Monday, October 16, 2017

Market decoupling graphic of the day

John Mauldin points to this graphic from Zero Hedge which contrasts the trajectories of economic uncertainty (Economic Policy Uncertainty Index) and equity uncertainty (VIX index).
The stunning divergence is one more data point to put to rest the lie that market valuations are a fair reflection of economic realities. 

Saturday, October 14, 2017

Weekend reading links

1. Government intervention to make strategic purchases to both catalyse markets and lower prices is logical. The most cited example of such intervention in recent times has been the procurement of 770 million LED lights by 2019 as part of India's Domestic Efficient Lighting Program (DELP), which has resulted in a steep drop in the prices of LED lights.

Buoyed by the success, the government company, Energy Efficiency Services Ltd (EESL), is seeking to procure 5 million smart electricity meters and drive down prices. Livemint reports that L&T have won a Rs 13.61 billion contract to supply 5 million meters over three years to discoms in UP and Haryana at Rs 2722 a piece, 40-50% lower than the current market rate. 
Power distribution companies will not have to make an upfront investment to deploy these meters. EESL is investing in procuring smart electricity meters and the services of the system integrator. Utilities can pay back through savings resulting from enhanced billing efficiency and avoided meter reading costs. EESL will also appoint a firm, a “system aggregator”, to manage the installation of smart electricity meters and to collect and store data on power consumption for analysis.
A very rare example of innovation and big-scale public policy thinking in India. The challenge, in this case, will be to hold the supplier honest and make them deliver good quality meters, and have the "system aggregator" be able to actually collect and make available the required data for energy audit. The matter of getting stuff done. But a very good initiative. 

2. Much of the analysis about the ongoing movement against informality glosses over the demand side of the equation. Manas Chakravarthy writes in Livemint,
One consequence of the introduction of GST and some of the other measures to tackle black money will be increased market share for the corporate sector. Stockbrokers have been celebrating the opportunities opened up. A Citibank research report says: “The Indian government’s ongoing structural initiatives (and the GST rollout) will accelerate the transition toward the organized sector. Moves towards a less-cash economy, indirect tax changes through GST, direct tax compliance, e-commerce, and some progress on labour law reforms, among others, will prove disruptive to traditional structures in the medium term and result in accelerated formalization as well as economies of scale in the long term.” It’s no surprise that big business has backed these changes to the hilt.
Let me repeat what I have said earlier many times, the informal economy is not going to disappear. It will linger on and only gradually shrink over decades.

Formality introduces costs, which the producer will have to pass on to the buyers. But we need buyers who can afford to pay the higher price to access that good or service. This affordability can come only with increased incomes, a function of economic growth.

Barbers sitting on roadside and on makeshift arrangements offering haircuts for Rs 10-30 will form the vast majority of haircuts in India for the foreseeable future. In contrast, salons where the haircuts cost Rs 75-100 or more, likely to be in the formal sector, form only a very small proportion of haircuts. Governments can do whatever it wants to force these barbers to become formal, but they will not. The simple reason is that there is only so much demand that can be generated for salon haircuts! The shift to salons will happen only with economic growth.

3. In the best GST article I have read, Indira Rajaraman, draws attention to a weakness of the current GST architecture and how it affect the risk sharing mechanism in India's retail eco-system. She writes,
The principal culprit is the monthly frequency of reporting required under the GST (for businesses with annual turnover more than Rs75 lakh). Within each month, there are three dates in sequence for voucher uploading, consolidation and claims, with a daily penalty beyond deadlines crossed, added to interest on any tax credits denied. This formal voucher-based monthly reporting has dealt a death blow to the risk-sharing mechanism underpinning the efficiency of the Indian retail supply chain as we know it. And that is what has hit growth. Take a retailer of non-perishable items like garments or footwear. Retailers order a consignment from upstream wholesalers according to their best judgement of what clients will buy. The traditional practice was that if a retailer overestimated the appeal of a new style to his client catchment area, he returned unsold stock to the wholesaler, and finally paid the wholesaler a few months later only for his net purchase, net of returned stock.


Risk cover does best when risk is pooled across many locations with diversified patterns of incidence. The wholesaler is able to bear the risk of sale reversal because he can re-distribute returned stock. A new style in garments or slippers may lie unsold in one location, but fly off the shelves in another. Wholesalers in turn spurn retailers who return stock beyond some percentage limit of the gross purchase, thus leaving enough risk with the retailer to incentivize him to judge his market correctly and put in his best sales effort. If goods are defective, the wholesaler in turn returns the stock to the manufacturer, which again assigns risk to the only level where defects can actually be addressed.

When there is a switch to monthly reporting, a wholesaler uploads the initial gross sale to each retailer, with GST charged on a numbered invoice lodged in the system. Although the GST system does permit reversal of sale through issue of a credit note which can be offset against the next sale to the same retailer, it adds to the procedural burden, and is not something wholesalers are willing to touch. In effect, sale reversal has become impossible under GST, even for defectives. Retail buyers are now being asked to take a consignment at their own risk, and thereafter hold their peace. The traditional risk-sharing mechanism lies shattered.

Given that the retailer can no longer (in effect) reverse any part of an uploaded transaction, he minimizes risk by reducing his gross purchase from the wholesaler to the floor of his expected range of retail sales. This is what has hit growth. Wholesalers faced with reduced retailer offtake in turn place lower orders from manufacturers. Manufacturers have responded by sharply lowering production, some operating at as little as 25% of capacity.
She proposes doing away with the voucher uploading and matching process and replacing it with rigorous sample audits. I am inclined to agree.

4. A great stall is on in India's construction sector, the second largest employer after agriculture. Sample this,
For three consecutive quarters, the stalling rate in the realty sector has been in double digits, with the total value of stalled realty projects touching Rs1.27 trillion in the September quarter. The stalling rate (or value of stalled projects as a percentage of projects under implementation), at 12.7%, was at its third-highest level in nine years, only marginally better than in the June quarter, when the stalling rate hit a nine-year high of 13.3%. The commercial real estate sector has been the worst-hit, with a fifth of such projects getting stalled.
5. Talking of stalling, stalled infrastructure projects are no longer news. The latest on them shows limited progress in addressing the chronic problem. The value of stalled projects reached its highest level of Rs 13.22 trillion for the September quarter and stalling rate was 13.3% of all projects under implementation.
The reasons for stalling were the usual suspects - lack of clearances, fuel supply, finances, land etc.
A total of 39.04% of the projects are in the power sector and 25.59% in manufacturing. But the most disturbing news is in the declining new investment announcements. Sample this,
The value of new private sector project announcements in the quarter ended September was Rs31,000 crore. This value was Rs1.79 trillion and Rs1.69 trillion in the quarters ended September 2016 and 2015. 
6. This is a nice graphic that captures the fact that average commuter trip lengths rise with increase in city population size.

The article laments about the political difficulty of increasing urban mass transit fares and the resultant subsidy gaps.

While raising mass transit fares periodically is important, we should also bear in mind that farebox ratios are less than 50% in most metro rail systems across the world. In other words, more than half the operating expenses are subsidised. Therefore a more serious issue for consideration than cost-recovery may be to mark metro ticket prices as a percentage share of the median commuter wages.

The report states that the Railways subsidised Mumbai suburban railway commuters to an extent of Rs 33.94 bn over the past three years. That's not at all bad. An annual subsidy of Rs 11.3 bn for ferrying over 2.5 bn commuters (or 7.5 million per day), especially when seen as the cost of keeping them off Mumbai's roads, is actually a very good deal! In terms of efficiency, it would easily be the most cost-effective urban mass transit operation anywhere in the world. Managing a city is not just about recovering costs, it is about creating the conditions for creating growth, jobs, and wealth. And Mumbai mass transit does it better than most other enablers that the government has put in place.

7. Just like with anything else, too much competition is bad. As Andy Mukherjee writes, India's telecoms market is the best example. The race to the bottom with call and data tariffs have left everyone bleeding, and threatens to make this the latest addition to the bad debt problem for Indian banks. Mukherjee suggests that the carnage will not stop till the industry undergoes more consolidation and failures and reduces to four players.

However, I do not think that even then it is unlikely to be much different. As I blogged earlier, the elimination of interconnect charges on grounds that it would lower profits may not, in retrospect, turn out to have been a very good decision. 

8. Aeon has a fantastic essay on the evolution of higher education system in the US. It talks about the role of property speculators trying to use the College/University as a cultural centre and anchor to attract property buyers; competition among towns, state, and even church to establish colleges; the modest government funding forced colleges to charges fees and thereby compete to make college valuable for students; the limited regulation beyond grant of charter which allowed colleges lot of autonomy to innovate to attract students; the practicality associated with attracting middle class fee-paying students meant offering job-oriented course-work (engineering, agriculture etc) and accord importance to things like football.

And for those countries trying to replicate the US model of higher education, the author has this advise
Since it’s a system that emerged without a plan, there’s no model for others to imitate. It’s an accident that arose under unique circumstances: when the state was weak, the market strong, and the church divided; when there was too much land and not enough buyers; and when academic standards were low. Good luck trying to replicate that pattern anywhere in the 21st century.
9. The week Richard Thaler won Nobel Prize in Economics, comes this report from SCMP on the use of nudges (or, are they "shoves" here?) to get people to pay their taxes
Local governments have been told to set up name-and-shame databases – which will be searchable by anyone – by the end of the year... In the southern city of Guangzhou, the personal details of some 141 debt defaulters have so far been displayed on screens in buses, commercial buildings and on media platforms at the request of local courts. Meanwhile in Jiangsu, Henan and Sichuan provinces, the courts have teamed up with telecoms operators to create a recorded message – played every time someone calls – for those who fail to repay their loans. The message tells the caller: “The person you are calling has been put on a blacklist by the courts for failing to repay their debts. Please urge this person to honour their legal obligations.”
10. Finally, the award for risk diversification best practice has to go to LIC. It has been reported to have made a bid for shares worth Rs 7000-8000 Cr in the IPO of reinsurer General Insurance Corporation (GIC) Re. Talk about insurer buying exposure into a reinsurer who also insures some part of LIC's own portfolio! Or is it a case of LIC as the buyer of last resort in disinvestments.

Thursday, October 12, 2017

Plumbers, police, and hotspots

Now Chris Blattman has new paper on policing which is, willy-nilly, being cast as raising doubts on "hotspot" policing - use of digital technologies for intensive policing of areas where crime is concentrated. 

The paper finds that while such policing "deters crime and violence" in those areas and "reduced the most serious violent crimes" (rape and murder) in the aggregate, it had limited impact on the "number of total crimes deterred". But it found "spillovers", "pushed property crime around the corner" etc. The tone of the paper (and you can just browse to feel what I mean) unmistakably gives the impression that the paper evaluated "hotspot" policing and found limited benefits. 

Given the framing, it is only natural that people will raise doubts on "hotspot" policing. I can also imagine this paper triggering off more research on distant concerns like spillovers. While nothing as damaging as this can happen with this paper, the costs of such digressions are non-trivial.  

This is all very unfortunate and a testament to the state of development economics research. I actually think that the paper's primary endeavour itself is questionable. Why do we need to test the efficacy of "hotspot" policing?

To answer this, we need to deconstruct "hotspot" policing. There are two elements here. One, prioritising and targeting work. Two, using digital technologies (data analytics and visualisation dashboards) to help with decision-support on the prioritisation. 

Do we need evidence about these two elements? In more simple terms, in a system with scarce resources and several competing needs, isn't it a natural order of things to prioritise them using the most effective reporting and monitoring mechanism possible? 

Have we ever sought evidence on whether great Dashboards are a step in the right direction in the corporate world? Did the first set of corporate users demand evidence from IBM before placing orders for Cognos?

I see Dashboards as a logical progress in the transition of data management from the far less user-friendly stages of massive paper Registers and the confusing array of rows and columns of Excel sheets. Registers and Excel sheets contain data. Dashboards contain information. 

There are two logical criticisms to "hotspot" policing. One, given that actual decisions get taken at smaller jurisdictions, the human agents may have the bandwidth to be able to have a good real-time mental picture of the hotspots. A Station House Officer or Police Inspector, especially in urban areas, who has served for a couple of months, should have a fairly good idea of the high crime incidence areas, people, and categories. So why need a "hotspot" map? Two, even if the police manager is able to prioritise, he cannot, for contextual reasons (say, political complusions or there are too many high crime areas and too few constables to spare), deploy staff as he/she wants. What is the need of something that cannot always be acted on?

The responses are also two-fold. One, it may so be that police managers already have a graphic mental knowledge of all this stuff. But a mental map is a private information. Instead, information captured in this manner is amenable to effective monitoring across the organisation and is therefore a public information. This is true of any organised hierarchical system. Two, the objective should not and cannot be to have precise prioritisation and its implementation by all police managers. Even if a small share of them start using it, which is most likely in any large system, in a decidedly second-best manner, that itself would be a big progress. We would have set the stage for diffusion of an undoubtedly more efficient approach to policing. Given the weak state capacity in police systems, any improvements in monitoring capacity enhances administrative efficiency in the aggregate. 

Or the researchers could claim that they have generated evidence which can help limit the damage with fancy ideas which lead to massive wasteful spending. But how costly is a freeware application like this, this, and this that police jurisdictions can use to translate their data to actionable information? 

I see several pathways to change. One, some of the more enthusiastic police managers in a system find great value in using such technologies to prioritise and monitor their beats. Positive deviances emerge. Two, as Justice Brandies said, sunlight is the best disinfectant. Hotspot applications can shine light, bright and deep, into the crime data collected by police systems. Actionable information emerges. At least some insiders and outsiders can learn and act. 

I am unambiguous and unashamed in support of "hotspot" policing. All policing jurisdictions should, among other things, strive for spatial (and on temporal and human dimensions too) prioritisation and targeting of their policing efforts and they should use technologies like "hotspots" and other types of Dashboards! Of course, needless to talk about all caveats of data privacy and data biases, and the need for their mitigation.

This is not all that is bad with the paper. Spending too much research effort dwelling on displacement is a psychologically misleading illusion. Talk of constructing a fictitious straw-man and then refuting it! Why did we ever think that there would not be any displacement? Isn't it natural for thieves to move to the margins if an area suddenly becomes more intensively policed? Who said crime fighting is a binary game? It is far from the case that if we focus efforts in an area, crime will be eliminated.  

Policing is a repeat game. Actually, police officials, unlike economists, deeply internalise this plumbing reality. Focus on the existing hotspots and reduce incidence there. Respond to the emergent trends and redeploy. Keep iterating and aggregate crime will reduce gradually. If available, even use machine learning applications that have predictive analytics to help double down on the displacement locations. And alongside, also take all the other complementary steps required, not just including those by the police, to address crime. At least some police jurisdictions will have the good fortune of confluence of positive factors that contribute to the emergence of positive deviances in a few years. 

And in several policing concerns like traffic safety, where accidents happen more because of location characteristics and are less likely to be "displaced", just "hotspots" visualisation can be useful as decision-support. 

The most disappointing part comes somewhere near the end (italics mine),
But if crime is easily displaced, then targeting, coordinating, and concentrating resources in high-crime places may not be the right approach after all. Rather, it might be wiser to target the specific people who commit crimes or particular behaviors. Displacement may be inherently less likely than in place-based approaches. This is the spirit of focussed deterrence, which identifies the small group of people who commit serious crimes and use threats and incentives to keep them from offending (Kennedy, 2011). This is also the spirit of cognitive behavioral therapy, which fosters skills and norms of non-violent behavior in high-risk young adults (Heller et al., 2017; Blattman et al., 2017).
In an ideal world, we need to address the underlying socio-economic reasons for crime and several other dimensions, including focusing on the most riskiest people. Many of these dimensions are beyond the control of police departments. And in the real world, we all know the difficulty, even impossibility, of breaking down silos and addressing problems in a comprehensive manner. Should we wait for that ideal world to arrive before we try this out?

Who says "hotspot" targeting trades-off police system resources with "person" targeting? How can we say that it should at all be one or the other? Wouldn't measures to target specific people become likely more effective when the deterrent effect on places is higher and vice-versa? 

This is pulling stray research strands, the only intersection being that they were all done by the same researcher, and generating a grand policy narrative about addressing crime and violence. Frankly I just don't have the energy to go on. 

Talk of writing a paper on the obvious! And even making a splash out of it! Why is academic research so plumbing-free?

Tuesday, October 10, 2017

Bubbles, bubbles everywhere, waiting to burst?

The big lesson for central banks from the bursting of the sub-prime mortgage bubble was that monetary policy has to go beyond narrow focus on price stability and also address financial stability. 

It is therefore remarkable that quantitative easing continues unabated even as asset prices are frothing across markets - bonds, stocks, property, and even cryptocurrencies! In some cases like Sweden, as Zero Hedge points out, real housing prices are well past their highest levels since 1875! In fact, they are at more than double their previous high. 
And despite this, the Riksbank prefers to continue monetary accommodation by retaining rates at minus 0.50%! Of course, it does not help that its monetary policy is locked into ECB's monetary policy stance. 

The real estate markets in Canada and Australia are not far behind. And junk bond spreads in the US are threatening to touch their lowest in the past two decades. Credit spread for investment grade bonds is just a percentage point! Long-term global real interest rates are at historic lows. 
In the US, the Shiller CAPE, which compares the S&P 500's current price to the 10 year average of earnings, stands at a ratio of 31, indicating that stocks are about 50% over-valued on historic average, a figure exceeded only once in the past 60 years! 
In fact, over a longer historical sweep, the average stock is trading at 73% above its historical average, higher than all but two occasion since 1880 - just before the Great Depression and the run-up to the 1999 dotcom bubble bursting.
It is a moot point as to what is the main driver of the extraordinary low interest rates in developed countries. While on the supply-side the global savings glut, arising from shifting demographics, and on the demand-side structural changes have lowered the cost of capital investment, it cannot be denied that the QE has hastened the downward trend of real interest rates.  

While QE was understandable when the world economy was tottering in 2008, it is surely well past time to step back. But the reluctance of central banks to roll back the extraordinary monetary accommodation is yet more proof that central banks are unlikely ever to be able to take the punchbowl away when the party is on.

Isn't this a compelling enough reason why there should be dynamic macro-prudential regulations that act as automatic counter-cyclical measures to lean against the wind when such bubbles are inflating?

Friday, October 6, 2017

Start-up innovation fact of the day

I have blogged on multiple occasions lamenting the me-too nature of India's start-ups and the lack of enterprises that leverage digital and other technologies in a manner that has the potential to truly transform specific areas. 

In this context comes an article in The Economist about Rivigo, a Gurgaon-based start-up that uses technology and brick-and-mortar to provide a relay of drivers for truckers and in the process both improve the efficiency of logistics of transportation and the welfare of truck drivers,
Rivigo, a startup based in Gurgaon, an industrial city near Delhi, is using a different road map. Since its founding in 2014, it has set up a network of 70 “pitstops” across India, each around 200-300km down the road from each other. From those, it organises a pan-India relay system, where drivers ply the four- to five-hour journey from their “home” station to the next. They then drive back to their starting point in another vehicle, and clock off in time to make it home for supper most nights. Another colleague is then responsible for driving the load to the next waypoint, and so on.


Administering this logistical ballet is no simple task. Clever software predicts precisely when trucks will arrive and leave pit-stops and which petrol stations they might refuel at most cheaply. A trip from Bangalore to Delhi takes eight different legs. But by keeping the truck on the road more or less permanently, it takes a mere 44 hours to cover the distance of 2,200km, compared with the 96 hours a conventional trucker would take once rest breaks, meals and so on are factored in. Rivigo claims it has no trouble hiring drivers for the roughly 2,500 trucks it now owns and operates... Because most of Rivigo’s driving staff live near pitstops in rural areas between cities, it can pay them much less than truckers who live in cities and command an urban-dweller’s premium. Its monthly salaries are nearer the 23,000 rupee mark. In one way Rivigo’s approach is unusual for a startup. It is busy accumulating assets—those pitstop facilities and trucks—at a time when asset-light platforms matching service users with existing asset-owners are all the rage.
The success of Rivigo underlines the importance of marrying virtual technologies with physical infrastructure assets to address complex challenges. Rivigo's success has been built on painstaking work of building the 70 pit-stops and acquiring the 2500 trucks and their drivers. The IT solution that integrates them may have been the easiest part. But the demonstration effect may be compelling.   

It is impossible to predict which way the market will grow. But it is not inconceivable that Rivigo would have triggered a transformation in India's trucking industry over the next five years. A world of truck operators, pit-stop owners, and driver suppliers, anchored around relay logistics management platform providers, each specialised in their respective core competencies, is not very unrealistic. That would be real disruption and a very productive one at that. We need more such start-ups!

Wednesday, October 4, 2017

Jobs displacement fact of the day

Mobile phone repair shops have been a sunrise micro-enterprise in developing countries. There are vocational training institutions which have started courses on mobile phone repairs. A not insignificant share of self-employment loans go to applicants seeking to establish mobile phone repair shops. 

We already have electronic repair shops that dot rural and urban areas in most developing countries. They provide employment to tens of millions of people. 

Now all of them may be coming under threat as companies seek to design products that make physical repairs increasingly difficult. A confluence of factors have come together. At one end, apart from physical design, the components are connected and controlled by software, making repairs very difficult. At the other end, firms seek to capture greater value from servicing the product, rather than lose out to outsiders. 

As The Economist writes, the trend which has covered consumer electronics to even toys, has triggered a "right to repair" movement in the US, with demands for regulation to force manufacturers to make their products more easily repairable. 
Some types of gear, such as photocopiers and medical equipment, have always been hard to mend because of their internal complexity. But what has been the exception is now becoming the rule... Even a John Deere tractor comes with millions of lines of software code, controlling everything from the engine to the armrests. Mobile devices, for their part, are getting ever more densely packed to make them smaller and able to accommodate new components...


Manufacturers are also increasingly erecting less tangible barriers to mending. Leased equipment and devices under warranty have always been out of bounds, but firms now regularly ban tinkering with a product’s software... Firms also withhold technical information, proprietary repair tools and spare parts... Not only do firms want customers to use authorised dealers, but a growing number of products are also no longer stand-alone devices, but rather delivery vehicles for services that generate additional revenues. Smart speakers such as Amazon’s Echo are a case in point. The e-commerce giant may even lose money with the device, but it helps to sell other products and collects reams of data about users. These can be used for additional services or to target advertising. Similarly, wearable technology such as fitness trackers would be much more expensive to consumers if manufacturers did not believe they could monetise the data they collect. If owners could easily tinker with such devices, that could sever the profitable links between product, service and data, which may make manufacturers’ guard them even more jealously.
Either ways, is this one more disturbing trend in the direction of displacing jobs?

Sunday, October 1, 2017

India state capacity fact of the day - Railways edition

In the aftermath of the Mumbai Elphinstone Road overbridge tragedy, Sunil Jain writes about the challenges facing Indian Railways,
In 2012, the Anil Kakodkar panel said India needed Rs 1 lakh crore for fixing safety and said it wasn’t safe to use the 52kg/m tracks or the 43,000 ICF coaches – this got highlighted in all the recent accidents – but the Railways is too broke, so we fix what we can (albeit at a faster pace under Prabhu) and leave the rest to God. In the case of Elphinstone or the 8-10 people who die every day on Mumbai’s commuter trains – an analysis in TheQuint says while the locals are designed to carry 1,320 passengers, they carry over 4,800 – the answer is obvious: build more trains, make the stations bigger … but when the Railways loses Rs 35,000-40,000 crore every year in passenger traffic, of which around Rs 5,000 crore is in suburban traffic like in Mumbai, how do you pay for this even if you want to do all of this; and if by some stroke of luck, you get the money, where will the land come from to build new stations and tracks? If you move to the roads sector, we have 5 lakh accidents a year and 1.5 lakh people die in them – fixing this means more policemen, more speed-breakers, better-designed roads.
I have blogged earlier highlighting the challenges associated with addressing the problems of Indian Railways here and here

It has been reported that people have brought the  problems with the overbridge and the likelihood of stampede to the Railway Authorities, including the Railway Minister. This tweet conveys couple of important messages.
For one, it is classic bureaucracy. It is a well known practice in a bureaucracy for operational or implementation complaints (a corruption intimation or service delivery failure grievance) and requests (a public good or individual welfare benefit demand) submitted by citizens to higher level officials to get routinely endorsed down to the field level functionaries. What is not well known is that the vast majority of these endorsements end up getting lodged without any action. The main reason being that those at the cutting edge are either not equipped or do not have the resources or capacity to address them. It is not that those at the top can do better. 

How can a Divisional Engineer address a particular safety problem, when apart from keeping the show going on (trains running) with the threadbare resources at hand and several other contextual constraints, he also has to attend to tens of such safety problems and several other capital expenditure requirements with resources which can hardly meet a fraction of the needs? And even to meet those requirements, he has to wade through a stifling bureaucratic process. Talk about fighting a battle with both hands tied and eyes folded! 

Of course, an already insurmountable problem is compounded by the intentions, motivations, and incentives of the typical Divisional Engineer, which are not exactly aligned in the direction of achieving the objectives. 

Such submissions to the government have now shifted to the cyberspace. Twitter accords the convenience to do a similar perfunctory exercise of passing the buck. It's just that unlike the office files which have to be obtained through RTI queries, Twitter trails are in the public domain. Nothing has changed, and will change, unless the system has the resources - financial, personnel, and institutional - to be able to deliver. 

Another side is less discussed, but more relevant if we are to address such challenges. It is easy, with our tweet-happy tactile senses, for anyone to shoot off 140 (now 280) characters, especially if it also serves the purpose of both making our psychological selves feel better as well as score social brownie points by signalling one's commitment and interest in public issues. Even better, there is no cost or accountability associated with the tweet. We can tweet whatever we want and then sanctimoniously claim "I told you so" when the issue materialises (as it generally should). Like talk, tweet is cheap! 

But while tweeting away, do we realise that fixing potholes or building overbridges cost money and that does not grow in a tree? Indian Railways has no magic tree to grow the money required to address such concerns. The vast majority of resources required to address them have to come from those who use the trains. But we all know that both individually as well as collectively, we are unwilling to share anything close to the share of the burden required to meet out tweet-happy expectations. 

In a world where even the richest balk at paying their share of taxes and governments are starved of resources, and expectations have been raised sky-high, there is little meaningful that can be done to address such problems. So democratically elected governments are forced into doing events management and quick-fixes. 

Functioning systems require resources and state capacity, as well as civic spiritedness and willingness to shoulder responsibilities. It is a collective endeavour, part of a social compact. The problem is that each side fails to keep its side of the bargain and blames the other. The problems remain unaddressed. Incidents keep happening...