"On the choice of friends, Our good or evil name depends."
—John Gay (American, 1685-1732)
Word for the day
Buttery (adj)
Malice towards none
Why both Ex Finance Ministers are trying so hard?
First random thought this morning
Another overloaded bus has fallen in deep gorge in Uttrakhand, claiming about 50 precious lives. Anyone who has travelled to hills of Uttrakhand and Himachal Pradesh by road is well aware that most of the public busses, autos, and taxis run overloaded there. Speeding and driving under influence of alcohol is also not uncommon.
The point is "why the enforcement agencies who allow this life threatening practices to continue for a small gratification and elected representatives (including ministers) who ignore such practices to please the strong transporter lobby should not face serious criminal charges for each such mishap.
Celebration for vanity sake
One of the "important" things that kept middle class of India busy in past few days is the engagement party of Akash Ambani, elder son of the richest Indian Mukesh Ambani. The rich and famous of India also appeared vertically divided last week. On the right being the people who got an invite to attend the gala event; and the left being the people who the Ambanis chose to ignore!
I fully appreciate that it's totally a personal matter of the family and no one has any business bothering about this.
Nonetheless, as an investor, who seriously believes that social narrative is as important for sustainable growth of the economy, as the economic and financial narrative, I must say that such events do bother me a lot.
In my numerous travels across the length and breadth of country, I have witnessed a number of family functions like wedding, birthday, anniversaries, etc. Most of the functions in middle, lower middle and even poor families are deeply inspired by Bollywood movies and publicized events of the rich and famous.
Under tremendous social and peer pressure, people are compelled to emulate the movie sequences and the indulgence of rich, regardless of their affordability quotient.
As I have highlighted many time before that a large portion of the rural debt is actually related to the spending on functions at birth, marriage, and funeral (see here and here).
It would be interesting to study, how much this non-essential and mostly frivolous spending contributing to the growth in personal credit, especially consumer funding NBFCs and micro finance institutions.
People are spending on motor bikes, smart phones, SUVs, tractors, wedding & birthday celebrations, compromising on food, health, education & training, and shelter needs.
This is raising three damaging trends in the socio-economic milieu of the country:
(a) Even the people who are better off in absolute monetary terms frustrated and cynical than ever.
(b) There is an increasing tendency to depend on the State for meeting basic needs.
(c) The consequent financial stress is gnawing into traditional Indian ethos, where defaulting on debt is considered one of the greatest sin. These days it is not uncommon to see people not only willfully defaulting on loans but also encouraging others to do so.
Insofar as Ambanis are concerned, I am no one to offer any advice. But I personally would have been delighted if they had set an example for common Indians, who eagerly look forward to them for inspiration. A simple marriage in a temple, with 25 guests, would have been remembered much longer (and proudly) than the one they may be planning. Otherwise, very few remember the Lakshmi Mittal's daughter's Rs2.5bn marriage or the obscene extravaganza of Subrat Roy's son wedding.
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