Some food for thought
"Plenty of people wish to become devout, but no one wishes
to be humble."
—Joseph Addison (English Writer, 1672-1719)
Word for the day
Guddle (v)
To catch (fish) by groping with the hands, as under rocks or
along a riverbank
First thought this morning
Mohit Raj, a young man in 30s, completed his studies about a
decade ago. He had two roads to choose from - (1) Accept the campus placement
offer from a leading private sector bank and pursue a lucrative career in corporate
banking and (2) listen to his heart and dedicate his life to welfare of
underprivileged students.
Mohit, younger of two brothers, comes from a lower middle class
family from Bareilly in Uttar Pradesh. His parent worked about 14-16hrs a day
to give good education to both the children. The elder brother followed the
traditional path - IIT, IIM, MNC Bank, Singapore, marriage settled. But Mohit
did not want to. He would rather choose the path less travelled.
He applied for one year fellowship program of Bill Gates funded
Indo American Foundation and was selected. In this program he gained rich
experience of social work, especially child rights. Post his fellowship
program, he worked on few of projects of the foundation in various parts of the
country. The work took him to heights of Kargil and Drass in J&K, dense
forests of Satpura in central India, and backwaters of Kerala.
In 2011 he and his college time friend Sanchi decided to start
something of their own. Thus was born, TYCIA (Turn Your Concerns Into Action)
Foundation, with a paltry capital of Rs10000. They rented a small room in a
village near Dwarka in New Delhi and started a bridge school for the children
of migrant laborers. Since then they have travelled a long distance working for
children of migrant laborers in cities, tribal children and farmers in forests
and imprisoned youth in jails. They manage collective farming projects for
Korku tribals in Satpura forests of MP. They run a 1000kms Explore India tour
for urban youth taking them to the most backward areas in country and make a
case for inclusive growth. They give life skill and formal education to youth
incarcerated in various prisons of the country. If sometimes you feel skeptic
about the degeneration of India society think about youth like Mohit and you
will immediately be filled with hope and optimism.
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To know more, you can visit https://www.facebook.com/TYCIA.Foundation and https://www.tyciafoundation.org/
Hedge, don't panic
While an increasing number of market participants speak about
likely market volatility in the wake of election results and suggest methods to
protect against an "adverse" election outcome on 23rd May 2019, few
have highlighted the structural changes that have taken place in Indian economy
in past decade or so. Many recent news items that announce these changes have
not been adequately highlighted. For example, consider the following:
(c) The external
trade profile of India has seen material transformation in past one decade.
Imports have been moving away from traditional oil & gold domination; and
exports have diversified away from traditional consumer goods like textile,
gens & jewelry, leather etc. Manufactured engineering goods have become a
major source of export income. Electronics has become a major import item.
With many global leaders like Samsung, MI, Apple, LG, etc.
deciding to produce in India; new biofuel policy raising the ethanol blending
to 10% in transportation fuel; massive investments in renewable beginning to
yield results; electric mobility becoming a viable option in next 5-7years; and
various productivity enhancement missions in pulses and oilseeds achieving
targets, we may see a definitive shift in India's import profile going forward.
This all shall happen when India gains prominence as a
manufacturing export destination.
(d) Shifting away
from colonial (cheap labor and material source) model, India is also becoming a
research and development (R&D) hub for global manufacturers and service
providers.
In my view,
ignoring these trends or taking these trends only as a measure of shift from
China due to geo political or tariff reasons would be a mistake.
These changes are
primarily outcome of massive investment made in infrastructure development over
past 20yrs. The investments that were primarily prompted by the economic
sanction post Pokhran tests in 1998, and accelerated as part of fiscal stimulus
in the wake of global slowdowns in 2001 and 2009.
We have paid huge
cost of this massive infrastructure building drive in terms of crippling of
financial sectors due to NPA problem, episodes of massive corruption leading to
paralysis of policy administration and disruptions in markets place due to
large scale bankruptcies.
But it is also a
fact that a high quality capacities terms power generation, ports, road
network, railways, civil aviation, financial services, telecommunication,
manufacturing, and GSTN have been created and/or shall be put in place in next
2-4yrs.
This infrastructure
surplus will be the primary driver of India's foreign trade (and trade
balance), job creation and socio-economic transition.
This status quo,
in my view, shall prevail regardless of the form and constitution of political
administration at the helm.
Investors
ignoring these trends under influence of mostly speculative fears about
political conditions post 23rd May, would do that at their own risk. Hedging
against potential volatility may be a good idea. Panicking from election
results is worse idea.
More on this
tomorrow.
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