"Much that passes as
idealism is disguised hatred or disguised love of power."
—Bertrand Russel (British,
1872-1970)
Word
for the day
True-Blue (adj)
unwaveringly loyal or
faithful; staunch; unchangingly true.
Malice
towards none
For a second assume Pakistan executes the death sentence awarded to
Kulbhushan Jadhav.
What will be our reaction:
(a) Will we declare war on Pakistan and invade Lahore?
(b) Will we terminate all diplomatic and trade relations with Pakistan,
declaring it to be an enemy?
(c) Will we at least execute couple of Pakistani prisoners in our jails,
without fait trial?
If the answer to all the above if "No"; then what's the deal with
all this TV drama?
First random
thought this morning
As per media reports, the government has 'asked' central
public sector enterprises (CPSEs) to bear the cost of 543 "Sabka
Saath, Sabka Vikas Sammelan" being held to propagate the achievement so
the government in first three years of its five year term.
It
raises many questions in my mind. For example—
(a) If the government has
done good work for people, shouldn't the people (the beneficiaries) know it? Why
would they need to attend a government function to know, what the government
has done for them?
(b) What about the rights
of minority shareholders of listed CPSEs. Why should they bear the costs of
government publicity?
Democracy, Demography and Demand
Many people often speaks about
3Ds, viz., Democracy, Demography and Demand, as key strengths of Indian
economy. Even our prime minister has highlighted these as key factors in
economic development and growth of the country.
From the view point of Indian equity markets also these 3Ds form
the basis of a many investment strategies. Global investors also find young
demography, large upwardly mobile middle class, political stability with near
unanimity on core economic and fiscal policies, attractive for investing risk
capital.
In my view, these 3Ds remain the key challenge for faster, higher
and sustainable economic growth of India. To capitalize on 3Ds we need to
maintain a balance between these; which is a delicate task.
Firstly, the pseudo socialist and quasi feudal nature of our
democracy often leads to wasteful expenditure, policies and plans focused on
winning a elections rather than achieving sustainable economic growth and
development, serious misallocation of capital and sub-optimal of resources.
We have seen politicians creating undue demand for color
televisions, smart phones, laptop computers etc. by manipulating the process of
democracy.
In rural and semi-urban areas, motor cycle has replaced bicycle as
a mandatory dowry item. These days, it is almost impossible to marry your
daughter if you cannot afford a motorcycle in dowry. Smart phones also find
place in most ‘demand lists’. Many old aged villagers argue that it is a
collateral damage of better road and telecommunication connectivity.
It is clear that our society is defying the classic McGregor's
evolutionary pyramid and moving directly from sustenance to aspirational
consumption. The demand thus created is neither desirable nor sustainable, in
my view.
Secondly, the youngest demography in the world is like a vast
reservoir of unexploited energy. If not channelized properly, it can destroy
the very core of our social fabric. The rising number of poorly educated,
inadequately skilled underemployed, unemployed and employed in disguise youth
is no strength for the economy. It is indeed a serious weakness.
On one hand, India is failing in her duties towards the
international community (see here); on
the other hand we seems to be fast running out of ideas for managing this vast
and invaluable resource for our economic good.
Rise in petty crimes, instances of civil unrest, deterioration in
general compliance standards are just few prominent consequences.
Misled by aspirational consumption and tall political promises,
our businesses and middle class consumers have advanced their investment
demand. Consequently, we are witnessing severe stress in many sectors of the
economy. While more than 40% of households still live without proper electricity,
our power plants are running at 50% PLF. Most toll roads are reporting losses.
Besides, telecom companies are reporting losses and FMCG companies are
witnessing sustained margin erosions.
Tomorrow I will discuss about the fourth D, viz., Disintermediation,
that is challenging our economy, investors and businesses.
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