A Lost Nation

This post was triggered by this innocent mail from one of my students

Sir, i want to know your views regarding corruption in CWG (Common Wealth Games).

I read that a lot corruption is happening in CWG? like
1:Renting a chair for Rs 8400.
2:Renting a 100 litre refrigerator for Rs 42000.
3:Buying a roll of tissue for Rs 4100.
4:Renting a treadmill for Rs 10 lakh.

sir,is it a reality that such kind of corruption is happening.
If India is unable to host CWG well...sir it would be a really shame for our country..


DO u think India did right in hosting CWG despite the fact that we lack infastructure to host such big event???

Got me thinking and Googling - here are some randomly organised results (brace yourself for a long post)

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Chattisgarh government decided to grant exploration and mining rights in a dozen iron ore-rich pockets in Hahaladdi to a Rs one-lakh firm with zero experience (later quashed by the courts). The underlying method is that such companies would sell the mining rights at obscene profits to real mining companies. Who will be the beneficiary - well !! if someone goes deep one shall invariably find the same officials/politicians who awarded the rights in clear violation of rules/laws.

(Source - TOI)

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The mining scam in Karnataka could easily be worth Rs 2,500 crore (Rs 2.5 billion) says Justice Santosh Hegde, the state's Lokayukta, who has been investigating the scam for the past three years.



The scale of corruption is of a magnitude that India has not witnessed, he says. Chief Minister B S Yeddyurappa has recently admitted that 35 lakh (3.5 million) metric tonnes of iron ore have gone unaccounted for. Let us not just sit back and think that is the entire extent of the scam.

(Source - rediff)

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MP CM Mr. Chouhan is now in the eye of a storm over an alleged Rs 100-crore land scam in Indore. Ever since an anti-corruption court in Indore on April 6 ordered the Lokayukta to register a case and probe the allegations against his Commerce & Industry Minister Kailash Vijayvargiya, regarded as Chouhan's second-in-command. He is accused of clearing the sale of a plot of land owned by the Indore Municipal Corporation (IMC) while he was mayor in 2004.


The IMC had leased out the three-acre plot in downtown Indore to Dhanalaxmi Chemicals for 30 years in 1980. It is alleged that Vijayvargiya had presided over the sale of lease to Nanda Nagar Credit Cooperative Society headed by his lieutenant and MLA Ramesh Mendola for Rs 1.28 crore while the prevailing market price was more than Rs 65 crore. Mendola was a member of the mayor-in-council of the IMC. It is alleged that since the industry was a mere tenant, it had no right to sell the lease, nor was the IMC empowered to sanction it.

(Source - IndiaToday.in)

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The biggest corporate scam in India has come from one of the most respected businessmen.

Satyam founder Byrraju Ramalinga Raju resigned as its chairman after admitting to cooking up the account books. His efforts to fill the "fictitious assets with real ones" through Maytas acquisition failed, after which he decided to confess the crime. With a fraud involving about Rs 8,000 crore (Rs 80 billion), the epicenter of the fraud has just achieved bail after incarceration of more than a year and half.

(Source - rediff)

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The Telgi case is another big scam that rocked India. The fake stamp racket involving Abdul Karim Telgi was exposed in 2000. The loss is estimated to be Rs 171.33 crore (Rs 1.71 billion), it was initially pegged to be Rs 30,000 crore (Rs 300 bilion), which was later clarified by the CBI as an exaggerated figure. In 1994, Abdul Karim Telgi acquired a stamp paper license from the Indian government and began printing fake stamp papers.
Telgi bribed to get into the government security press in Nashik and bought special machines to print fake stamp papers. Telgi's networked spread across 13 states involving 176 offices, 1,000 employees and 123 bank accounts in 18 cities.

(Source - rediff)

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‘Mr Lalit Modi has had a trail of failed ventures and defaults till four years back but has a lifestyle now that includes a private jet, a luxury yacht and a fleet of Mercedes S class and BMW cars all acquired in the last three years.

(Source - Economic TImes)

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Actually I can go on and on and on and on....................... and then we have this current one (or has it already gotten stale) the Common Wealth Shame.

Where am I headed? We have become a country in the grips of the corrupt. A system that is Corrupt down to the last bone. And what's happening in the name of common wealth games is just one more in the series of ever larger, ever more brazen, ever more engulfing - an all encompassing corruption personifying an increasingly hollow nation with those millions of honest people - helplessly living through a maze of paying 10-20 rs. through everyday street level corruption.

So friends, the issue is much beyond the Common Wealth Games. No we did not commit any error in taking the responsibility to conduct them. And given the Indian spirit of getting things done - I have a hunch that they will be successfully conducted. Yeah !! I really believe that. The issue is that we are fast turning into a country where your very survival is going to depend on how many politicians, goons and Policeman are you networked with (read - how many of them are greased by you). And how do you grease their palms by just being another in the chain - use corrupt means, dodge taxes, corner deals illicitly or simply encroach in public/pvt. properties. Which means your growth will be restricted by the strength of determination to remain honest. The more honest you remain - the more rare your breed - and the more difficult for you to grow beyond what you are.

"Come on, it can't be that bad. I know of so many people who are honest in our country. " Some of you would protest.Yeah !! I also know quite a few. Most of them are not even in the mainstream of this country's affairs - keep aside they having some power to make a difference. The rare few in the establishment who try to initiate cleansing are conveniently sidelined into obscure corridors pushing papers. Tax officials, auditors, anyone "sarkari" when they visit you or check your books they assume a minimum percentage of evasion - even when your books appear to be perfectly in order. And so if everything is in order you are supposed to pay the bottom of the inverted pyramid rates (of bribe - if you did not already guess it). Nobody believes you if you claim that everything that you earn is reflected in your balance sheet. You will often get that coy smile and an irreverent - "Aisa thodi hota hai" (It does not happen in this manner).

According to an estimate the Indian black economy is 40% of our GDP. Economic Times estimates "If black money is declared by individuals or corporate houses as income, it becomes legal and would be taxed at 30%. If all the estimated black money is declared, it could generate a tax revenue of Rs 7,50,000 crore for the government! This is more than total tax collection at Rs 6,41,000 crore for 2009-10. Kumar puts the potential tax revenue figure much higher at around Rs 10,00,000 crore." The burden on the common man - honest tax payers will probably reduce by upto 80% if we are able to wipe out corruption in all its form. Ambitious??? OK !! Reduce corruption to less than half of current levels and still the common man is looking at a substantially better life.

So why does it not happen? Surely there are well meaning people who want to cleanse the rot. The problem is that the cancer of corruption is far too wide and deep, even in the Indian psyche, that small steps would not matter, neither would big action matter. Nothing short of a revolution will help this scenario. What would be the shape of this revolution - Economists have already named it - "The Third Generation Reforms".

Notice that in all cases that I listed above and in those I did not list - the villain of the case finally went unpunished. Media raked up the issue - it was fed to the masses - villain arrested/resigned/cornered, enquiry commissions, committees, investigation teams etc. appointed, and then suddenly the whole issue goes out of the media. Agencies move on to next cases and the fleeting public memory is fed with another scandal, another person/organisation. The question that faces us is what happened to the earlier cases.

There are reasons to believe that what happens is that all relevant parties right from the investigation teams, to the police to various politicians will probably be managed (read bribed) and so they will all connive to use dilatory techniques taking one step at a time, till the time an entire issue is washed out of public memory. Quietly then, toothless charges are framed, a sham courtroom drama happens which if needed can be extended infinitum and the guy in question will be released of all charges.

Yeah !! all too familiar. Whats wrong?
First, the corruption in police. Police would first like to avoid registering cases and when they do, the investigation done is sloppy. Second, slow pace of executing so many thousands of cases piling up with the judiciary.

Proactive reforms in these two critical components is probably the only way for our vibrant and functioning democrcy. Thats our last hope - the Third generation of reforms.

Reforms in policing would mean to train and motivate personnel in police to enable them to develop competence of conducting copy book investigating; paying the police force better, equipping them better with physical and conceptual infrastruture; increasing transparency by computerising police operations and  making available to public, concrete information on status of all cases/complaints registered; and to catch the lazy, slothful and corrupt from the forces and to weed them out - forget punishing them, simply retire them with all there retirement benfits - there punishing will cost the exchequer more.

Judiciary needs to be galvanised into ensuring that it includes speed as an equally important parameter to other tenets of justice. Actually it appears that in India - the speed of judicial system is poor more because of slow and sloppy investigation and meandering techniques of the legal fraternity. There might be administrative bottlenecks as well - but computerisation and online dissemination of information should help that.

I would simply end this piece by a very thoughtful quote from J Mulraj

The India story keeps looking good except for the sorry state of governance. Leading tennis players have not been paid past dues, and are threatening to boycott the CWG, yet the OC has the money to pay Rs 4000 for a toilet roll! (Several of its deals include a return of the asset after a 15 day use; one hopes the same is not the case for the toilet paper). BJP MPs are protesting rampant corruption in the mid day meal programme, and pointing to the 'unfit for human consumption' food given to school children; yet there is a surplus of foodgrain rotting in open fields for want of storage. There is enough money to hike MPs who walk out half the time from their job, but not enough to keep India in defence preparedness. The only aircraft carrier we have is inadequate and we haven't bought a major gun since the Bofors purchase. This abysmal governance is the key risk factor. Otherwise, as Aamir Khan would sing, aaaaaal is well

I hope the Government is listening and may be they will do something about it.

Indian Rupee has a Symbol - Big deal?

This is bound to be a small post. However, the start (for me) was a really interesting one. I have been thinking of writing on this new symbol that our currency just got. And almost two weeks later when I could sit down and log in to blogger - Voila - a new reader on the blog had this comment.

It's great..really great job..!!

Looking forward to read more from you esp. on "our Indian Rupee sign" ...!!

So I guess it must be a good omen. Here we go

Rupee has a new symbol. Period.
I have been told by everybody that I should be proud of this because
1. We are only the fifth country to have a symbol after USA, Europe, Japan and Britain.
I wonder do we count anywhere close to these countries as an economy. May be we are expected to, in about a couple of decades - but proud we must be of having a symbol. phew!!

2. We might suddenly be recognised globally because soon keyboards will carry this new symbol.
I wonder whether people in general and media in particular realise that the symbol has to go through a unicode committe before it is accepted and recognised globally. Only after that will our Govt. be able to mandate hardware manufacturers to carry the symbol in their produce.
However, enthusiasts have already found out ways to type it - find here if interested.

3. Because it is touted as a positive step towards India becoming a financial super power.
Alas, I wonder - will we ever get over with our fascination with symbolism, hyperbole and overtly optimistic beliefs. Yes for all I write here - I am a firm believer in India's future. But for god's sake - someone tell me how a symbol for our currency is a step towards economic supremacy. Its a pathetic argument.

The truth is - achieving Global recoginition would require the Rupee to be a strong currency - something in whose inherent strength the citizens of this world have firm belief. Try purchasing something in exchange of the Indian Rupee in a country outside India and you would know that we are not even a few miles in reach of such a position. Our currency is not even fully convertible - so imagining that it could soon become a reserve currency for the world is plain wishful thinking. Even with all its woes the American Dollar, The Euro, The Pound and the Yen are far stronger and are expected to remain so for a decade or more, that is assuming the Indian Govt. continues to reform and is able to aggressively correct its economic mess.

The timing of the announcement, even if inadvertantly, was sublime. The country was reeling under the pressure of inflation exacerbated by deregulation of petrol prices and the Govt. seemed to be on the defensive with a very comprehensive "bandh" called by the opposition parties. Suddenly with the launch of the new symbol the country seem to be have galvanised. The media suddenly forgot all discussion about inflation. Govt. received a welcome breather. The foolish common man of India (courtsey the film "Wednesday") was fooled again into believing that his and his country's time is about to change. No sir, nothing like that is happening. A few weeks from now - it will be business as usual and the Rupee symbol will have to be incorporated in the CBSE text books for next year and forgotten. Period.

Ps.

BTW I think the symbol is rather cool. Simple, Indian as well as western, manages to remain a currency symbol as well. Kudos to Shri D Udaya Kumar, our homegrown IITians to come up with this simple and brilliant symbol. I sincerely hope that his design finally becomes a household symbol across the earth.

Finally, A Big Bang Reform

On 25th of this month (june 2010) the Indian Govt. took a major step forward in reforming the Indian Economy. It freed petroleum prices from all regulation and indicated its intention to do so for diesel as well. That's not all, it increased diesel prices by Rs. 2 a litre, LPG by Rs. 25 a cylinder and even increased the kerosene prices, long untouched from price hike. Read the details here.

Now opposition parties have a real issue to thrash the Government on. This statement sounds derisive of the opposition parties and yet there are real short term implications which are worrisome. Inflation, which has stressed the lives of common person on the street in the last several months, will flare up further. in fact this decision would result in price rise of a fairly universal nature affecting everyone including the middle class voter of this Govt. who had been benefited the most in the recent decade of reforms and Globalisation. If so, why did the Govt. take this step and risk facing ire of its vote bank? Why this shift (by no means a sudden one) from a long held policy of managed fuel prices? further, why am I happy about this decision?


First a quick reminder of the situation. According to CRISIL the oil PSUs were projected to lose Rs 74,300 crore on selling petrol, diesel, domestic LPG and kerosene below cost in FY10-11. The current hike in prices would recover Rs. 25,000 crores and would still leave a gaping hole of close to Rs. 50,000 crores to be subsidised by the Govt. Just for the sake of argument if the Central Govt. were to subsidise this fully - this adds three fourth of percentage point to its fiscal deficit. So here is one compelling reason for the Government to seal a leakage which was showing signs of going out of hand.


But wasn't this always the case, and the Govt. has been dealing with it in this way, unique only to us, Srilanka and Bangladesh, in this entire world. So why take the risk now?

Lets check another side of the picture - it is interesting to note that fuel prices are high in India because of its federal structure as well. Read this informative piece to get the complete picture - but in nut shell what it says is that state Governments levy a VAT of between 20% to as much as 35% on petrol. (In MP this happens to be one of the highest at 35%). On an average the central plus state taxes are equivalent to 40% of the price you pay for every litre of petrol, with the lion's share going to the state Govt. Further, what this means is that a price hike in fuel prices gets amplified at the state level, filling the coffers of the state govt., and creating a villain out of the central of Govt.
This is not all. Sales tax or VAT accounts for over 60% of the aggregate taxes of states, a good percentage of this comes from the levy on fuels. What this means is that states are heavily dependent for their revenues on taxes from fuels as they are unable to generate resources from where they should - levy of fee on services provided to citizens (but then that would be unpopular - isn't it?). In other words then - the Central Govt. when subsiding the fuel prices in part subsides the state Govts as well for their mismanaged administration.

What the central Govt. has done is that they have become a one time big villain now and then have left the states to defend themselves in future. Soon the media will start training its guns on state governments like Andhra Pradesh, MP and Tamil Nadu asking why are citizens paying such high taxes on petroleum. Better still Mr. Murli Deora has already asked the state Govts. to reduce taxes so as to mitigate the problems of people on the prices front. So the heat will soon turn towards the state Govt. Can you see why the opposition parties aren't creating half the "hulla" - of what they would on much more trivial matters. Well if you did not guess it already, most state Govts. belong to parties in the opposition at  the centre.

And then there is the ubiquitous connection between policy making in India and the Ambanis. Half a decade back the Big bro entered Petroleum retail trying to create a presence in the entire value chain of its flagship petroleum businesses. Many of us would remember the fate of the Reliance petrol pumps across the country which had to close shop (temporarily, it now turns out). I wrote this piece way back in May 2006. Little was I aware that I was so bloody insightful. I of course do not know this for sure - but why does my gut tell me that the connection is far too easy not to make out? So here is the story of why the government might have bitten the the proverbial bullet.

However, I am happy with he decision. Yes, I know what I am talking about. After lots of deliberation I bought a mid-sized car three years back - a delight to drive and a monster at the petrol pumps (I pay almost 5+ Rs. a KM to drive it on old prices of petrol). Little did I knew that Dr. Manmohan singh's govt. will stop sharing the cost. :)


What makes me happy is that on a macro front this is a step in the right direction. The monstrous and pointless subsidy on automobile fuels is a structural anomaly in the economy. Let me explain. When Central Govt. subsidises fuels - who pays the cost? The taxpayers (I am tempted to write - honest taxpayers). While most profligate consumers of petrol are not these honest taxpayers. So indirectly the Govt. is making you and me pay for these consumers (including the Govt. which is the single most profligate consumer of petrol). My very modest parents purchased their first car and ran it just over 60,000 KM in ten years. I am sure that if you are reading this you can relate many of their ilk. They have been paying for these subsidies for years now.

What decontrol has done is that it will make people pay for their usage. Simple. This can pave the way to reduced deficits for the Govt. (as they will not pay the subsidy at least not to this extent) which will result in two welcome developments for the honest tax payers - further rationalisation of taxes (read reduced tax rates) and a stronger rupee, both of which will help the "Aam Aadmi" in the long run. This Govt. is only two years into this tenure - they might be expected to reap some of the benefits by the end of this tenure, by which time the new Direct Tax Code might also become a reality. Cool. :) So while inflation would happen - I get a feeling that the step will also make the middle class more able to pay the higher costs.

What about the pain during the transition? Well, one of my profs at the IIML said way back in 1996 - that is a cost of past sins. But my take is that the decision is positive to the Indian economy in the long run.

The Best Teacher - An anecdote

Received this mail from my school time friend - Ajay. Could not resist putting it up here. If you have anything to do with the business of education don't miss it. If you have nothing to with the business of education - still don't miss it. Thanks Ajay for Sharing.
- Akash
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As she stood in front of her 5th grade class on the very first day of school, she told the children an untruth. Like most teachers, she looked at her students and said that she loved them all the same. However, that was impossible, because there in the front row, slumped in his seat, was a little boy named Teddy Stoddard.Mrs. Thompson had watched Teddy the year before and noticed that he did not play well with the other children, that his clothes were messy and that he constantly needed a bath. In addition, Teddy could be unpleasant. It got to the point where Mrs. Thompson would actually take delight in marking his papers with a broad red pen, making bold X's and then putting a big 'F' at the top of his papers.

At the school where Mrs. Thompson taught, she was required to review each child's past records and she put Teddy's off until last. However, when she reviewed his file, she was in for a surprise.

Teddy's first grade teacher wrote, 'Teddy is a bright child with a ready laugh. He does his work neatly and has good manners... he is a joy to be around..'

His second grade teacher wrote, 'Teddy is an excellent student, well liked by his classmates, but he is troubled because his mother has a terminal illness and life at home must be a struggle.'

His third grade teacher wrote, 'His mother's death has been hard on him. He tries to do his best, but his father doesn't show much interest, and his home life will soon affect him if some steps aren't taken.'

Teddy's fourth grade teacher wrote, 'Teddy is withdrawn and doesn't show much interest in school. He doesn't have many friends and he sometimes sleeps in class.'

By now, Mrs. Thompson realized the problem and she was ashamed of herself.. She felt even worse when her students brought her Christmas presents, wrapped in beautiful ribbons and bright paper, except for Teddy's. His present was clumsily wrapped in the heavy, brown paper that he got from a grocery bag. Mrs. Thompson took pains to open it in the middle of the other presents. Some of the children started to laugh when she found a rhinestone bracelet with some of the stones missing, and a bottle that was one-quarter full of perfume.. But she stifled the children's laughter when she exclaimed how pretty the bracelet was, putting it on, and dabbing some of the perfume on her wrist. Teddy Stoddard stayed after school that day just long enough to say, 'Mrs. Thompson, today you smelled just like my Mom used to.

After the children left, she cried for at least an hour. On that very day, she quit teaching reading, writing and arithmetic. Instead, she began to teach children. Mrs. Thompson paid particular attention to Teddy. As she worked with him, his mind seemed to come alive. The more she encouraged him, the faster he responded. By the end of the year, Teddy had become one of the smartest children in the class and, despite her lie that she would love all the children the same, Teddy became one of her 'teacher's pets..'

A year later, she found a note under her door, from Teddy, telling her that she was the best teacher he ever had in his whole life.

Six years went by before she got another note from Teddy. He then wrote that he had finished high school, third in his class, and she was still the best teacher he ever had in life.

Four years after that, she got another letter, saying that while things had been tough at times, he'd stayed in school, had stuck w ith it, and would soon graduate from college with the highest of honours. He assured Mrs. Thompson that she was still the best and favorite teacher he had ever had in his whole life.

Then four more years passed and yet another letter came. This time he explained that after he got his bachelor's degree, he decided to go a little further. The letter explained that she was still the best and favorite teacher he ever had. But now his name was a little longer.... The letter was signed, Theodore F. Stoddard, MD.

The story does not end there. You see, there was yet another letter that spring. Teddy said he had met this girl and was going to be married. He explained that his father had died a couple of years ago and he was wondering if Mrs. Thompson might agree to sit at the wedding in the place that was usually reserved for the mother of the groom. Of course, Mrs. Thompson did. And guess what? She wore that bracelet, the one with several rhinestones missing. Moreover, she made sure she was wearing the perfume that Teddy remembered his mother wearing on their last Christmas together.

They hugged each other, and Dr. Stoddard whispered in Mrs. Thompson's ear, 'Thank you Mrs. Thompson for believing in me. Thank you so much for making me feel important and showing me that I could make a difference.'

Mrs. Thompson, with tears in her eyes, whispered back.. She said, 'Teddy, you have it all wrong. You were the one who taught me that I could make a difference. I didn't know how to teach until I met you.'

Goof up again or is it something else....

Govt. came up with an ordinance on the issue simmering between the IRDA and the SEBI over who of the two should be regulating the ULIPs (Unit Linked Insurance Plans). Here is the news. Govt. has decided to take the IRDA side. Now that's puzzling and curious - everything the ordinance, its logic and its timing.


First a background -

ULIPs are considered/treated as Insurance in India  however they are sold as investments. Meet an insurance seller and they would start telling you how the ULIP will multiply your money and save tax - no one is really interested in telling you that its an insurance first.


To Mutul Funds, which are pure investments and have nothing to do with Insurance ULIPs are a competition.


One does not need to be an expert to see that in India, Mutual Funds (MF) are a better regulated and hence more transparent industry than Insurance. A MF manager has to inform investors about the way money in a fund has been invested. Recent improvements in regulation has stripped MF mangers of the ability to charge entry loads and commisions for their agents to be charged to their customers. On the other hand we very rarely come to know of what is being done to our money invested in the ULIPs. It is a well known fact that the upfront charges that a ULIP customer ends up paying are plainly ridiculously high. Further ground reality is that the agent of the Insurance company often misleads the customer on these charges and their real impact on their investment.

Recently SEBI asserted that the ULIPs should also comply with the rules and norms of SEBI as it was basically an investment product and hence deserves to be regulated by SEBI. IRDA took strong obejections. The question is currently subjudice whether SEBI's interpretation holds.

I am not an expert in investing - but common sense tells me that - SEBI had a strong case. ULIPs are an investment option wrapped in the garb of insurance. In fact read this excellent piece by Dhirendra Kumar making a case for stripping ULIPs' returns of their tax free status as well.

The ordinance by the Govt. makes the legal case in the court irrelevant. What it has effectively done is that it has prevented the court to pronounce its stand on the question. Why the hurry? Why this ordinance just a few days before the court hearing on the matter was due. And why in favour of ULIPs?

Obviously there are political compulsions - a fairly large number of investors are invested in ULIPs, Quite large numbers of them are unsuspecting middle class retail investors in search of future security, lured by attractive looking returns. Most of these were confused in the ongoing debate wondering whether they made a mistake committing themselves to the ULIPs. This pronouncement would make them feel comfortable as they would again see others buying ULIPs as they did earlier. For Insurance companies it will be business as usual. This would not rock the boat - so to say for the Govt. An ordinance timed now obviously means that even Govt. senses the possibility that the court might accept the logic of SEBI's orders.

Now, don't get me wrong. I am not saying ULIPs are useless products - but they have been packaged to misguide. It has a upfront cost heavy structure which makes them strictly a very long term option. Mutual funds are a far better option for an investor. Further, the ULIPs (read insurance companies) are opaque in their operations.  And, all said and done, a normal investor can, with just a little bit research, invest in MF at substantially lesser cost and achieve almost the same, if not better, returns.
 
Strictly from policy making view - Govt. seems to have snubbed the better regulator. There is a strong case for investors to be encouraged to choose MFs over ULIPs (or bringing ULIPs closer to MFs in their operations & sales) and some help from regulators would have been a good idea. Govt. seems to have taken a technically administrative view that IRDA is for insurance and have ignored the basic premise in the issue - that of ULIPs not really being an insurance.
 
SEBI although lost this round but did great service to common investors. Now IRDA will have to be more watchful and proactive - as they will be watched by everyone with great interest. My take is that IRDA will be pushed into reforming Insurance industry to make it more transparent and responsible.
 
My problem however, is that is this just another case of incompetent goofup by the Govt. or there is more behind the scene games?

Complacent scepticism : the Indian way of life?

"Mummy, Aaj school nahi Lagega - Bahut bada accident ho gaya hai. 1000 se jyada log mare hai" (Mom, Today there will be no school - there has been a big accident. More than 1000 people died)

Horrible but true. This was my first reaction to the news of "Bhopal Gas Leak Tragedy", which reached us through the morning newspaper (you see there were no 24/7 News Channels & no inetrnet).

I was twelve then - a boy who was secretely happy that he wouldn't have to go to school. As the realisation of more than 15000 death that fateful tragic night sinked in - its real impact distilled deep down in my conscience. I grew up to feel ashamed of that first reaction of mine.

I feel more ashamed today when - 26 long years after - eight accused have been convincted. One would expect to feel cathartic on finally listening to the news of the convictions. But what in this world would explain that the tragedy was presented to the court by the CBI (no less) as "culpable homicide not amounting to murder", "Gross Negligence" and "Causing death by Negligence". Ok. You convicted them - yeah you did - and awarded them what? A two year sentence to each of them from which they recieved an immediate bail for a ludicrous 25000 rs. each. The company was fined a princely sum of - hold your breath - Rs. 5 lakhs.

Should there be some difference between a car accident which killed a couple of people and a poisonous gas leak that led to 15000+ deaths, a generation of children with congenital defects (which might run in their clan for all we know), polluted air, water & soil; people with damaged psyche which can possibly never be addressed properly?

Here is an idea - the kith and kin of victims should run a truck over these eight convicted and then should fight a 26 year long case with their families finally getting convicted for "culpable homicide not amounting to murder" punishable by a maximum of two years that too bailable for laugably low amounts of deposit.
No I am not going to blame this on our system, weak CBI, corrupt politicians or even not to the excruciatingly slow pace of justice delivery. That a lot of "analyst" will do. What is important for us to ponder upon is how does all these happen in our country so easily? How do we the citizens allow this to happen? My take - the culture of "Complacent Skepticism".

Look around yourself - dusty, poorly built roads, corruption scandals one after the other - be it beautification of city or be it a housing project for people, Forests being cut, encroachments increasing, IAS officers and politicians amassing disproportionate (the word is really modest) amount of wealth, goons becoming politicians, even ministers. Wealthy are mighty - they can get away with practically anything. The size and depth of rot increases horrendously with every new scandal being unearthed. Also those involved in the scandals become increasingly more brazen as they cruise through case after case, not even bruised - in some cases - actually stronger than ever before.

The formula is simple - become thick skinned (read "without any ethics"), drag the issue till the media gets bored of carrying it any further, possibly buy the investigating agency/officers, use shrewed lawyers to entangle the courts in dilatory tactics, either let the case continue for decades or better still simply buy your way out of the charges or at best to the simplest possible conviction which can then be appealed against further - till then you are out on bail on a miniscule part of your ill gotten crores.

And what do we do about it? Everytime one such accident, scandal, negligence, corruption is unearthed - what is the typical reaction? Well the one I hear most now a days is "Kuch Nahi Hoga - yeh India hai". Absolute and total - the scepticism. Then when actually nothing happens for some time the reaction is "See !! I told you." Yes - we are amazingly complacent - almost smug - in the knowledge that we had predicted the outcome accurately. And so the life goes on.

If all these is happening around us with such impunity - we are the ones who are responsible. We get the systems we deserve, we get the rulers we deserve and we get the life we deserve. Our inaction, quiet tolerance of everything wrong around us, big or small, is alone responsible.

So friends speak up. And make it a habit to speak up everytime. As always I am asking for too much. But it really is time to ask for every bit of that too much. Please.

A rare gem

Received this poem through mail - Author not known to me. But worth sharing, Beautiful thought.

I was shocked, confused, bewildered

As I entered Heaven's door,

Not by the beauty of it all,

Nor the lights or its decor.

But it was the folks in Heaven

Who made me sputter and gasp--

The thieves, the liars, the sinners,

The alcoholics and the trash.

There stood the kid from seventh grade

Who swiped my lunch money twice.

Next to him was my old neighbor

Who never said anything nice.

Herb, who I always thought

Was rotting away in hell,

Was sitting pretty on cloud nine,

Looking incredibly well.

I nudged God, 'What's the deal?

I would love to hear Your take.

How'd all these sinners get up here?

God must've made a mistake.

'And why is everyone so quiet,

So somber - give me a clue.'

'Hush, child,' He said, 'they're all in shock.

No one thought they'd be seeing you.'

JUDGE NOT!!

Remember...Just going to a place of worship doesn't make you

religious any more than standing in your garage makes you a car.

Every saint has a PAST...

Every sinner has a FUTURE!

Why 3G Spectrum price tag is just not right.

Indian Govt. gets a whooping 68K crores from the auction of 3G spectrum. Check the news here. Looks like good news isn't it? Pranab da only planned for Rs. 35K cr. revenue in his budget. This difference alone would mean that he can bring down fiscal deficit by half a percentage point. Magical good news. Not really !! Here is why.

Not many of my age would forget what a luxury a telephone was in our days. My dad booked one with dot when we hardly needed one (or at least thats what we always believed). Telephone was not really a tool to communicate but something that businessmen would need. Our connection was given to us in four years time. Communicating with friends, relatives used to be time consuming and expensive.

Then came private telephony, pagers, mobile telephony service and then Internet (not necessarily in that order). The initial airtime charges for mobile telephone were in the range of 14-30 Rs. per minute. But soon companies understood the sheer scale of the business. Today talk time on mobile is virtually free compared to those days - and what has that done to our lives?

Look around yourself & you would find the way communication revolution has changed our lives (transformed is a better description). Today a cellphone has become a very cheap substitute for an office in lots of businesses. Any kind of home service business (libraries, groceries, hardware support, taxis etc.), brokers (from share mkts, to real estate to commodity traders), Milkman, housemaids, packed food services, information dissemination (ask me services for all businesses). None of these and many more need an office now. All they need is a phone number. Thats all. It has reduced the substantial advantage that businessmen with fixed assets had over startups.

It has given families confidence to let their children (including girls) to travel around the globe in pursuit of better education and superior professions without losing the family link or without feeling insecure. This single fact has probably contributed to the country's GDP more than what the country would have invested in the infrastructure to bring about this telecom revolution.

It has made information flow easier and hence speeded up buying decisions. It has reduced arbitrage opportunities and has made middleman less relevant and hence made them more honest and efficient. It has taken voice based services to locations where it is better value for money. All in all it has made transactions more transparent, easy, fast and cheap. It has provided more people jobs then could ever be imagined.

If you have read this post till now - you probably have understood where am I taking you. What telephony did to us in the last two decades is what high speed wireless internet over the phone can do to us in less then five years. Think if you could seamlessly book tickets, trade on the capital mkts., carry banking transactions, shop everything and anything, look for options/information, compare products, communicate - email and socialize from anywhere in the world at any time, at jet speed and at almost no cost - what would happen?

Economy will grow, per paisa productivity improves, people (yes aam aadmi) benefit. Sure all these would happen. But sadly the huge price Telcos are paying will make this happen slower then the pace at which I would love to see it happen. It would have been great if Govt. would have given away the spectrum free and would have imposed heavy penalty for non-usage or underusage of the spectrum. This would have speeded up the revolution.

Transaction and access costs will be higher then the reach of most people who could really use these services. Initially this might only benefit businesses that could can afford the additional cost or will be used by children of rich people to download heavy stuff (games, videos etc) from the web, or would be used by Investment bankers to make jazzy presentations from their handsets.

But we will not see a Sabjiwala bidding for the morning supplies of fresh vegetables on his phone or for that matter - I might still not be reading my daily newspaper and novels on my handset - not yet.

Well !! we could have done without that cut in the fiscal deficit this time.

Ambanis are just the typical Indian Brothers

Yeah !! I know everyone worth his/her salt will write about the Judgement on the Ambani bros case - an analysis of how much gas (literally) was wasted - apart from air time, talk time, reams of print, share holders' and tax payers' money. Lamenting will be done (has already been done) on the excruciatingly slow pace of justice delivery costing a few percentage points slip/miss in the GDP (really !!?). Then analysis for future will be rolled out. 

So are we missing the obvious. That the Ambani brothers fight was just another episode of the great gala show which is - the Indian Family managed business.

If you have anything to do with India - you would know what I am talking about. A brilliant entrepreneurial mind (and no one would contest that Dhiru Bhai was) would create a business from nowhere. The mind would have married in the meantime in true Indian tradition. The business would grow big and successful. The family would also grow in the meantime. The mind finally retires (or dies) - the sons (now also daughters) would inherit the successful business. They will then fight with each other and the booty will eventually be distributed amongst them - sometimes after a bitter fight which might drag in courts for years. What happens next is legendary in Indian tradition : 

A bitter competition among siblings erupt because most probably they are in the same business (their father's) and probably in the same region too. Also their relatives, friends, business associates everyone is similar, and hence come what may, they will be compared for every step they take, for every failure they face or every success they achieve. An ego tussle follows. Sometimes, scheming against each other happens. One of them could turn out to be a winner. Most often however - the two (or more) survive but each of them smaller, weaker and more tired. The business in the meantime suffers. (sounds familiar - ahhm. In fact, you have seen this being played out in the media in the present case).

The division of business leaves the business weaker. Resources shrink, debts grow, synergies dilute. The team (father's) is dismayed, confused due to divided loyalties. Some leave - others go into a shell. New core team arrives - often with those who wish to cash in on opportunity making it all worse.

These brothers reach retirement and the next generation is ready - history repeats - businesses gets further divided - fights intensify. Gradually, it reaches a stage where the all important question - so gruellingly discussed in B-Schools - is forgotten. What business are we in? I have cut the juicy - soap stuff where the wives, the vamps and the uncles/aunts/jijas and Bahus play their role in the mess.

All across India in every village, from farmers to merchants, from mill owners to Business groups - this drama has been played out year after year, generation after generation. Ambanis just happen to be the most rich family out there.

Now !! if Ambanis is the typical Indian Gujarati family - and I think they are, every bit of them - this drama is far from over. Among friends and public - Mukesh and Nita have played the archtypical avancular big brother claiming that - "The bitterness should now be put to rest". What the other camp will most probably read this as (no matter what the true intentions of Mukesh are) - "See they are saying - accept that you have beend defeated".

Anil might not have the system to digest what can only be called a clear slap in the face. He went to great extent coming up with front page ads claiming loss of shareholder value & national treason in the brother's companies. Now his compnies lost 10000 crores in market cap in just one day. It is tough to believe that he will keep quiet. He is only waiting for the negotiations on the Gas deal to pan out.

Mukesh has managed his image quite well till now. So he will keep playing the smart backdoor manouverer. Anil should now learn that too much exposure is a risky game and so most of this story will now be played out more quietly.

Sadly, the shareholders remain at the mercy of these brothers, their moods and tantrums. Despite being the largest shareholder business - the Reliance group is managed in the purely Indian family managed business style. Not many think of questioning the competence of the two brothers to manage these businesses. Not one would bother to question the competence of the next generation.

So do you think I am wrong if - I plan my retirement as shareholder of Tatas, Infosys, ITC or/and Wipros rather then of Reliance?

A family member departs

I carry vivid memories of the proud day when my dad proudly drove home our family's first car - The Maruti 800 - after a wait of more than 3 years, one makeover of the model already done and at a price tag more than double of what we believed it will be available at. Today when I read the news of its "good bye" from showrooms and a five year plan to phase it out - I am full of - well - Nostalgia.

It was a dream come true. A middle Class Indian home of a hard working honest bank officer could only dream of a car in those days and we used to look at the premier padmini of our businessman uncle (or the ambassadors of our friends Govt. servent parents) with envy.

Maruti 800 was a pathbreaker in many ways the least important of which was that it expanded choice or quality in the car market. The most important was that it gave a lot of Indians confidence, hope and happiness. Ours was one such proud family. I still remember, just days after we brought this beauty home, we were offered Rs. 15000 more and my dad finalised the deal (that was a big sum - think almost 20% return in a week's time). Something rang inside me and I obstinately refused that the family should sell the car. After some persuing my parents gave in to my teenage demand - half because they loved me and half because they loved her (only that the money offered was tempting). That day she became a family member.

We spent time together - lots of it. And she was faithful. In her twenty plus years of bonding she must have given us only a couple of failed journeys - that too because we did not know how to maintain her well. We never provided her with an AC and her first music system was given to her about a decade later. But unlike other family members we never fought or envied each other and she never complained. We just lived together. My father took care of her as his third child and we never complained.

Later we purchased more cars (our second was a Maruti Zen). However, nothing would replace our love for the "original red 800" as it was known in those days. During the last five years of her stay with her, many offers to buy her would come to us and my father after negotiating the deal would always find the price about Rs. 10,000 less than his expectations. Long after we finally let her go (I tried but could not write "sold her"), everytime we shall see a Red Maruti 800 and my mother & sister would cry like babies - see .....

I was told in my childhood that Maruti was Sanjay Gandhi's pet project. If thats true, As a citizen of India, I forgive this younger son of Mrs. Indira Gandhi, the emergency or his political "dadagiri" for he made millions of Indians feel empowered and happy by dreaming this project.

This car also was a mirror to Indian Babus who would not let fresh air in by blocking every thing or every idea which could offer Indians more and better choice. If ambassador was the logo for Indian Babus - Maruti 800 achieved that position for the common man of India.

I know that later generations or my child would not understand the emotion in this post and that history books might not give this car the space it deserves in our annals - so here is my bit to a pride of our times and our generation (I sound old today - may be thats what happens when a family member departs). Thanks !! 800 for what you did to our family, millions of families like that of our and for what you did to India - the country.

Swami Nithyanand, Sex Scandal and sense (or lack of it).

Before you continue reading this post, let me warn you. This one is disturbing, if you are used to reading what I have been writing usually. Its not my domain or style. It might hurt sensibilities, if you are religious in a very Indian manner.

South Indian media is agog with a sting video of one Swami Nithyanand showing him in compromising position(s) with a southern actress (well lets leave her name from the post - because media at least is following this deserved caution). If you so wish here is the You tube link to watch.

It was amusing to say the least. No, not the parts in which the swami and the lady were enjoying each other's company but it was amusing to see the Swami living a middle class Indian lifestyle without its pressures or challenges that come with that life. It was rather ironical to note that he maintained that lifestyle on the hard earned (and I am not sure of that as well) money of his other middle class followers. These people work, out there in the sun and yet they do not enjoy the luxury of a sexy lady waiting for them at home to offer a soothing massage when they are back, tired from a day's toil.

A question erupted to me - what was this actress doing in her room offering "seva" (services) like a disciple (if you exclude offering kisses and hugs). Well she is an actress. Just type her name on you tube search field and the words "hot", "hottest", "sexy" are offered by the application itself. So you know without watching anyone of them - where she is positioned in the minds of her audience. Just watch the first few seconds of this video and you realise that apparantly she does not need to become the maid of a sadhu for worldly pleasures. Millions of people become devotees of Saints assuming that their proclaimed path of salvation or knowledge will bring them Nirvana or at least peace. But she seemed to know that our swami was just another weak kneed mortal (probably with lower character) in blood and flesh. What the heck then was her compulsion to be a maid to such a regressive character? It simply does not make sense.

We are told that the southern part of India is the more educated one. However, year after year we encounter such tales of articulate charmers, turning into popular and celebrated Sadhus, living luxurious lives leving a Moral tax that people are happy to pay in the name of God, after evading taxes that their Governments want them to pay. This despite the fact that the contribution of such sadhus to the GDP (or for that matter any index of human development) is probably negative. It is ironical and sad that the most educated parts of our country is a fertile ground for such chickenery.

Will we ever come out of this vicious cycle of being greedy and corrupt people, pressured by the material pursuits into careers and activities that compromises our values and hence create mental stress against which we try to find solace in serving such self proclaimed, self styled Sadhus and their cults only to be proven fools later. Its grotusque, frustrating and futile.

Or, am I asking for too much?