Ear to the ground

What’s common between coaching classes in Bihar and its bahubali leaders?

Both flourish as the state fails to deliver services. They are imperfect alternatives with poor outcomes.

Career Plan Coaching Centre is not much to look at. It is a tiny room, tightly packed with benches and desks, housed in an unplastered brick structure, one half of which is a garage.

A board advertises the services offered by the centre, located in Geetwas, a small village near Araria in northeastern Bihar: tuitions for students between class 8 and class 12.

But, as Gautam Kumar, a mathematics graduate in his mid-twenties who runs the centre, explains, he does not merely provide supplementary education to students lagging in one or two subjects – he teaches the entire school curriculum.

Career Plan is a homegrown response to the larger crisis of public school education in Bihar.

Said Owais Alam, whose son studies under Kumar: “We send our children to these places because there is no teaching in government schools.”

The government school at Geetwas is unable to teach well because of the usual reasons. The school should have 15 teachers but have just nine, said a senior official at the school. Even these nine get pulled into government work – election duty, for instance – which eats into teaching time.

Last year, the government asked the school for information about its students – their names, bank account numbers, the number of days they were present, their parents’ names, about 30 fields of data. The nine teachers, working together, took 15 days to put the information together.

Such demands come at least three or four times a year, the official complained. The school loses as many as 45-60 days of teaching each year. “About 25% of the syllabus gets left out,” he said.

This hurts school attendance. Of the 600 students enrolled at the school, no more than 300 attend regularly. Many students enrol in private schools or rely on places like Career Plan Coaching Centre.

The board on a road passing through Geetwas village advertises the services of Career Plan Coaching Centre.
The board on a road passing through Geetwas village advertises the services of Career Plan Coaching Centre.

When the state fails, who steps in?

Coaching centres like Career Plan operate in the vacuum created by the state’s inability to provide children with a good school education. This inability extends to other crucial governmental functions – like combating arsenic contamination of groundwater and containing the spread of infectious diseases like dengue. As previous stories have shown, the reasons for the state’s poor performance range from low administrative capacity and caste dynamics, to how politics is funded in Bihar.

Needless to say, this lack of performance is not unique to Bihar. Previous stories in this series have highlighted the same trend in every state we reported from – like the collapse of tax collection in Punjab and weakening healthcare delivery in Tamil Nadu. The decay is partly due to political neglect, partly due to the bureaucracy’s failure to handle increasingly complex problems.

What happens when the state fails? In Bihar, a motley bunch of actors – businessmen, NGOs and local strongmen – have stepped into the spaces where the state is weak.

This raises an important question: when individual actors start taking over the functions of the government, what are the outcomes?

When the market steps in

Education in one area where the market has filled the gap in government service delivery.

Bihar’s education landscape has seen a flood of entrepreneurs in recent years. They operate a wide range of establishments, from teaching institutions located in village shacks to plush air-conditioned schools.

The primary reason for this boom is profitability.

At the higher end of the education market, a school with 3,000 students, charging Rs 2,000 as monthly fees, could notch up an annual turnover of more than Rs 5 crores. At the lower end of the market, the fees fall, but so do the costs. As this news report notes, some schools operate out of rented buildings. Said Shyam Jaipuriyar, a member of the Bharatiya Janata Party in Patna, who sends his two children to a private school: “There is a saying here that if a school gets 100 students, it will make money.”

This economics has resulted in a couple of striking trends. As the previous article in this series reported, several of the new schools coming up in Bihar are owned by politicians or former bureaucrats. Politicians started entering the school business in the 1990s, said Jaipuriyar, partly to meet their need to generate cash for elections and campaigning, and partly because schools found it useful to have politicians as partners. “Instead of giving money to 10 small extortionists, it made sense to tie up with one big one and give him a share,” he said. Since then, politicians have entrenched themselves in education. Some started schools from scratch. Others, Jaipuriyar said, “became franchisees of national school chains like Zee’s Mount Litera”.

Coaching classes operate at the other end of this spectrum. Amitava Kumar writes about their ubiquity in his book about Patna, A Matter of Rats: “There were entire streets taken over by hoardings announcing such classes.”

Hoarding of coaching centres take over a street in Bhagalpur.
Hoarding of coaching centres take over a street in Bhagalpur.

Shashi Bhushan, a senior reporter with Dainik Bhaskar, said their numbers started to rise from 2005. He gave three reasons for their growth. First, the quality of teachers in the government system fell. Second, parents’ incomes rose and they could afford to pay more. Third, they offered employment to young people who were unable to find jobs. Gautam Kumar, who founded Career Coaching Centre in Geetwas, had a BSc degree in mathematics. After he failed an exam for a junior government post, he turned into an education entrepreneur.

When NGOs take charge

Like education, Bihar’s health sector has also seen the mushrooming of entrepreneurs running private hospitals and clinics. But higher-end functions that traditionally fall upon the state health department – like disease surveillance, immunisation and disease eradication – are now being handled by NGOs and others.

Take the World Health Organisation. Around 1995, when its global campaign against polio was underway, the international agency, concerned at the poor state of health administration in many Indian states, decided to manage India’s polio eradication programme on its own. District-level offices were set up across the country.

The agency, said a WHO official in Bihar who spoke on the condition of anonymity, began pulling back from most states around 2009 as polio cases started to fall. But it decided to stay engaged in Bihar, Uttar Pradesh, Jharkhand, Chhattisgarh and Odisha. When the polio programme tapered, it expanded its focus elsewhere. “From 2013 onwards, we looked also at kala azar and immunisation,” said the official. “From January 2017 onwards, we have begun focusing on what we call neglected tropical diseases” or communicable diseases which are prevalent in tropical and sub-tropical parts of the earth.

Like the WHO, the Union government’s Integrated Disease Surveillance Programme is also tracking Bihar’s disease burden. When they first came here in 2009, said a senior epidemiologist in the team, they found the state was not collecting health data. “For diseases like measles, diptheria, chickenpox, acute diarrhoea and tetanus, there was no data at all,” he said. “No cases of dengue or chikangunya were reported to us.” The programme started collecting its own data from 2009, trying to put together a health profile of Bihar. “Disease surveillance is the backbone of disease prevention,” said the epidemiologist.

In the last 15 years, Bihar has also seen a spike in the number of NGOs working on healthcare delivery. Some of these are trying to improve the state’s performance on specific fronts. The Bill and Melinda Gates Foundation, for instance, is focusing on reducing the infant mortality rate, maternal mortality rate, fertility and malnourishment, said Sridhar, the technical director of NGO Care-India’s healthcare work in Bihar, who works with the Foundation in the state.

Other international NGOs like Engender and Japiego, said Shakeel Ur Rahman, who runs a non-profit clinic in Patna, are working on family planning and population stabilisation. Yet others are trying to figure out answers to the state’s healthcare problems. World Health Partners, for instance, is running pilot projects in Patna and nearby areas that use private sector services to reduce fatalities – a social franchise model for healthcare.

The strongmen move in

In his book When Crime Pays, academic Milan Vaishnav talks about Anant Kumar Singh, the leader from the Bhumihar caste in Mokama near Patna. Singh is a bahubali leader or local strongman. Despite the many criminal cases against him, he keeps returning to power from his borough of Mokama in central Bihar. Why do the voters there vote him back?

As Virendra, a local reporter in Mokama said, government functioning is weak in Mokama. When people go to Singh, he gets their work done. “Is aadmi ke naam ke bhay se afsar kaam karte hain. Kayi baar unhoney peeta bhi hain.” Officials do the work he tells them to. In the past, he has beaten up those who did not follow what he said.

Bahubalis serve two main purposes. They step in to perform some of the functions the state government should – from resolving small disputes and ensuring that the administration listens to the locals. Second, they ensure their caste or region gets the resources it wants to stay locally dominant. These are not abstract battles. As academic Jeffrey Witsoe writes in Democracy Against Development, a strong territorial undertone runs through the electoral politics of politicians who claim to be caste leaders. In Bihar, as he writes, local groups are struggling to gain control over local resources – “agricultural fields, roads, marketplaces, polling booths or any other place with economic, political or social importance”. He added: “That is another reason why people like Singh get voted in – they can ensure caste-group control over these spaces.”

Agrees Vaishnav, “In contexts where the rule of law is weakly enforced and social divisions are rampant, a candidate’s criminal reputation could be perceived as an asset. In the rough-and-tumble of electoral politics, where there is a dynamic pattern of competition between rival social groups, voters just might value politicians who are willing to engage in extralegal tactics to protect the status of their community.”

Unsatisfactory outcomes

How are each of these players shaping Bihar?

Start with the market. It is limited in scope since it looks for profits. It finds education attractive, but not garbage disposal, as the piles of rotting waste in the towns and cities of Bihar show.

The towns and cities of Bihar have piles of rotting garbage.
The towns and cities of Bihar have piles of rotting garbage.

Even in education, the market delivers uneven results. At the lower end of the education boom, the quality of teaching in the coaching centres looks uncertain. Operating in an unregulated space, a couple of unemployed graduates have taken the place of government teachers.

At the higher end, where schools follow accredited syllabus, parents complain about high fees. Jaipuriyar, the BJP member, said he spends half of his monthly income – Rs 20,000 – on school and transport fees for his two children. “We manage because we live together as a large family,” he said.

Market interventions in healthcare are similarly prohibitively priced for most residents of the state. In this story on arsenic poisoning, Dr Ashok Ghosh, who heads research at the Mahavir Cancer Sansthan, explained what happens to the poor who cannot access charitable institutions – they simply die. Private hospitals are beyond their grasp.

Health NGOs are an imperfect replacement as well. They come with their own capabilities, priorities and organisational constraints. They focus on certain metrics – for instance, the infant mortality rate – rather than wider improvements in community health. Their reach is also limited to some geographical pockets.

As for the strongmen, in their quest to protect caste interests, they end up skewing access to government support and control over local resources in favour of a small number of people. In addition, the rule they establish can be often majoritarian. Often, their constituencies have the worst indices for development. Take Siwan, the stronghold of Shahabuddin, RJD leader and bahubali. It has just one one government doctor for 100,000 people – the worst ratio in all of Bihar.

It is this matrix of state failure and imperfect alternatives which shapes everyday life in Bihar.

All photos by M Rajshekhar.

This is the third and final part of a series on the failure of governance in Bihar. Read the first part here and the second part here. Read the other parts of the Ear to the Ground project here.

We welcome your comments at letters@scroll.in.
Sponsored Content BY 

Behind the garb of wealth and success, white collar criminals are hiding in plain sight

Understanding the forces that motivate leaders to become fraudsters.

Most con artists are very easy to like; the ones that belong to the corporate society, even more so. The Jordan Belforts of the world are confident, sharp and can smooth-talk their way into convincing people to bend at their will. For years, Harshad Mehta, a practiced con-artist, employed all-of-the-above to earn the sobriquet “big bull” on Dalaal Street. In 1992, the stockbroker used the pump and dump technique, explained later, to falsely inflate the Sensex from 1,194 points to 4,467. It was only after the scam that journalist Sucheta Dalal, acting on a tip-off, broke the story exposing how he fraudulently dipped into the banking system to finance a boom that manipulated the stock market.

Play

In her book ‘The confidence game’, Maria Konnikova observes that con artists are expert storytellers - “When a story is plausible, we often assume it’s true.” Harshad Mehta’s story was an endearing rags-to-riches tale in which an insurance agent turned stockbroker flourished based on his skill and knowledge of the market. For years, he gave hope to marketmen that they too could one day live in a 15,000 sq.ft. posh apartment with a swimming pool in upmarket Worli.

One such marketman was Ketan Parekh who took over Dalaal Street after the arrest of Harshad Mehta. Ketan Parekh kept a low profile and broke character only to celebrate milestones such as reaching Rs. 100 crore in net worth, for which he threw a lavish bash with a star-studded guest-list to show off his wealth and connections. Ketan Parekh, a trainee in Harshad Mehta’s company, used the same infamous pump-and-dump scheme to make his riches. In that, he first used false bank documents to buy high stakes in shares that would inflate the stock prices of certain companies. The rise in stock prices lured in other institutional investors, further increasing the price of the stock. Once the price was high, Ketan dumped these stocks making huge profits and causing the stock market to take a tumble since it was propped up on misleading share prices. Ketan Parekh was later implicated in the 2001 securities scam and is serving a 14-years SEBI ban. The tactics employed by Harshad Mehta and Ketan Parekh were similar, in that they found a loophole in the system and took advantage of it to accumulate an obscene amount of wealth.

Play

Call it greed, addiction or smarts, the 1992 and 2001 Securities Scams, for the first time, revealed the magnitude of white collar crimes in India. To fill the gaps exposed through these scams, the Securities Laws Act 1995 widened SEBI’s jurisdiction and allowed it to regulate depositories, FIIs, venture capital funds and credit-rating agencies. SEBI further received greater autonomy to penalise capital market violations with a fine of Rs 10 lakhs.

Despite an empowered regulatory body, the next white-collar crime struck India’s capital market with a massive blow. In a confession letter, Ramalinga Raju, ex-chairman of Satyam Computers convicted of criminal conspiracy and financial fraud, disclosed that Satyam’s balance sheets were cooked up to show an excess of revenues amounting to Rs. 7,000 crore. This accounting fraud allowed the chairman to keep the share prices of the company high. The deception, once revealed to unsuspecting board members and shareholders, made the company’s stock prices crash, with the investors losing as much as Rs. 14,000 crores. The crash of India’s fourth largest software services company is often likened to the bankruptcy of Enron - both companies achieved dizzying heights but collapsed to the ground taking their shareholders with them. Ramalinga Raju wrote in his letter “it was like riding a tiger, not knowing how to get off without being eaten”, implying that even after the realisation of consequences of the crime, it was impossible for him to rectify it.

It is theorised that white-collar crimes like these are highly rationalised. The motivation for the crime can be linked to the strain theory developed by Robert K Merton who stated that society puts pressure on individuals to achieve socially accepted goals (the importance of money, social status etc.). Not having the means to achieve those goals leads individuals to commit crimes.

Take the case of the executive who spent nine years in McKinsey as managing director and thereafter on the corporate and non-profit boards of Goldman Sachs, Procter & Gamble, American Airlines, and Harvard Business School. Rajat Gupta was a figure of success. Furthermore, his commitment to philanthropy added an additional layer of credibility to his image. He created the American India Foundation which brought in millions of dollars in philanthropic contributions from NRIs to development programs across the country. Rajat Gupta’s descent started during the investigation on Raj Rajaratnam, a Sri-Lankan hedge fund manager accused of insider trading. Convicted for leaking confidential information about Warren Buffet’s sizeable investment plans for Goldman Sachs to Raj Rajaratnam, Rajat Gupta was found guilty of conspiracy and three counts of securities fraud. Safe to say, Mr. Gupta’s philanthropic work did not sway the jury.

Play

The people discussed above have one thing in common - each one of them was well respected and celebrated for their industry prowess and social standing, but got sucked down a path of non-violent crime. The question remains - Why are individuals at successful positions willing to risk it all? The book Why They Do It: Inside the mind of the White-Collar Criminal based on a research by Eugene Soltes reveals a startling insight. Soltes spoke to fifty white collar criminals to understand their motivations behind the crimes. Like most of us, Soltes expected the workings of a calculated and greedy mind behind the crimes, something that could separate them from regular people. However, the results were surprisingly unnerving. According to the research, most of the executives who committed crimes made decisions the way we all do–on the basis of their intuitions and gut feelings. They often didn’t realise the consequences of their action and got caught in the flow of making more money.

Play

The arena of white collar crimes is full of commanding players with large and complex personalities. Billions, starring Damien Lewis and Paul Giamatti, captures the undercurrents of Wall Street and delivers a high-octane ‘ruthless attorney vs wealthy kingpin’ drama. The show looks at the fine line between success and fraud in the stock market. Bobby Axelrod, the hedge fund kingpin, skilfully walks on this fine line like a tightrope walker, making it difficult for Chuck Rhoades, a US attorney, to build a case against him.

If financial drama is your thing, then block your weekend for Billions. You can catch it on Hotstar Premium, a platform that offers a wide collection of popular and Emmy-winning shows such as Game of Thrones, Modern Family and This Is Us, in addition to live sports coverage, and movies. To subscribe, click here.

This article was produced by the Scroll marketing team on behalf of Hotstar and not by the Scroll editorial team.