"Govern a great nation
as you would cook a small fish. Do not overdo it."
- Lao Tzu (Chinese5th or 6th
Century BC)
Word for the day
Boomlet (n)
A brief increase, as in
business activity or political popularity.
(Source: Dictionary.com)
Malice towards
none
The head of the family needs
to realize that children have now grown up. Discuss issues with them at dinner
table; offer your advice; let them chose what they like.
Forcing something down their
throat will only encourage rebellion.
Black & White
Traversing through narrow streets of old Delhi on first Monday of
the Hindu month of Shravan (or Savan as in film songs) was a little different
experience this year.
This month is traditionally known as month of Shiva, the Lord of
Asceticism. The devotees abstain from all material pursuits and pleasures,
observe fast & abstinence, and pray to the Lord for the welfare of entire
mankind. Millions of people arduously walk hundreds of miles to bring sacred
Ganga Jal to the constituent of Shiva resident in their locality.
Poets have celebrated this month as the month of parting of
lovers. Pain and intense longing for love are the primary feelings associated
with this period.
This Monday also thousands of devotees thronged the old Gauri
Shankar temple in historic Chandni Chowk. The crowd comprised mainly of people
from trading and financiers community living in nearby areas. Many migrant
laborers working in the vicinity also joined to enjoy delicious Prasad. IS
threat of terrorist attacks ahead of the Independence day did not deter people
at all.
But the usual enthusiasm and gaiety appeared lacking. Few
enquiries with acquaintances took me to the narrow bylanes of the area. Few
hours of enquiries highlighted the extreme distress, fear, and apprehensions
that informal markets in India are witnessing. This may not adequately explain
the declining consumption, tighter liquidity, real estate slump, unemployment,
rising mistrust and skepticism. But it is certainly indicative of the
botheration. Consider few examples:
(a) The business of
"Entry" (converting black money in to white) has taken a big hit
after the recent action on fraudulent Long Term Capital Gain transactions. Many
big operators of the business are supposedly hibernating in friendly
jurisdictions like Thailand and Dubai. The cash cycle is completely stalled
causing acute liquidity shortage.
(b) The arrangement of
"Committee" (the kitty of business people) has seen multiple defaults
causing losses to many organizers and participants. The business that has been
traditionally run on trust is witnessing such mistrust perhaps for the first
time. The easiest source of financing working capital and small capex is thus
shrinking. This is reflected in lower inventory level, reluctance to extend
credit to retailers, and lower capex in capacity building at shop level.
(c) In a fall out of Maggi
episode, the government authorities have reportedly taken stringent action
against importers of food items, especially confectionary. The practice of
under invoicing of imports to save on import duty has been rampant in this
trade. Most of these traders are in hiding. The prices of chocolates and dry
fruits are sky rocketing on shortages as the festival demand is picking up.
No matter what politicians say, "black money" is
gradually gaining acceptance as "avoidable dirty thing". This is a
sublime structural change taking shape in narrow bylanes of traditional markets
located in old cities of India. GST if introduced from FY17 could accelerate
the change materially. If not, the change is taking place anyways. Good times!
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