The reactive Indian

We have always identified our country as mother India. We have historically been a country bestowed with feminine attributes of peace, non-violence and tolerance. Even in modern Independent India we have not been able to escape that blessing or anathema, whatever one may call it. But that has instilled in Indian psyche an attribute of being reactive to the circumstances. The identity of being peace loving and tolerant has made the ordinary Indian too tolerant and accommodative.(yaha sab chalta hai). An Indian today is happy and satisfied, with corruption, with hunger and with delayed justice. He only wakes up when the last straw has been cast and the situation has become terribly unbearable to the limits of life and death.
The economic reforms of 1991, LPG as we might call them, changed the economic landscape of our nation and paved the way for us to become the second fastest growing economy of the world. But was it like that we suddenly came to terms with the economics of liberalization in 1991? No. It wasn’t the case. In fact the fastest growing economy in the world today i.e. China reformed its economy 24 years before 1991 in 1967, when it opened up its economy and dropped tariff boundaries. So, why did it take a huge BOP crisis to do those reforms in India? Why did it take something of such a large scale that we had to pledge 67 tons of our gold to the Union Bank of Switzerland and Bank of England to get a bailout deal from the IMF? The answer is simple. India is a democracy and in a democracy the majority opinion has to be reflected in the acts of the leaders, however competent, qualified and good intentioned they are. And the general psyche of an Indian does not permit him to act until and unless his daily bread and butter is not at stake.
We also have more recent examples to corroborate this observation. If India were given one single wish which could be fulfilled by a genie, there can be no doubt what India would opt for. Yes. We all want the corruption to go. We’ve always wanted the corruption to go. We’ve always wanted that genie. And well some might argue (including me) that we have got that genie now in the form of Anna Hazare who is going to lead us to become a corruption free country. But what did it take ? It took a 1.76 lakh crore 2 G spectrum scandal, 70,000 crore commonwealth scam, an adarsh housing society scam and a potential antrix deal scam for the good intentioned men of our country to say that they’ve had enough, and the people who have done these scams are going down. But then, is corruption new to India? Were these 2 G spectrum and CWG scams the first cases of corruption in the history of India. The answer is indeed no. But it took obscene proportions of scams to finally wake our good men up from their slumber.
We have always been aware of the presence of tainted people in Indian politics. This is not limited to any single political party. There can hardly be any party which can claim that no cases have been framed against any of its MPs or MLAs. In 2010, 11 MPs were caught in a sting operation on camera accepting bribes for asking questions in the parliament, of which 6 were from the BJP, 3 were from the BSP and one each from congress and RJD. We’ve had people like Pappu Yadav, who were accused of murder, contesting and winning elections until they were finally convicted and debarred. So what about the electoral reforms? That is still not on our list of upcoming legislations for the winter session. How long are we going to wait for that? Are we waiting for the day when there would be nobody to sit in the parliament and all our leaders will be behind bars, accused and waiting conviction?
An average Indian who is mainly concerned for his “roti, kapda and makan” can hardly be sympathetic to the airlines which are portending bankruptcy. But still that does not reduce the magnitude of the problem. All our public and private airlines have piled up huge debts, which has been a result of regressive aviation policies of the government. The aviation fuel prices, the airport parking charges and also the taxes on the aviation fuel are among the highest in the world, and which is crippling our airlines. But we might have to wait for a major collapse of a major airline, either public or private, to finally make our politicians to act.
So is it all doom for us? Is there no hope? Well fortunately there is. In this age of interconnected and globalized world where information flows freely, our young generation have showed first signs of activism. It was this activism which made the Anna Hazare movement such a huge success. It is this activism which now makes the government uneasy over every single piece of paper leaked form government offices because it knows that the young India is not going to take this anymore. Finally the first signs of a shift are visible from a passive and reactive India to an active and proactive India. And this opportunity should not be lost. This opportunity cannot be lost. We, the young generation, have to persist and not accept. We will not accommodate anything anymore. (yahaan kuch nahi chalta)

COAL INDIA AND BEYOND....

The government had set a fiscal deficit target of 5.5% for this year. But after the recent events in the market viz., 3G spectrum auctions and the IPOs of C.I.L. (coal India limited) and other Public sector undertakings to follow, the government may well achieve a lot better than that. The coal India IPO received such an overwhelming response from the investors that it baffled even the most optimistic. Such a response from the investors has set the stage for a very eventful 2011 in terms of IPOs and FPOs.
Initially the move of the government of pricing the share at 225-245 per share received a mixed response. While some were very happy from the price others were finding it to be too high. But then the price turned out to be just right attracting huge amount of bids. While Coal India intended to make 15,450 crore from the IPO, it received applications for 2,40,000 crores, 15 times of what it asked for. The government is hopeful of achieving its target of 40,000 crores this fiscal, of which it has already reached the half-way mark. Now, the government is contemplating disinvestment plans for 3 blue-chip companies viz. SAIL, IOC and ONGC. It may happen in the last quarter of this fiscal year.
While the correct and attractive pricing did the trick for government in this IPO, the pressure will be on the government to price the coming IPOs attractively and still correctly. This kind of fair pricing by the government will help in luring the investors who have been shying away from the market for so long as majority of IPOs in the recent times listed below the issue price and some now also quoted below the issue price. As per the Crisil Equity Research estimate there are at least 179 companies listed in the stock exchange where the float is less thn 25 % mark. At current prices, these firms may have to raise Rs 1.6 lakh crore if promoters sell their holdings and if they do so through sale of new shares, they may raise Rs 2.1 lakh crore, says Crisil’s estimate.
For a company divesting more than 25% of its share, 3 kinds of investors may bid for it. These may be Qualified Institutional buyers(QIB) including mutual funds and FIIs, High Networth individuals and Retail investors. They have a quota of 50%, 15% and 35% respectively. This is especially good for retail investors. SEBI has hiked its cap on investment from Retail investors from 1 lakh to 2 lakhs. For investing, the investors should mainly look at the P/E ratio of the company. If it is too high, then it means that the shares are priced high with respect to the earnings of the company. So IPO space is set for lot of action in the coming days but at the same time retail investors will have to be lot more cautious before they choose to invest on an IPO or FPO.

CRICKET IS OVERHYPED IN INDIA

The ICC Cricket world cup is going to begin in a few days. 19th feb India faces Bangladesh on their home turf in Dhaka in the opening match of the tournament. The tournament would go on till April 2. After a hectic world cup for the players they do need some rest. But then here comes the IPL. After a hectic world cup, the players have to face the music again in the 2nd week of April, when the IPL is expected to begin.
This crony capitalism in cricket is rampant. There is so much money involved in the game that the important issue of the fitness of the players is sidelined. No wonder cricket is overhyped in India. It is practiced like a religion and the players are adulated like Gods. And then when they lose matches they are brought down into the abyss in no time. The photographs of the players are laden with slippers and are burnt. This unreasonably silly behavior of the Indian mob towards the game gives some people the opportunity to exploit it and make big money. The IPL is an unnecessary appendage to the already hectic ICC calendar. That makes up for filling the pockets of players and their bosses in the BCCI.
The condition of the players playing games other than cricket is not so rosy. There are talented players starving for funds in almost every game. The commonwealth game in Delhi which was full of scams and under preparation was a good indication of what infrastructure do other games get in India. If it were for the IPL and not CWG, the organization would have been without any blemishes. This reflects the attitude which the country has towards other games. Australia, U.S.A. and China are sporting nations. People play sport there. People win Olympic medals for their country. We in India are a cricketing nation. We play cricket. We play IPL. We make money. We are so obsessed with one game that winning loads of medals in Olympics seems to be a distant dream for us.
What needs to be done? It is not wrong to be passionate about a game like cricket. But it is definitely not such a great thing to ignore other games which most of the countries of the world play. We watch football but we rank abysmally low to even dream of making it to the final 32 who play the world cup. We get peanuts in the Olympics. The thing which we lack in our country is interest. We are passionate about cricket but not even interested in playing other games. And that is because we do not win in other games, we do not watch those. This is a cycle. When we start winning, the country starts watching. So what we need is a start. First of all infrastructure, funds, facilities for the games and the encouragement is needed so that the players start playing the game with motivation and passion. The finally not-so-bad CWG in India were a good start. That initiative should not be lost now. The CWG village can be used by Indian players. The opportunity is there for the taking for the players now. Losing it will not be a wise thing to do.

Taxation system in India...

Recently i read some article in the paper about how Indian enterprises are not incentivised to park their overseas funds in India. The inequitable tax structure in India stymies them from doing so . A company has to pay an extra tax for the funds acquired overseas which already have been taxed overseas. Our tax structure is a laggard in many respects. The 30 % corporate tax, although lesser than the 45 % corporate tax which existed in the socialist India, is still inequitable. There are huge loopholes in the transparency of the service tax and sales tax systems. An Indian shopkeeper would evade his sales tax, not only because that would save his money, but that would save him the cumbersome job associated with paying taxes in India. So, not only the taxation system has to be more equitable, but also transparent and easy for the taxpayer to get done with, without much labour.

How can it be more equitable? Well... The industrialists should not be seen as the scapegoats for the faulty government policies. They are the ones who have given us this miraculous growth, of which we are extremely proud of. In the socialist era, we could not have even fantasized the growth rate, which has manifested at the day. So, they should not be taxed so much. The articles which are double taxed at various state boundaries, should be taxed once. And that brings us to a relevant reform which is going to be incorporated. The Goods and Services tax. This reform in essence embarks on equitable taxation in our country. The goods which have been till day taxed multiple times across state boundaries, would be taxed now once, and the money would preferably be with the centre, which will distribute it to the states.

About making it more transparent, that would involve a lot of IT infrastructure to be set up, where every transaction, every detail related to taxation, every persons PAN no. and all such details should be provided on an online database, which should be made public. For this sufficient money should be ear marked to setting up the required IT infrastructure at the required places.

And about making it less cumbersome, the paperwork associated with the taxation process should be minimized, and more and more things should be done online, which will make it more transparent as well as easy to handle.

Even to maintain our industrial growth, serious reforms, like the G.S.T are needed and they should be done at any cost.

An account of political philosophies

World wars 1^st and 2^nd may be considered the most bestial wars ever. War crimes were committed openly, let alone amnesty for prisoners. U.S. let off steam on Hiroshima and Nagasaki with atom bombs as Japan flickered in fire. But unlike cold war, none of them augured the end of world. The dichotomously divided world was heading its way into the most heinous battle ever. As the battle between democracy and communism galore, the world was on its way to annihilate itself. The world was divided in its political and economic dogma, the nuclear war seemed ineluctable and the doomsday imminent. The nations which were supposed to be the most sophisticated ones, were surprising the mankind with their barbarianism. This is the sort of impact which terribly divided political philosophies had. The two major military blocks wanted to create a hotbed for the proliferation of their dogma and to devour the other eventually. The battle between communism and democracy, between socialism and capitalism, between altruism and reason led the countries of the world to pile on nuclear weapons and prepare for the 3^rd world war.

U.S.S.R and U.S.A were the bastions for their own respective philosophies. The gigantic U.S.S.R wanted the communism to proliferate and the smart U.S.A wanted to encompass the world with a surge of comprehensive democracy. This led to a huge covenant of western nations in the name of North Atlantic Treaty Organization. As one besmirched the other, the world was heavily divided. The Americans gallant of their freedom of speech and the Russians of their proletariats, insouciantly kept mum of the carnage which could follow their parochial acts.

The 19^th century Russia wanted to lay the foundation for centrally planned economies in the world. Highly impressed by Karl Marx, Lenin led his country into the Russian revolution and the czars had to bite the dust. He unarguably had his last laugh and then did not look back. Russia invaded and collaborated with different countries to lead itself into a gargantuan union, the Union of Soviet Socialist Republics. That was the surge of socialism. The land owners were stripped off their lands, and the proletariats suddenly became the most privileged of the Russian classes. The people who were running for power and pelf had to step on the altar, as the proletariats became richer. The press was robbed of their freedom. It was forced to print corrigendum on its criticism of government. In essence, the centrally planned economy turned out to be huge failure. As the country’s businesses were taxed into destitute, endemic and chronic hunger was rampant. The exchequer would earmark huge money to defense sector, does not matter if chronic hunger burgeons in the country. Ordnance was the country’s prime concern at all times. Cases would be decided in absentia, as law went into an abyss during Stalin’s regime. Lifestyle would remain essentially drab.

After the 3^rd world war, the only standing economy was United States. It embraced capitalism and democracy, and achieved a chimerical growth rate. Its businesses were having gusto; it started to earmark huge money to the agricultural sector. They had the job cut out to ameliorate the situation of the country comprehensively. The policy of affirmative action was embraced to uplift the downtrodden blacks. As the country moved, people embraced a flamboyant lifestyle, which rendered its economy mostly consumer based, providing enough leverage to its businesses. But, it gave rise to huge greed in people, which manifested as the global economic crisis as the chronicle of events unfolded.

The dogmas of respective nations would determine the lives of its people, as the state would educate its people with its dogmas to prolong the rule, plutocracy for America and oligarchy for Russia. No one would commit the blasphemy of besmirching a proletariat in Russia and the businessmen controlled the issues in U.S. And as the chronicle of events unfolded, a new major country embraced socialism. China, under Mao, turned out to be another secluded nation. In the pursuit of rule, the ruler would condone the barbaric acts. In fact under Mao, china remained essentially a belligerent nation, which was perpetually apprehensive of an imminent invasion by United States or Soviet Union. China embraced communism in its pristine form initially. Unlike china, India had to look at a plethora of issues while taking a decision of its philosophy, when it was set free after the British havoc, which lasted for a several centuries. An uneasy limbo forced India into avoiding capitalism and still be democratic, thus a democratic socialist country, which became India’s political philosophy. Democratic socialism was essentially a conflation of communism and democracy. The system of democratic socialism then led to huge amounts of populism among the politicians and myriad cases of grafting on the administrative level. The country commuted, as the economy plummeted eventually because of a mainly lackadaisical workforce, which, concerned for odds and ends, never looked to reform the system.

By the latter half of 19^th century the job of reform started in socialist economies, and mixed economies were born. The countries with hapless performance in the economic scenario finally signed the affidavit of ameliorating it. Bestiality was replaced with empathy as countries moved forward. In 1967 Deng Xiaoping for China, in 1991 Manmohan Singh for India and for Russia Mikhail Gorbachev started the process of reform, paying homage to America’s capitalism. The education system in China, Russia and India which was producing hacks needed to be reformed and was reformed to certain extent. Leningrad ceased to exist on the map of the world and Russians adjusted to the capitalistic system like a duck to water, as Democracy encompassed the world map. Thus, the most tolerant of the political philosophies, the harbinger of liberalization of world politics, democracy, reigned.

An essay which i wrote....

INDIA’S OWN SUPERMARKET

“We have changed from a world controlled by superpowers to a world controlled by supermarkets” ,says Thomas L Friedman ,the New York Times columnist and the author of the bestseller business book “the world is flat”. But how many people have realized it in India? Certainly a street shop guy has. He has transcended from his stereotyped services to an expanded approach towards his business. The street shop guy not only fetches his conventional products, but one can also get a mobile recharge, chewing gums, chocolates, stationary, an STD PCO, a one rupee packet of mineral water and what not? What does it show? Certainly it shows that the mindset of people towards business is changing. Everyone is trying to expand one’s gamut from stereotyped goods to include all kinds of products which one can get hold of and manage to sell with sufficient profit. These are the small supermarkets which one can find on every corner of every street in every town or city or village. It can be said that these are the Indian versions of the western supermarkets.

Indeed, a supermarket is a grocery store, a self service store, offering a wide variety of food and household merchandise, organized into departments. Now let’s define an Indian street corner supermarket. “It is a store, a small one, not necessarily a grocery store. It may originally be any street shop, an STD-PCO store, a general store, an internet cafe or whatever one can think of. But in such a store one can find an ‘Indian’ selling everything, from water packets to cigarettes, from mobile recharge to contraceptions.” We have seen the supermarket culture develop in India and it indeed has been adapted and accepted by all. The picture of the Indian street shop guy selling a wide spectrum of things shows that everyone has embraced the supermarket idea. But are we curtailed to selling more small items in small shops? The answer is no. Walmart may be the biggest retail player of the world operating in numerous countries but Indians have a propensity to indigenous names. A big-bazaar, reliance fresh, a pantaloons retail store are more into an Indian scheme of things. We prefer a V-mart to a Walmart.

India is ranked 5^th on the global retail development sector. Currently, supermarkets are confined to urban and sub-urban areas. But as more people are pulled out from poverty and the rural market grows we are bound to see those on the rural lands. As World Bank augurs that India would be world’s 2^nd largest economy after China by 2050, we will see supermarkets reach every corner of India. And that would require a massive improvement in supply chain management. A well managed and operated supply chain can effect reduced prices. Wal-mart has set a great example in supply chain management for other retail operators. The prices of items in a Wal-mart store are much lesser than those in other stores, due to the magnificently managed supply chain. This has been the main reason for the colossal growth of Wal-mart as a global retail player. Thus, the necessity of a well managed supply chain cannot be overstated. If a large country like India is to become the 2^nd largest economy of the world, these will be a major part of its scheme of things.

The tax reforms which have been incorporated in Indian economy from time to time are also intended to effect the growth of businesses and economy. Reforms like VAT (value added tax) have always been intended to incentivize businesses and GST (goods and services tax) which is going to replace indirect taxes is intended to remove the existing inequities or loopholes in the VAT system. The regularly upgraded taxation system of India is expected to be the incentive for the growth of businesses, economy and hence the markets, supermarkets and supply chains in India. Thus, foreign investors are thronging in to invest in the Indian retail markets. With growing consumerism, the supermarket business in India is going to be a big source of FDI. While skeptics opine that it would jeopardize Indian small retailers. Rather with the expected increasing demand, it would turn out to be a great opportunity for them to encash on the supermarket boom. Indian’s are after all known to show aptness towards indigenous goods.

Retail sector has been till date the 2^nd largest employer after agriculture for the semi skilled population and is expected to be a big job creator in the impending future. As a large fraction of our population is unemployed, a supermarket boom can just be the dues ex machina. As these get to rural areas, more people can get employed there. But that can only happen if the earning capability of our rural population is increased and their dependence on agriculture is reduced. An important step has been taken by the government in the form of rural employment policies like NREGA. But the government can only form policies and try to implement them. The problem which stymies rural development is administrative corruption. The bureaucratic setup swallows the funds allocated in the mediatory levels and stymies rural growth. This has been the problem and one of the reasons for the under development since independence, and we haven’t been able to find any effective way to eradicate this. So, for the application of these policies to some effect there should be transparency in the system of application of these policies. An official website on which everyday’s records related to wages and works are uploaded has to be launched. And a daily upgradation of that website should be facilitated. Of course, in a country like ours, it may seem farfetched. But not so if private companies like TCS and WIPRO are given contracts for doing it. This would ensure a proper and regular updating and would also provide options for . Public-private partnership is always being seen cynically in India. If government talks about it, it is seen as a cry to rescue the pathetic PSUs from the losses with which they incur. And if private companies talk about it, cynics see it as intent to swallow the public sector. Any step which promotes public-private partnership is welcome.

Big markets are the epitomes of a developed nation. The western countries in which industrialization happened and markets proliferated are the ones whose citizens have a higher standard of life than the African and most Asian countries. Supermarkets are sin qua non components of a grown market. If we will have a developed market in future throughout the country, supermarkets and well operated supply chain are indispensable. And in turn they can generate employment opportunities and thus benefit the market itself.

A supermarket offers various products in a single place. They are going to be much more in the scheme of things in the future. But will they replace the conventional markets?? May be in the western countries they can but definitely not so in India. People in India are too reluctant to change old habits. It will be too hard for someone in India to miss a tea on the shop which is in the corner of one’s street. Old habits are hard to break for us Indians. And even if we go to a supermarket for shopping but it is too hard to miss a tea around the corner, or a smoke behind the street for the smokers. Thus even if the supermarkets come and generate huge profits but a street shop around the street has its relevance and rightful place in India. No supermarket can provide the satisfaction which the Indian middle class serviceman gets out of hanging out on the nearest pawn tea shop with mates. And the street shop guy has embraced and integrated the supermarket approach and has started to keep all kinds of items in his shop. A supermarket may come and even go. But an Indian street shop or the India’s own supermarket is here to stay.

It's good to be back....

2 months in exile and of extreme torture. I was desperate. YES. I was desperate for coming to the PC, typing www.blogger.com and post something. But i didn't. There are reasons. First on that list is the terrible AIMTEST in which i was sort of burnt, bruised and battered. Well...i had much stronger words in my mind to describe that but for the sake of my readers i have tried to refrain from profanity. And then there were the two minors. A rare visit to college. And my ineluctable fever. Perhaps God could not bear my ecstasy for not getting fever these winters. And i lay on bed for 6 long days. This does not end here. There was a terrible dilemma about a competition called baja. Baja is an inter college competition of automobile design in which i desperately wanted to participate with my college team, but, something restrained me. Something for which i was even more desperate . CAT. If i had joined the team i would have had to work for hours during november and december which i can not. I have already sold my ass to CAT for those months.

But heyy...enough of crying..

Consoling myself....moving ahead...

Am back to blogger...

It wasn't long before i started blogging, but, i really enjoyed posting and highly desire to pursue it. So from now on i would try to avoid terrible interregnums and be consistent and agile with my posting.