Yakub Menon received fair trial - justice is subjective

Finally Yakub has been hanged. There was a lot of debate on whether he should be hanged or not.

Extreme opinions were exchanged. One group thought it was anti-national to think of any sympathy for him - another group identified what they called "mitigating circumstances" to show clememncy in awarding him punishment.

Some points
1. He is guilty because a fair court has held him guilty (and we must understand that the court is the competent authority to have looked into evidence and take a balanced judgement on the issue)

2. He had been given a fair trial - he has presented his case through three layers of our justice system. He had supporters (those who could empathise with his perspective) outside and inside the courts.

3. We can have a healthy difference of opinions with the court (and also with the law) but no one can question the fairness of the process in this case.

4. Many people compare outcome of this case with cases of Gujarat riots or other accused of 26/11 blast cases or that of the Rajeev Gandhi assination cases and hence feel that memon was targetted at. This may be factully true and is still a "कुतर्क". Legal system is not consistent and it cannot be consistent and it is not consistent anywhere in the world - thats because human beings run the legal system. However, each case is expected to go through the same process and each has its own merits to be judged on.
This is not to say that we must not improve the system but that we must accept the outcome of the system (which sometimes may be at variance from what we believe)

5. In the same breath we must not brand those who empathise with Yakub as anti national or apologists. We must understand that this is the beauty of this country. It allows for dissent and disagreements and so, huge debates. Those on the side of Yakub are not necessarily anti-nationalists and screaming "anti-national" at them is only killing this spirit of coexistence with differing opinions.

6. Also there is a political angle to it. Many believe that the alacrity with which he was hanged is unparalleled specially because there are many languishing in the jails still to be hanged. For many the mercy petition is stuck in the home ministry or with the president for years. Many people feel - this is because there is a political dispensation at the helms, who is out there to prove that they are decisive.

Even if this is true - I think this is not relevant. We can counter argue that the opposition was also taking political mileage by wanting to delay the hanging and that earlier governments have been delaying the execution of many others to appease their vote banks.

The fact is that there was a Government at one time who would have taken excessively guarded steps before executing a guilty and then there are Governments (may be the current one is one such) who would be less guarded. Time will test both the approaches.

In nutshell - yakub's case was fairly tried and a considered judgement made. One hopes that was the case in every such case.

CAT 2015 - New conction in old bottles

For me it is almost a ritual - writing an analytical note on the expected changes in CAT, almost every two years. Just as I sit to write this one I am remembered of my earlier post on the same.

CAT-2015 notification is out and with it is the proverbial cat out of the bag. Like always CAT brought some surprises to the aspirant students and so I am back with some loud thinking on the changes and to explain how it impacts you

Lets analyse each change one by one

1.    CAT 2015 will be conducted in two sessions in one day. The exam will be held on 29.11.2015 (Sunday).

This is in tune with the larger strategy of keeping the CAT fair. Some of you will remember that year before last CAT-2013 was conducted over a 24 day window in two slots each day. That was the most controversial CAT ever with mountains of litigation happening throughout the country questioning the fairness of the score normalization and then subsequent ranks allotted to the students. The situation improved when CAT2014 was conducted over just two days. A single day CAT would mean a more reliable ranking as it would require little or no normalization for difference in test and its toughness levels. So, we can trust this CAT results to be as fair as ever.

There is however a silverlining in the date – it provides the students with almost an extra month to prepared for as the date of CAT is now almost a month later than the anticipated date going by last 4-5 years of experience.

So, those who might have been cutting corners till now – here is your little window of opportunity to reenergize and prepare well

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2.    Duration of the examination has been increased to 180 minutes instead of 170 minutes.

No impact of this on our performance – because it affects everyone equally and hence there is no relative gain except a psychological comfort of having more time to negotiate the test.

3.    There will be three sections, ‘Quantitative Aptitude (QA)’, ‘Data Interpretation & Logical Reasoning (DILR)’ and ‘Verbal and Reading Comprehension (VRC)’. QA and VRC will have 34 questions each, and DILR will have 32 questions.

A quick back of the hand calculation will tell you that this is a cosmetic change. Till a few years ago, CAT was actually a three section neatly divided into QA, DI/LR and VA. Couple of years ago it was made a two section test by dividing the DI/LR section into two – and by attaching the DI section with the QA one and that of LR was attached with the VA section. This year it has been decided to be brought back to the original format which was followed for many years. The distribution of number of questions is actually exactly the same as was last year and they have just been regrouped. So no big surprise here.

However, this change has an important message for aspirants. The importance of the Language section has increased tremendously as was the case earlier too when it was a three/four section format. Over the last couple of years many students had resorted to the practice of doing the LR questions in the second section by devoting it a lot of time and largely bypassing the verbal portions of the second section. I have been in touch with many students who maintained that they simply do not try any of the RC passage and instead they focus on doing all the LR questions right.

So, once again Language section will become a dominant factor in ensuring a winning percentile. Time to take up your central ideas and vocabulary exercises with stronger focus.

4.    Candidates will be allotted exactly 60 minutes for answering questions in each section and they cannot switch from one section to another while answering questions in a section

I know you can visualize me smiling when reading this change. We at CH EdgeMakers have been pleading with you to create a more or less even strategy of attacking the CAT because time and again our statistical analysis told us that this is the best approach to scoring one’s highest. A timed section would just mean that the CAT itself is ensuring that you follow that strategy.

This change also underscores the fact that the CAT has increased the importance of the language section again. The students will not be allowed to shift some of their time from the verbal ability section to the QA or the LR section. Shifting some to substantial fraction of time from the verbal ability section was the predominant behavior of the students in the earlier two section format of the CAT. Further, we are forced to devote 60 minutes to 34 questions of VRC – this means that the VRC section could also increase in its toughness – which had mellowed down a bit over the last two years.

I guess for the students with a strategy the timed section does not make much difference because hopefully they were following it anyways. However, it does enforce a certain discipline in the execution of the test. Finally, do remember that you must take the language section in more depth because in any case you have devote 60 minutes to the Verbal and Reading Comprehension Section – So, it’s important that you do well there.

5.    Some questions in each section may not be of multiple choice type. Instead, direct answers are to be typed on the screen. The tutorials will clearly explain this change.

By far, this is the most interesting and fundamental change this year in the format of CAT. Initially, this was being interpreted as addition of descriptive questions to the test. Some websites went on to suggest that the students will have to type solutions on the screen.

However, this is not correct. Note the above line – taken directly from the IIM Ahmedabad press release “Instead, direct answers are to be typed on the screen”What this means is that in those questions where you do not get multiple answer choices – you will have to key in the final answer (not write the entire solution). Prof. Tathagata Bandyopadhyay Convener of CAT 2015, IIM Ahmedabad clarified in an interview later “We have decided to introduce a few questions which will require candidates to solve the problems and key-in the correct answer/s instead of just selecting the right options among the given choices. This we are planning to introduce for reducing the impact of guess work on the performance.”

If there was any proof needed that CAT cannot be cracked on the basis of so-called “tricks/short cuts/formulae” – here is one more added to it. Obviously this change has been brought about to ensure that those with conceptual clarity and depth in comprehension will do better. Guessing the answer on the basis of options are a thing of past. If one were to make a guess on what kind of questions will not carry multiple choice of answers – it would be safe to say that they would be questions which earlier could have been done/guessed by simply trying out values from the options. This means one will have to be clear of one’s approach (process) of solving a question rather than hunting for the right answer in any which way.

If you have been following my advice on CAT ever – you must have noticed the stress I give to solving each question till the very end to ensure that we get the concept right. If you have been following the above tenet – you do not have to worry much. This change actually favours you against the students of those “proverbial coaching classes/expert websites”  who are hell bent at teaching students ways and means to bypass the question through some fancy guessing or through reverse working from possible answers. 

6.    Also, we will allow use of basic on-screen calculator for computation.

While I do not like this change but it’s here for you. This change recognizes the fact that some students are generally more comfortable with numbers and they have a natural advantage over those not so familiar with numbers. The use of basic calculator takes away one’s focus from calculating to understanding, structuring and hence approaching the question right. In a way this is good because it tests more important skills needed to be a manager/leader and at the same time it is not that good a step because someone with good familiarity with numbers and an ability to work through them with back of the paper gut too is an important skill for a manager.

Anyways – it is now allowed. So how does it impact us. If one thinks logically – even the use of the basic on the screen calculator is cumbersome and time consuming exercise. So if one is good at mental calculations and quick approximations that can surely be an advantage over the competition. Remember that CAT is a relative test and not using the calculator can be a competitive edge. So my advice would be to work on one’s calculating abilities and to use the calculator only in case of long, cumbersome calculations or those calculations that need accuracy to the decimal point (which I doubt CAT ever demands).

So, my suggestion here is to ignore the fact that you will be allowed to use the calculator and keep preparing. In the actual test however, use it for cumbersome calculations and for those that requires pin point accuracy in answering the questions.

So that’s it – the changes brought about the CAT 2015, I dare say, in nut shell. J I hope this note helps you focus your energies in the next four months better. If you have any questions or doubts (even arguments against what I have written here) feel free to mail them to me to akash.sethia@chgroup.in

Most such notes that I have written over the last couple of decades, mention that “this CAT is old wine in new bottles”. But, I must say for CAT 2015 that this one may not be completely new wine, and yet it’s a new concoction in an old bottle (structure).

Reforms in Reverse Gear

Almost two decades ago, when I was studying at IIM Lucknow - I became aware of one big mistake in Economic policy of India during the Indiraji/Rajeev Gandhi era. Maintaining Governments control over the Monetary system of India. My generation is a witness to the Economic reforms under the stewardship of Dr. Manmohan singh over these two decades.

A key tenet of these reforms, an independent RBI seems to be going into the reverse gear now. Recently the Govt. announced a draft policy called the Indian Financial Policy that seems to severely restrict the autonomy of the RBI. Here is why this should not happen

 If anything we must learn from history and not repeat past errors. Indira Gandhi was an admirable leader and yet she was so wrong in creating a tight fisted control of the Government on the Indian Monetary system. She was the person behind nationalisation of the banks. What followed was decades of fiscal and monetary profligacy. Two terms that we learnt and used a lot back then were "Monetisation of Fiscal Deficit" and "Double digit inflation".

Even to an amateur in economics like me, it was easy to establish the connect. The Government of the day ran high fiscal deficit - ostensibly in the name of development - and as the system goes the fiscal deficit actually built due to non-development expenses like irrelevant subsidies, political dole outs and loss making PSUs. One of the major routes to finance this high fiscal deficit was to print more notes (monetisation) and hence increased liquidity in the system which led to runaway inflation resulting in falling value of Rupee, which in those days the RBI (read the Govt.) will maintain at artificially high levels through draconian laws like FERA and by not allowing Rupee convertibility.

Obviously it resulted in exports losing competitive edge while imports becoming very attractive. They then needed to be managed by high tarrifs, import duties and quantitative restrictions. This was a major reason (mind you not the only reason) for the economic mess we were in 1991 (for those who do not know - we were at the edge of defaulting on our payments because of a hugely deteriorated Balance of Payment (BOP) situation).

We gradually clawed back to normalcy and then quite remarkably into a high growth scenario of close to 9% GDP growth rate and modest inflation rates of 3-4% for close to a decade. This was possible because of far reaching reforms taken by subequesnt Governments both UPA and NDA. The key architect of this recovery was Dr. Manmohan Singh, first as the FM and then as the PM.

A lot of this economic mess in those days was ascribed to we having an RBI which was considered a slave of the Government. The RBI Governor in those days was expected to toe the line of the Government. Dr. Manmhan sigh who had served earlier as the RBI Governor too understood the importance of an autonomus central bank in managing the moetary policy effectively. This was ofcourse vindicated by the largely autonomous central banks of almost all developed nations at the time (which remains largely true till date).

As a result some of the key reforms focussed on a more autonomous and stronger RBI. Fiscal Responsibility Bill was passed that committed to a maximum limit of monetisation of fiscal deficit. Monetary policy was largely left to the RBI governor and it was decided that beyond the limit of monetisation Govt. will finance its fiscal deficit through Market operations. All these helped ensure debate on key areas of reforms and policy. Healthy disagreements between the FM and the RBI Governors have often resulted in rethinking and reevaluating of options. Many believe with some strong basis that India managed to cruise through the 2009-10 Global Financial meltdown triggered by the sub-prime crisis in the US, quite admirably largely due to prudent policies on the part of the RBI (and also due to fairly expert management by the FM/PM/planning Commision head of the fiscal economy).

So what is alarming about the draft Indian Financial Policy issued by the Finance Ministry? It seems to be undoing this body of work done over close to three decades. The draft suggests formation of a "Monetary Policy Committee" that would decide key rates of the Monetary Policies. What is interesting, is that out of seven members in the committee four are proposed to be those appointed by the Central Government and only two to be appointed by the RBI. This effectively means that the RBI Governor has effectively lost control on decisions related to key monetary policy parameter. An earlier draft allowed for a veto with the RBI Governor in case he/she disagreed with the commitee's decision - this draft does not allow even that safeguard against an overzealous FM.

Further, The revised IFC is also silent on the setting up of a Debt Agency Advisory Council that was proposed in the earlier draft to advise the Public Debt Management Agency. The revised draft has also toned down the FSAT and removed the provision empowering it to review regulations. This in short means we are not to expect any reforms towards strengthening the monetary/banking system of the country anytime soon.

Now I am not saying that we are anywhere near the economic mess of 1991 and yet it would not take more than a decade at today's pace to be there - if we do  not learn from our past mistakes. Whatever be your criticism of the Manmohan Singh government - one credit he must get. His government created strong institutions that were allowed to work autonomously - and each one of them helped/is helping transform the sector. Eg. SEBI, TRAI, IRDA, UID etc. Limiting their autonomy would be counter productive in the medium term.

Most well meaning Indians should express view on such an important piece of legislation that threatens to take us back tens of years on a piece of reform that has actually worked. In fact we need a Government that that takes these reforms further by expediting the formation of Debt Management Agency which is a crying need of PSU banks that are already reeling under the increased levels of NPAs. The Government can do so much to ensure a strong India and facilitate Economic recoery - taking away institutional autonoy from key functions is the last thing they should target. Is someone listening.