Friday, April 26, 2019

Think about your patient first



First thought this morning
Voting for the election of 17th Lok Sabha is complete in more than 300 (of 543) seats. Voters in more than 20 states have exercised their franchise. From the voting pattern so far and anecdotal evidence collected by me, the following four trends are noteworthy:
(a)   The overall voting percentage this time is similar to 2014, however there are significant differences at regional level.
In 2014 elections the voter participation was amongst the highest since independence. Analysts attributed the high voting percentage to the Modi wave and peoples' longing for change. This time apparently there is no wave, or material anti incumbency for that matter. The still high voter participation therefore is bewildering for both analysts and political parties. Everyone is therefore trying to see it from their own prism. The incumbent and their supporter are seeing this as a vote for stability, while the others are terming it as a vote for change. Higher number of first time voters who are not as droopy as their elders could be another reason for higher participation rate.
(b)   Usually wherever a stronger regional party is present, Congress is not doing well. Haryana though could be an exception. The general feeling is that the contest this time is primarily between BJP and Congress, and the regional party INLD (and its factions) is in total disarray. RLD in Bihar has held together well under the same circumstances (patriarch in jail).
(c)    The campaign so far appears as if we are voting in a referendum on the Prime Minister and not in a general election for Lok Sabha.
(d)   Given the penetration level of electronic, digital and social media, the ban on campaigning upto 48 hrs prior to voting, has become totally redundant.
Chart of the day
Think about your patient first
Once a patient was admitted to an upscale private hospital (XYZ) with a serious cardiovascular ailment. The cardiology team at the hospital was headed by an experienced old surgeon, who was lately rendered incapable of performing complicated surgeries due to his blurred vision and trembling hands.
The team he headed was however not harmonious. Many doctors were either incompetent or had allegiance to their vested pecuniary interests. They would often indulge in unethical practices and conduct unbecoming of a reputable medical practitioner.
The management of the hospital was fully aware of the state of affairs at the hospital, but did little to put the house in order. The popular belief is that the management itself encouraged the disharmony amongst the team members and incongruence of the objectives to stay in control of the institution and maximize the profitability.
The head of the team diagnosed the patient's condition accurately and proposed a line of treatment, which would treat the patient promptly with minimum pain and cost. The team members however disagreed. They wanted the patient to spend more time in hospital and undertake a variety of experimental tests and procedures. This would cost the patient much more and cause more pain. The management concurred with the unethical lot of doctors.
After spending some time in the hospital, paying huge costs, and suffering tremendous pain, when the relatives of the patient saw condition of the patient worsening, they moved him to another hospital (PQR).
The doctors at PQR studied the case history and discovered that the patient's condition was accurately diagnosed at XYZ and correct line of treatment was proposed by the head of the department. The doctors there decided that once the condition of the patient is stabilized they would follow the same line of treatment as suggested by the old surgeon at XYZ.
In few days, the condition of the patient stabilized and he was moved out of the intensive care to normal ward. The doctors at PQR hospital then started the treatment as suggested by the head of the department at XYZ.
However, considering the slow recovery and frequent relapse, the head of the department at the PQR decided to try some unconventional treatment. The patient did not respond to these unconventional methods and his condition worsened materially.
He was again moved to intensive care. The doctors then followed the line of treatment prescribed at XYZ. The patient stabilized and his vital signs showed some improvement. But the patient is far from being cured and remains hospitalized, suffering pain and expenses.
The relatives of the patient are now in a quandary.
Fully aware that doctors at XYZ correctly diagnosed the disease and advised the right line of treatment, they still do not want to reconsider XYZ for its lack of ethics and unfair practices.
They are not too pleased with PQR either, as the unconventional experiments done by doctors there cost them significant amount of money besides inflicted tremendous pain to the patient. But they are willing to forgive PQR since it is now following the same line of treatment which XYZ would have followed.
There is a third hospital (LMN), but it is new, untried, untested and lacks adequate infrastructure. The doctors there have good track record of minor surgeries and treating minor ailments. But trusting them with a serious case and major surgery could be a big risk.
In the meanwhile—
(a)   Doctors and management of XYZ are accusing the management and doctors at PQR of unethical practice and incompetence, charging them with appropriating their diagnosis and following the same line of treatment as they had suggested.
(b)   Doctors and Management at PQR are trying hard to convince the relatives of the patient that if they consider shifting from their hospital, the life of the patient could be at serious risk.
(c)    The doctors and management of LMN are trying to lure the relatives of the patient with a promise that they would engage the good doctors from XYZ and continue with the same treatment at somewhat lesser cost.
PS:
If it is not clear enough, I may disclose identity of the characters in this story:
The patient - Indian economy
Relatives - Indian voters
XYZ - Dr. Manmohan Singh and Sonia Gandhi managed UPA
PQR - Narendra Modi led and managed NDA
LMN - The coalition of regional parties

Tuesday, April 16, 2019

Food inflation conundrum

"Wishing all readers happiness and gaiety on occasions of MAHAVIR JAYANTI and EASTER."
Next post will be on Monday, 22 April 2019.

 
Some food for thought
"We have no firm hold on any knowledge or philosophy that can lift us out of our difficulties."
—Anne Sullivan (American Educator, 1866-1936)
Word for the day
Conlang (n)
An artificially constructed language used by a group of speakers, as opposed to one that has naturally evolved such as Esperanto and Klingon.
 
First thought this morning
Looking for some inspiring story for my story telling session in a municipal primary school, I came across this story of a brilliant woman, Ms. Krishna Yadav (see here).
Krishna ji, hails from a small village in Western UP. Daughter of a small farmer, she never went to school and was married to a man who dropped out of school in 3rd standard.
More than a decade back, economic stress and fate brought the family to Delhi NCR in search of job and a dream to give good education to two children. The couple started with leasing a small piece of farm land in Gurgaon and growing vegetables. Growing and selling vegetables however did not make them enough money to make two ends meet. Krishna Ji then decided to do something more. She attended a very short term course of pickle making run by Agriculture Department, and started making pickles at home. Her husband would sell the pickle made by him along with the vegetables he grew on a table put on roadside.
Krishna ji kept innovating new products while maintaining high standards of quality and hygiene she had learned during her training. Soon the business started with a capital of Rs3000, grew manifold. Though illiterate, she used all techniques of business management. She did backward integration by putting with her own mustard oil mill and spice processing unit, to manage cost and high quality.
Today she provides employment to 1500 mostly uneducated women and makes 200 varities of pickles, jams, juices, etc. Her daughter has completed BSc and BEd and aspires to be a good teacher.
The best part is that her pickles are amazing and her workshop & shop happens to be just 500mtrs from my house, and I never knew about this till I watched this YouTube video.
Food inflation conundrum
India has received below normal rainfall in each year since 2014. Some estimates suggest that even 2019 southwest monsoon could be below average. In past year the total food grain production has increased by just 2% CAGR. A substantial hike was also announced in minimum support prices (MSP) for various crops last year. Last five years have seen almost 50% jump in total personal disposable income of India. But all this has failed to impress food inflation that has mostly trended down in past five years.
I feel, this food inflation conundrum needs a much deeper study by experts of the subject.
As a common man what I could gather from speaking to other common man on street is as follows:
There are multiple reasons.
(a)   Historically, the food prices in India have been controlled by hoarding mafia. After Demo the holding capacity of hoarders has been hit badly. This has resulted in persistently lower food prices, especially in popular items like pulses, onions, tomatoes etc.
(b)   On the other hand, there has been significant improvement in supply due to better seed quality and improved irrigation facilities. However, this higher supply has not been met with equivalent rise in household demand. The reasons for this poor demand growth could be as follows:
(i)    Decline in effective wages. Despite higher total disposal personal income, wages have trended down. This indicates that averages for per capita income and disposable income have got much more skewed due to rise in income inequality.
(ii)   Rise in discretionary expenses, like telecom, transport, education and health.
(c)    The most important argument is that though the rate of annual food inflation is low, the absolute prices of many commodities are high and unaffordable for many. We may need substantial rise in wages to correct this anomaly. Apples at Rs200/kg and Mangoes @Rs150/kg are unaffordable even for many middle class households, though their annual inflation rate may be close to zero.
(d)   Liberal imports has led stabilization of pulse, oil seed and onion prices. Cartel led by some politicians and large business families appear mostly broken.
(e)    Better regulation of commodities' future trading and closure of NSEL has also helped curbing excessive speculation, in view of some traders.
(f)    Globally the crop productivity improvement may have peaked, but India has still long distance to go. The visibility of future productivity improvements is very high, and that may keep food inflation expectations anchored.
On the other side, all major political parties are promising material rise in farmers' income and social security net for urban poor, unskilled and unorganized workers etc. This will eventually lead to rise in demand for food items.
Moreover, the climate change is now reflecting ominously on weather and crop patterns world over. This may lead to supply disruptions and higher prices, rather abruptly.
It is therefore important that all policy makers and market participants take a holistic view of the inflation trajectory and plan accordingly.
For the time being, I am cutting weight of food inflation in my investment strategy matrix by 50%.