avoidance of foreign government pressure for local production.  It helps  in getting across trade barriers.  It also helps the economy to move from Domestic export to locally based national sales. Consequently it also increases capacity and productivity, of the enterprises.  It also provides opportunity for co-production, joint venture and joint-marketing, providing new market access.

                It can be posited that at some stage, if the economy, export of product/services reaches critical mass; at this stage, foreign location may become more cost-effective.  This triggers FII/FDI.

II ANALYSES OF THE IMPACT OF FII IN INDIAN CAPITAL MARKET:

From September 14, 1992,  FIIs were permitted to invest in financial instruments.  Since then foreign portfolio inflows through FIIs in India have acquired a significant place from policy  perspective, especially as India has emerged as one of the most attractive investment destinations in Asia. Shareholder-pattern of Public Sector Units (PSU) companies reveal  that FIIs have been big buyers in PSU banks.  As on June 2009, the net equity  investment by FIIs is Rs.252233, crores (Now it will be much more), with 1662 registered investors Dr.Prassanna Chandra stated that improving the efficiency both allocative and operational of the  capital market importing greater liquidity to the securities traded in the capital market, maintaining the stability, safety and soundness of the capital market enhancing the p@ to investors,  sharing  up the confidence in the capital market and globalizing larger amount of capital through capital market are required for a stable and productive investment market.

                The analysis the impact of FII on Indian Capital Market has been conducted by Dr.Rangarajan and B.Srinivasan, University of Madras using Multiple depression and Karl Pearson’s Co-efficient of correlation for Nett Investments.

                The following table shows the inflow of capital by FII’s in Indian Capital.

                From the above table it is seen that in 1992-93 FIIs have not contributed significantly to the capital market  because it is the immediate subsequent year of gloablised economy ; but from the year 1993-94, an extra-ordinary percentage increase is seen, which get stabilized, only in the year 1998-99,  there is a downward trend of FII flows, this is due to tightened SEBI regulations necessitated by scams.  In the year 2003-04 onwards there is a positioning   upward scoring due to boost in economy.

                Now let us see the impact of the inflows on Capital Market Indices.

                From the above analysis the researchers have informed that FIIs have significant impact on the Indian Capital Market.  This will help the investor to decide on their investments in stocks and shares.

                A sector-wise study had also shown that certain section like construction industry, Banking, Oil and Gas, Real estate etc, have great scope. Delocittes Global Venture Capital study of 2009 anticipates significant increase in Venture Capitals.

FII/FDI PROFILE IN INDIA-CANADA INVESTMENT AREAS

                Canada and India are two major democratic countries with sound economies, sharing common values and similar political structures.  It is seen that despite the growing depth and dynamism in relationship and the substantially expanded bilateral  ties between Canada and India there remains much untapped potential in the relationship.

INDIA:   India’s growth in GDP in the recent decade is around 8% per annum, even against the backdrop of global recession.  It has also witnessed sectoral transformation in economy with phenomenal growth in Service sector. It has risen to 53.49% GDP. In 2008-09.  There is a paradigm shift in the sectoral contribution from agriculture to industry to service which is an indicator of a vibrant and intelligent economy.

INDIA CANADA MERCANTILE TRADE

                India is the 16^th largest importer and 27^th largest exporter in the global arena.  India’s total user merchandise trade in 2008 was US $ 165 billion.  Canada was ranked India’s 30^th trading partner in this  too in Chemical products (25.2%) textiles and apparels (24.9%%) etc. Canada’s trade in merchandise exports to India through showing an increasing trend, is a modest US$ 4 billion covering  mostly traditional areas.  It is seen that the total trade between India and Canada is three times smaller than the dimension of trade between India and Australia, eventhough Canadian economy is about 50% larger than that of Australia.

INDIA-CANADA SINCE TRADE

                Over the past decade, bilateral trade in services between Canada and India nearly tripled to reach US $ 693 million in 2007 from US $ 241 million in 1999.  Canada’s leading service receipts from India at 50% of the total is travel. Canada’s export of commercial services to India peeked in 2001 and 2002, and since then is decling.  India’s export in services have expanded rapidly from US $ 16 million in 1999 to US $ 130 million in 2007.  The leading area is India’s export of computer and information services and business services to Canada in the age of services outsourcing.  Hence Canada’s net importer of services from India.

INDIA – CANADA INVESTMENT RELATIONSHIP

While this shows an increasing rend, in quantum, it remains not very significant to the level of investment that each country receives from the rest of the world.  As of 2008, India is Canada’s 20^th largest source of Foreign Investment, while Canada is India’s 40^th largest service of FDI.  However, the recent trends are positive.  The stick of Canadian Investment in India has reached US$ 753 million in 2008  while Indian investment in Canada reached US$961 million, thus Canada becoming a net importer of FDI from India.

While India’s GDP growth is about 7.8% p.a.,  despite global recession, Canada’s GDP growth is around 2.6% p.a. year 2009 showed a negative growth due to recession. Exports to India have grown by annual compounded rate of 24%. Import from India have grown by 13% p.a.

INVESTMENT PROFILE (1) CANADA AS DESTINATION

FDI from India in Canada is in extra-active sectors like Oil and Gas, steel and Aluminum and in strategic sectors like Chemicals, Pharma, Banking, Automobiles and IT.  India is the fifth largest investor in Canada from Asia/oceanic and  @@ Investor globally.  Yet  it comprises only 0.5% of total FDI in Canada in 2009-10,.

                There is a great scope for substantial increase of Indian FDI in Canada.  Economic Intelligence Unit ranks Canada as the best business place among the G7 countries for the  next 5 years.  World Bank also has reported that Canada is the country which has the most stream-lined business set up process.            

                By 2009 Indian FDI in Canada is US $ 2.8 billion which is a 11.4% increase.

CANADIAN FDI IN INDIA

UNCTAD reports that Indian growth recipient of FDI flows in 2008 of the order of 85.1%, which is the highest growth rate globally.  The cumulative total in US $ terms comes to 46.5% only.  This itself indicates India as a favourable destination for FDI.  The Special Economic Zones in India have acted as  @ for the growth of FDI.

                Canadian FDI in India in 2009, stands at US $ 574 millions. India is the eleventh largest recipient  of Canadia FDI in Asia/oceaic.

                The foregoing analysis indicates tht there is a tremendous scope for the increase in trade and investment between these two countries which share common policies and democratic set up. To facilitate this a joint study group was set up to examine the feasibility of a comprehensive.

ECONOMIC PARTNERSHIP AGREEMENT

(CEPA) between the two countries whose commodities have been approved at the policy levels.  It is necessary to have a business model which has specific parameters based on CEPA that would facilitate the bilateral  flow of goods and services and investments.

IV ECONOMIC MODELLING FOR INDIA-CANADA FLOWS

v  The economic impacts of the CEPA between Canada and India can be empirically examined with a computable general equilibrium (CGE) model. In this Chapter, we use the Global Trade Analysis Project (GTAP) model for this purpose.

                The modeling results should be considered in the context of both the advantages and limitations of the model, and of CGE models in general. The GTAP model integrates data on bilateral trade flows, trade protection and domestic support together with national input-output tables that describe the sale and purchase relationships between producers and consumers for 113 economies/regions. This allows the model to generate estimates of the impact of trade policy changes, such as preferential tariff elimination under free trade agreements, on trade flows, the level of national economic output and employment.

v  However, the GTAP model can reflect only the expansion of trade in products already traded in the bilateral relationship, and cannot predict the creation of trade in new product areas, which is particularly important when the existing trade relationship is fairly narrow, as is the case between Canada and India.

v  Further, increases in trade do not drive gains in productivity in the GTAP model, although it is possible to introduce a productivity increase in the model.

v  Finally, the GTAP model only allows for analysis of gains from liberalization in goods and services trade, and does not include gains from liberalization and enhanced economic cooperation in other areas (investment being a key example).

v  Economic modeling to identify the possible economic impact of trade liberalization. Simulations using the GTAP were carried out by both Canada and India. The simulations covered a wide range of liberalization issues such as trade in goods and services and trade facilitation, and they examined the implications of productivity gains and increases in the supply of labor and capital, and their consequent impact on the economies of the contracting parties.

                Estimates of GDP gains range from US$6-15 billion for Canada and US$6-12 billion for India. The  potential gains from liberalizing trade between Canada and India are substantial. Further, the gains are fairly symmetric. Bilateral trade increases significantly with export gains for Canada ranging between 39% to 47% and for India, between 32% to 60%.

FUTURE PATH  FOR GROWTH

The sina-qua-non for CEPA to be operative is to case the path for the flows and remove bottlenecks..  Restructure tariffs can have a dampening effect on trade so too, non-tariff barriers like technical regulations industrial standards and sanitary and physio-sanitary requirements which differ from country to country. They should not become asphyxiating   restrictions on trade.

                To facilitate easy flow  (1) restrictive tariff be removed, replaced by a national tariff profile (2) rules of origin to be simple and easily implementable with low costs (3) customes duty regulations are to be made easier (4) Trade facilitation be smooth and effective (5) removal of technical barriers to trade (6) Logical Rational leaking of physio-sanitary issues with appropriate approach particular to the country (7)Logical emergency Provisions (8) remedial provisions.

                Great strides have been made by both the countries in certain areas, while action remains to be taken in other areas.  Regarding rational tariff profile in 2010 Canadian Budget E@ removed most of the tariffs.  India is given general preferential Tariff (GPT) status by Canada.  India has receiprocated by group customs duty reliefs to Canada.  India follows the practice of regional trade agreement (RTA) as building block that supplant the gam@ from multilateral trade liberation.

                We will examine the future path to be delineated for effective implementation of CEPA in the relevant areas as given below:

v  Trade Liberlization Requirement for FII:

•          Rational Tariff Profile

                In 2010 Canadian Budget Estimates removed most of the tariffs.  India is given “Genereal Prefrential Tariff” (GPT) status by Canada.

•          India has also reciprocated by giving Custom Duty Relief’s.

v  “Rules of Origin”:

                                To qualify for preference under CEPA

•          made simple.

•          Customs Duty Regulation to be easier.

•          Trade facilitation.

•          Removal of Technical Barriers to Trade.

•          Phyto  Sanitary Issues.

Emergency Provisions

v  India has recently signed and negotiating with number of CEPAs, and will seek ROO with Canada that are consistent with her currently pursued practices.  However, further implements are necessary, as per the committee recommendations.

v  Rules of Origin

                                The following points may be considered  for the India-Canada JSG for Rules of Origin.

Ø  Rules are clear and simple in design with low compliance costs;

Ø  Rules are economically efficient;

Ø  Rules recognize the increasingly globally integrated nature of manufacturing process;

Ø  Rules acknowledge the principles of competitive and comparative advantage; and

Ø  Rules facilitate trade between the two countries.

v  Customs (Origin) Procedures

                A Canada-India CEPA should include provisions that allow for the effective and transparent administration of the rules of origin. Such procedures should help ensure compliance with the rules of origin without creating unnecessary obstacles to trade. The broad objectives could include:

Ø  simplify and harmonize customs procedures;

Ø   ensure predictability, consistency and transparency in the application of customs laws, regulations and administrative policies and procedures;

Ø  facilitate bilateral trade and ensure the security of such trade;

Ø   provide a means for customs-customs consultation to enable early resolution of any issues affecting the movement of trade across borders; and

Ø  rules of origin should be readily enforceable at the border without involving additional administrative costs.

                Based on previous agreements, Canada and India have different views in respect of  certification and verification of origin. In the framework of a bilateral agreement, we may have an  opportunity to find innovative solutions for customs procedures.

v  Trade Facilitation

Ø  Facilitate trade between the two countries;

Ø  Build upon the WTO work with a view of avoiding duplication;

Ø  Support the objective of reducing cost for the trading community;

Ø  Support innovation and promote the use of new technologies where appropriate;

Ø  Are in accordance with the Parties respective confidentiality and protection of information requirements; and 

Ø  Ensure that appropriate security measures are maintained.

In the context of a CEPA, India and Canada should initiate negotiations related to Trade Facilitation as early as possible so as to improve customs efficiency through bilateral cooperation. Such cooperation could include:

Ø  Appropriate controls to combat offences against law administered by customs and facilitate legitimate trade;

Ø  Ensuring efficient, economical customs border administration and the expeditious clearance of goods;

Ø  Ensuring harmonized systems of customs valuation, in line with the Agreement on Implementation of Article VII of the GATT, 1994), duties and documentation may be evolved across all notified or authorized ports of entry in both the countries; and

Ø  Procedures of handling of goods at ports and customs clearance that may be simplified and made more efficient.

v  Technical Barriers to Trade

                A Canada-India CEPA should include a TBT Chapter, which should:

Ø  Build on the foundations of the WTO TBT Agreement and seek to improve its implementation;

Ø  Ensure that standards, technical regulations, and conformity assessment procedures do not create unnecessary obstacles to trade, primarily by establishing enhanced transparency disciplines;

Ø  Seek to reduce transaction costs for exporters by exploring methods to facilitate the recognition of conformity assessment;

Ø  Enhance joint cooperation between the Parties; and

Ø  Create a bilateral mechanism to address specific TBT issues.

                In addition, in order to facilitate trade in goods, both sides could explore opportunities for mutual recognition in the area of technical regulations, standards and conformity assessment procedures.

v  Sanitary and Phytosanitary Issues

A Canada-India CEPA should include provisions on SPS issues that:

Ø  Affirm that SPS trade-related measures shall be governed by the WTO SPS Agreement; and

Ø  Ensure an effective bilateral mechanism to provide a forum for ongoing cooperation and information exchange, as well as facilitate discussion on bilateral SPS issues in order to avoid disputes, taking into account existing mechanisms.

Ø  Emergency Action

Ø  If necessary, a Canada-India CEPA could include an emergency action chapter that provides for a transitional, tariff-based emergency action mechanism that covers all goods and establishes clear parameters for any resulting actions, the conditions under which they may be imposed, and limits the length of time for which the action may be maintained.

Ø  Trade Remedies

Ø  It is recommended that trade remedies could be discussed with the objective of maintaining appropriate protection from unfair trading practices, including a potential discussion of global safeguard measures, while ensuring that the benefits of trade liberalization are not undermined and allowing potential exports to be realized, in accordance with the rights and obligations established by the WTO Agreement.

Ø  Liberalization Paradigm

Ø  In Completive and knowledge based economies, service sector place important role.

Ø  72% of GDP in Canada in Services.(Ranked 18^th in the World)

Ø  57% of GDP in India in 2009-10.

                This is due to the fact that service section is more resilient to Global Turned out than goods.

v  Bilateral Trade in Services

                The Canada-India CEPA should include a Trade in Services Chapter that provides for:

Ø  Liberalization of trade in services with substantial sectoral coverage, measured in terms of numbers of sectors, volume of trade and modes of supply; including sectors and modes with trade potential and complementarities;

Ø  A considerably higher level of ambition than the current WTO commitments, with the aim of achieving market access, non-discrimination and compliance with Article V GATS;

Ø  Disciplines in domestic regulation that would be a useful complement to market access and non-discrimination and would play a positive role in facilitating trade in services; and

Ø  Provisions to facilitate the mutual recognition of professional qualifications.

There are other important areas like Intellectual Property Rights, Energy Issues Labour and environment, Social Security, completion Policies etc. which are to be discussed and worked out to ensure a  perfect symbiosis between the economies of these two large countries.

CONCLUSION

The world to survive today should move from restrictive cut throat competition to constructive co-operativon in all spheres. India and Canada, sharing the same ideas should develop constructive approach and methodologies though instruments like CEPA to entures “greatest happiness for the greates pssoible member”.