Wednesday, January 28, 2015

41 Eternal vigilance is the price of survival

In the last post, I looked back at my experience of the CAG audit and how enervating it is. Mulling over these memories, I am struck by a single important ingredient in public service (government jobs): the crucial necessity of being eternally vigilant, even paranoid. Let me try and explain with some illustrations.

One of the unexpected facts of public administration is the ambiguity of the legal and procedural framework.  You would think that with over two hundred years of the modern bureaucratic state (well, maybe it is closer to a hundred and fifty years), all the rules and regulations, the laws and policies, would have been sorted out by now, tweaked and harmonized, fine-tuned and spruced up to meet specific objectives. This is the assumption that many of us start with in our careers. As I read the statement of a central minster about decentralized administration some time back, if only the objectives were clear, powers and procedures were unambiguous, and sufficient funds and personnel were provided at the start of every year, the panchayats (decentralized governance bodies) would be able to achieve results. It occurs to me that this is the plaint of every functionary and worker in the system. The reality, alas, is far different.

In the real world, objectives are spelled out in only the vaguest terms, and one has to give body and flesh to them as one goes along. The budgets and working rates are not approved and assigned at the start of each year, and the executive officials in the field have often to arrange interim funding themselves (sometimes they have to get the cash from the local moneylender!), in the hope that the funds will be approved and released finally (sometimes this doesn’t happen, and they are left holding the can, as the saying goes). Staff positions are usually half vacant (and of those in position, the dreaded 20-80 rule comes into play!). Rules are unclear, often contradictory, and court rulings cryptic. Administration, at least in the public sphere, therefore, is like weighing a handful of active frogs in an open pan balance.

For the controlling officers, the situation is one that constantly poses intractable problems and contradictions. Because they have to be constantly taking decisions that are on the edge of legality, they have to be constantly vigilant that they are covering their soft body parts (to put it delicately!) all the time. For those taking financial and discretionary decisions, the occupational hazard is enormous, because anybody can question them anytime (the immunity that used tto be given to public servants for decisions taken in the course of their duties, apparently ceases the day they retire, as they cease to be public servants from that date, according to a court ruling).

But constant vigilance does not mean that one can stop taking decisions. That will go on, but there has to be a constant vigil that somewhere or other, one is not making some serious mistake or overlooking some critical rule or policy decision by the competent authority. This entails a repeated study of the rule books, court judgments, and so on. Since one cannot do this alone, it calls for a certain amount of discussion and even gossip, which is what officials do when they get together and talk ‘shop’.


Here’s another interesting thought. Hundreds of papers or files will be passing through your hands every day. You may get only a few minutes with each of them. You will have to carry out all your due diligence on each and every one of those files during those few minutes that it crosses your path. That is the level of vigilance that is called for. You need to keep your faculties engaged and alert, and not allow yourself to relax even for a second, because something may slip past your guard. If you are not feeling up to examining each file as it comes, you should keep it aside or take a break until you are in the proper frame of mind. Sometimes it takes weeks or months for that to transpire. Behind every officer’s desk, there is usually a shelf where certain intractable files are stowed away until the gods send a message and a solution appears. That is what is meant by eternal vigilance!

Having said all this, let me hasten to add a mitigating thought. Especially if you are at a senior level, be aware that the file before you has probably taken a long and tortuous route to get to your table, and that the fate of many persons may be hanging on your decision. If you are uncertain about how to proceed, there is always the temptation to toss the problem into someone else's basket by referring upward, returning down for further information, or referring laterally. If the decision is something within your jurisdiction, try your best to resolve issues by discussion and consultation before sending the file away, especially if you will be able to do somthing good by taking a decision. Especially if you are irritated by spelling mistakes, get them corrected on the draft, but keep the file on your table! For it may take another few months for the file to move down and up the chain before it comes back to you and provides you an opportunity to make amends.

Friday, January 16, 2015

40 Dealing with audit

This is a totally different topic from the recent posts on saving and retirement. Getting back to dealing with the sort of challenges that routinely come up in one’s working career, this one is about dealing with audit, especially in government. People are generally concerned about how the public expenditure is being carried out, because it is about their money, collected through taxes; there is not that much concern about what private people and corporations are up to. Private audit, therefore, is all about certifying the accounts; audit of public offices, however, is about digging for dirt and catching the people on the wrong foot.

As a project director of one of our externally-aided projects, I was unfortunate enough to get involved with a “special audit” or a “performance audit” conducted by the central comptroller and auditor-general (CAG).

Tuesday, January 6, 2015

39 Become (and stay!) a millionaire

Here’s an extraordinary book which tells you how America’s millionaires came to be so. Stanley and Denko (both PhDs) in their book The Millionaire Next Door. The Surprising Secrets of America’s Wealthy, demolish many myths or notions about the wealthy. Almost every line has a nugget of information, based on studies and surveys, that show how most of them accumulated their wealth the hard way: by working hard and steadily, minimizing expenditure, and saving and investing assiduously. The majority are self-made millionaires in their own lifetime, not inheritors of fortunes. The secret is that they don’t live like millionaires: they live in ordinary neighborhoods, drive ordinary cars, they maximize their assets (investments, nest-egg, cumulative capital), not their consumption expenditure, they are “compulsive” savers and investors.

Saturday, January 3, 2015

38 Enjoy saving and investment – as a hobby!

The principle of embarking on a course for some intrinsic values rather than just for a material goal, suggested in the previous post (37 To find a purpose), has an application even in something as arcane as the pursuit of assets and a nest egg for retirement!

Consider the goal of attaining the accumulated assets we require to maintain our living standards after retirement, which can loom like a formidable mountain in the early stages. Like real mountain-tops, the more we advance, the farther it seems to keep receding (local guides, who know too well the discouraging elusivity of these things, keep enticing you on by cheerful assuring you that’s it’s just a shouting distance away – in Hindi, “haak-bhar door hai, sahib!”). We saw the arithmetic of it in previous posts (36 Saving for retirement – the professional view, and 34 Retiring comfortably, or your life term savings plan); but as you can see, it can be dry and enervating to understand how it works exactly, especially as there are so many conflicting factors: incomes, expenses, inflation, taxes, compounding, discounting, erosion of value, liquidity versus security, and so on and on. Then there is the drudgery of dealing with the petty bureaucracy and exacting paperwork of bank accounts and provident funds and insurance policies and income taxes. There is a temptation to give up the whole thing and let momma (or the government) deal with it!

The one sure way to take the drudgery out and instill even as dry an undertaking as investment and taxes is to approach it with the mindset of a willing student. In fact, make it a hobby rather than a responsibility! If it’s income tax, designing your own spreadsheet and fitting in formulae to do the computations, designing reports (however rudimentary) and so on can be an interesting exercise and a challenge to your computer skills. Once the templates are drawn up,  the drudgery is taken care of and you only need to post up the year’s transactions. Similarly, keeping track of your savings and investments – the fixed deposits (FDs), PPF account, and other instruments – can become confusing and exhausting if you don’t devise a tracking system (I have described mine: keep entering the items serially in a diary with details, dates, values and source and destination), amount at investment and at maturity, and then review frequently). This also can provide some engaging moments.

Tracking tax deductions, roll-over of matured deposits, and so on is also something that will have to be done on a regular basis. Filing income tax returns also is easier if taken as a hobby project rather than as an imposition. The challenge is to understand the rules of the game, devise our own ways of doing it, and the reward is the satisfaction of having achieved something to “beat” the system (not really, nobody can beat the tax department, but it’s good to think of it as a competition!). The same with shares and the demat account you need to work them: the joy is in beating the market, not so much in any profit you may book. My neighborhood baker was a share trader in Mumbai for twelve years, and his conclusion is that it’s a mug’s game: he made 12,000 rupees net profit (or loss, he’s not sure!) after all that effort. Now he runs a bakery for the challenge of it – again, the competitive spirit!


Just as in music,1 you learn for the intrinsic worth of it and not to gain audience appreciation, so too in building a corpus: once you get engaged in the intellectual pursuit of the process, you will be hooked, and will not feel the act of saving and the mechanics of investment as a chore. Of course, one should not go to the other extreme of getting obsessive about saving, and trying to pinch pennies at the cost of one’s comfort and well-being. It’s a long term activity, and should be a source of pleasure and learning rather than a punishment!

1and in blogging!

37 To find a purpose

Getting off the subject of saving and investment, one of the fundamental issues in our lives is to find something to do, some goal worth striving for. I think one has to be a little discerning about the type of goals one fixes on.

A basic fact of life is that we are not very much in control of results, so any life plan that starts with a result objective is going to be dicey (likely to end in frustration). For example, if I set out to become a world famous performer – say, a musician like Ravi Shankar – I may end up trying to emulate his pathway to international fame and glory (some of it entertaining and gratifying, some painful and challenging). Unfortunately, there is little likelihood that I (or any other aspiring music learner today) will be able to reach even close to his level of achievement and creativity in precisely his way. Or if I set out to become the President of the USA. Or even a Nobel winner or the Best Blogger award winner of the year.

This may sound surprising, and a little self-serving, as we are brought up on the principle of striving for high goals, however distant, and not giving up. But the essential difference is that we are striving for certain external results in the above examples, which only one of maybe many thousands (if not millions) who set out on those paths can ever hope to achieve, and the non-winners are bound to feel disappointed and dispirited. So what is the alternative?

I suggest that we have to redefine the objectives to give primacy to what we could term the innate values in each of these fields of human endeavour. We don’t set out to get the world food prize (if there is such a thing!), but to address some problem in our neighbourhood – maybe collect unused food and reach it to orphanages. (It’s not something I am into, so this is just an example, not an exhortation). I learn a language to appreciate its literature, not become an expert and decipher a dead script (unless, of course, it’s my PhD topic!). I register for a PhD not just to become recognized as an expert (although that of course is a significant result of getting the degree, especially at the start of an academic career), but because I am getting interested in a topic and I feel I have enough material and ideas to develop the dissertation. I devote time to learning music not because I want an audience to cheer for me, but because I want to understand the grammar of it, the techniques of performance, and develop my own technical and imaginative skills. Audience appreciation would be a far lower priority. I keep a dog not because I want to show it off in dog shows, but because some innocent pup needs a home (I’m a cat person myself!). And so on.

This example of music is especially instructive. I have heard (and read) many accomplished musicians state the central principle that a performance is mainly for one’s own edification (musical appreciation or spiritual uplift), and not for the audience’s. Serious classical musicians see their study and performance as a way of spiritual renewal, communication with something higher and bigger, a form of prayer. Vilayat Khan, the sitarist, says in his performances that it is a form of prayer, ibadat, as does Bismillah Khan, the shenai player. Rajan and Sajan Mishra of the Banaras school of vocal music frequently invite the audience to join them in their meditation through the raga. They often perform with closed eyes, as if the world before them dissolves and they are in a vast inner space. This is the spirit which needs to infuse the learner, rather than learning a few set songs for impressing audiences.

The Bhagavad Gita, that central text for Hindus (and many others!) stresses the importance of effort without too close an attachment to the possible fruits of action. This is an acknowledgement of the principle that we are in control (relatively speaking!) of our efforts, but the results are at the mercy of so many other factors that we need to make only our side of it a goal, not the end results. This is not being ‘other-worldly’ or impractical, but just a way of remaining actively ‘in the game’ even though we know that results may not be one hundred percent in our favour.

Of course, this doesn’t mean that we can get away with being negligent or less than diligent. It only means that we may not get the worldly success and accolades that our efforts really deserve, but that should not throw us off our stride and cause unhappiness, because the effort itself has been a reward. This sort of approach shouldn’t be dismissed  as a loser’s rationalizations or as an example of ‘sour grapes’, because really if all that will give us satisfaction  is the first prize (or even any prize, most competitions would not attract sufficient participants. And that goes for the competition of life, because there are always people who are going to be better, faster, stronger, cleverer, and more successful than us. That doesn’t mean we all give up and sit on our haunches! 


One last comment is that while effort is to be valued for its intrinsic worth and for the value of the process, still some discretion and good sense is needed in setting even these goals. Granted we may be well aware of the improbability of becoming a Bade Ghulam Ali Khan (great vocalist), but if we don’t have a voice, we need not torture ourselves trying to become a stage singer (and our neighbours!). There are however different levels of musical expertise (just as an illustration, but I confess that I am also writing about learning raga music! here), and we could become a cultivated listener, musicologist, anecdotist, discographer, database developer, recording technician, even a critic, or a teacher, and so on without getting frustrated by our lack of singing capabilities. Similarly in all walks of life. We can be a good bureaucrat in our little office, without aspiring to be the Prime Minister, or an excellent club member even if we are not a Sachin, and so on ad infinitum.

Friday, January 2, 2015

36 Saving for retirement – the professional view

In a previous post (34 Retiring comfortably, or your lifetime savings plan) I referred to a pretty nice book by one Paul Westbrook, JK Lasser Institute (Saving for Retirement, Wiley, 2003), which deals with these questions in a professional manner. I’ll run through his main conclusions and see how my own home-spun analysis stands up.

First, the main points about the arithmetic of saving.