Do it yourself

Thought for the day

“Wandering one gathers honey.”

Word of the day

obsequious (Adj):

Servilely attentive; compliant to excess; fawning.

(Source: Dictionary.com)

Shri Nārada Uvāca

One could understand the Congress rush to get Food Security Ordinance passed. But what about the President?

Was it not appropriate that he asked the government “why it cannot wait for another 2weeks?” Especially, when the government is in minority.

Moreover, the former FM in the President might have wanted to know from where the money is going to come, especially when the government is in default in complying with FRBM Act.

Friday, July 5, 2013

Habit of not learning from mistakes

If a survey is conducted to find out major events of the extant UPA II regime, infamous 2G and Coalgate scandals would certainly find prominent place in the outcome.

These alleged scams have caused serious damage to the Indian economy by adversely impacting the confidence of businesses and investors, diminishing the credibility of institutions like CAG, CBI, PMO, impeding the investment in new projects, and leading to higher stress in the financial system as many large projects would remain stuck at various stages of implementation till the long drawn legal process is completed.

From the ongoing process for grant of new banking licenses we conclude that the government and regulators have learned little even from their recent experience.

It is a common knowledge that the status of financial inclusion in the country is extremely wanting. Over two third of adult population does not have a bank account and less than 10% adults have access to formal credit of any sort. Under such circumstances, what is the justification for “rationing” new bank licenses and opening the window once in over a decade.

In 2G spectrum allocation many wanted the telecom license just because scarce spectrum was bundled with these. The subsequent unbundling took all non serious players out of the race.

Similarly, during 2005-2009 everyone wanted to put up a power plant because the approval came with hitherto not available coal mines. We have seen apparently most non-serious players resorted to unethical ways to get mines so that could sell it later. Few were interested in actually producing power and supplying it to bankrupt SEBs.

The current list of bank license application might also includes some names who are actually not interested in operating banking business or help in achieving the objective of financial inclusions. The data suggest that the new generation banks’ record in helping the cause of financial inclusion is far from impressive. They may be wanting license because they believe that the entry barrier to this business will remain and therefore market will assign substantial value to the “license” alone, which could realize in due course.

If the government makes the procedure to obtain banking license an open ended regular process, the needless excitement will not be there and market will then rationally assign value to banking business and not banking license.

One fails to understand, if RBI lays down a strict set of qualification criteria and operating guidelines, besides ensuring continuous monitoring, why banking business should be different from running an insurance or asset management business.

It had been our consistent view that though our government has proclaimed the “License Raj” dead two decades ago, in mindset of our politicians and bureaucracy it still endures. Unless we change this mindset, our economy will continue to struggle in 5-6% growth range.

Thought for the day

“History made when mindset changed”

Word of the day

Dandy (n):

Something or someone of exceptional or first-rate quality.

(Source: Dictionary.com)

Shri Nārada Uvāca

Does Food Security Ordinance imply early election or on schedule 2014 elections?

Given the impossibility of implementing the legislation in next 9months, ideally Congress would like the Bill to fall in the Parliament, which would lead the Ordinance to lapse.

Thursday, July 4, 2013

Mandate 2014 – Tamil Nadu: zillion deities keep them happy

We visited Tamil Nadu (TN) in past few days in the last leg of our Discover India study tour. We traversed through 15 out of 32 districts falling under Chera Nadu, Pallav Nadu and Nadu Nadu regions of the State.

The most striking part of our TN was problem in communicating with people. For the first time in our journey across the country we felt stranded. In many villages we could not find anybody who could communicate in Hindi or English. With all road signs and sign boards also in Tamil, not taking a local help along was a mistake. Only Google Maps rescued us. Nonetheless, the people in general were very congenial.

It was wonderful to traverse through beautiful landscape inhabited by happy and pious people. The only problem perhaps is that seemingly they have extended their pious nature little too far. All achievers in the State are invariably accorded the status of God – be it politicians, movie stars, sportspersons, artists, teachers, local administrators, police officers or even a Robin Hood like local criminal.

The key highlights of our TN visits are as follows:

(a) The State inarguably is the most urbanized state in the country, with strong social and physical infrastructure. It has one of the strongest primary education cultures. However, ever rising income disparities have resulted in larger dropout rate.

(b) The State has a well developed and perhaps the most diversified industrial base. However, in recent time infrastructure constraints, especially power, have certainly impacted the industry.

(c) The State also has one of the most diversified primary sectors (agriculture and related activities) despite a large part of the state facing chronic water shortages.

(d) The State has high incidence of income disparities. Society is deeply divided on caste and community lines, though religion is not a dividing factor.

(e) A surprising revelation was the faith of people in political establishment. Despite being convinced of their corrupt ways, the people had strong party affiliation and unflinching trust in their leaders. However, unlike USA where similar party affiliation is seen, here the trust and allegiance comes from peoples’ reverence for individuals not from any ideology or socio-economic agenda.

(f) Uniquely, we found a strong private enterprise culture along with huge dependence on government provisions.

(g) Village economy is mostly feudal. Formal credit flow is poor and exploitation high.

(h) Like AP, gold, movies and liquor passion with people but land not so much.

(i) The most heartening feature was common peoples’ zeal to preserve and promote their traditions, culture, art and religion.

Read our special series Mandate 2014

Thought for the day

“Democracy is also a form of worship. It is the worship of Jackals by Jackasses.”

- H. L. Mencken (1880 -1956)

Word of the day

Sprechgesang (n):

A vocal style intermediate between speech and singing but without exact pitch intonation.

(Source: Dictionary.com)

Shri Nārada Uvāca

Why Gujarat fake counter case is so much more important than so many other SITs, CBI investigations and allegations of state atrocities especially in J&K and North Eastern states.

Wednesday, July 3, 2013

Mandate 2014 – Andhra Pradesh: land, liquor, gold and movies

We visited 15 out of 23 districts Andhra Pradesh (AP) in past one week. After Bihar and West Bengal, AP appeared like a different world altogether. Bountiful nature exploited judiciously, people forward looking, women emancipated, agriculture productivity high, farmers and agriculture labors doing well, education a movement, primary health facilities perhaps best in the country.

On the negative side, economic disparities are very high. The difference between top 10% and bottom 10% would probably be the highest in the country. The society is deeply divided on caste lines, though not so on religious lines.

The key highlights of the visit are as follows:

(a) We found Andhra one of the most balanced economies in the country. Except for a few northern districts, agriculture is well developed and productivity high. A strong education movement has provided a strong base for services sector. Industry, especially knowledge based industry such as IT services, and high risk R&D based industry such as pharma have flourished due to high risk taking aptitude, large pool of skilled professionals and supportive administration.

(b) To our surprise, we found much stronger savings and investment culture in the state. Our deep interaction with about 400 people suggest that the State people have much stronger enterprise culture than the commonly recognized Gujarati and Marwari communities.

(c) Land, liquor, gold and movies are strong passion with the people, in that order. However, excessive consumption of liquor has not damaged the basic fabric of the society as was found to be the case in case of Haryana and Punjab.

(d) Contrary to the trend seen in other primarily agrarian states like MP, UP, Punjab and Haryana, the investment in agriculture in the State is high.

(e) Social infrastructure is well developed, mostly due to strong community culture and private initiatives. Physical infrastructure is much better but has suffered badly in past 5-6years due to political instability.

(f) The state has a large middle class with strong saving, investment and consumption tendencies. Presently, investment activities in the state are at a standstill both in public as well as private sector. The State is probably one of the better lead indicators of national economic trends.

(g) Politically we found the State fast heading towards complete regionalization, on the lines of Tamilnadu and Uttar Pradesh. Congress is at risk of losing this State for good. BJP in any case is a marginal force here.

(h) US Visa is still a passion with middle classes. But unlike Punjab, people are mostly seeking good education and professional opportunities not just immigrating at any cost.

Read our special series Mandate 2014

Thought for the day

“Politicians fascinate because they constitute such a paradox; they are an elite that accomplishes mediocrity for the public good.”

- George Will (1941 - )

Word of the day

Muster (v):

To gather, summon, rouse.

(Source: Dictionary.com)

Shri Nārada Uvāca

Several reports are suggesting that Uttrakhand government had been negligent in acting upon ISRO and IMD warnings. Reports also suggest that the disaster management apparatus of the state was grossly inadequate to manage so many pilgrims.

The mute question is could the government be tried for “Causing multiple deaths by negligence”.

Tuesday, July 2, 2013

Mandate 2014 –West Bengal: Confused, complex and rebellious

Our team travelled through 11 out of 19 districts of West Bengal in past week. What we witnessed was not totally surprising but still shocking. It seemed like a different world altogether. Most of the 90mn population lives in abysmal poverty. Persistent exploitation appears to have turned rural Bengal into a deeply disturbed society. The internal disturbance manifests itself in profound rebellion against authority and system.

We found the state completely cut off from the rest of country in terms of socio-economic development.

The key highlights of our West Bengal tour are as follows:

(a) Over three decades of communist rule has little ideological impact on the peoples’ life. The only thing they seem to have imbibed from communist rule is rebelling against authority and system. The society is still divided on caste and religion lines. Economic disparities are as high as ever. There is little sense of “commune” or “community” insofar as economic activities are concerned. Moreover, the state mostly retains its colonial socio-economic structure – exporting raw material and labor and importing food.

(b) The much acclaimed land reforms have apparently led to fragmentation of land holdings, making the primary economic activity of the state most uneconomical. There are virtually no signs of cooperation movement in agriculture or industry. The farming techniques are primitive.

(c) The rebellion mostly manifests against authority on economic and political issues. The social inequality is not only accepted but to some extent protected as just. This makes the society confused and complex.

(d) The current regime that ended the over three decades of communist rule appears to be making no difference. The people, policies, program and vision all look the same. The only change that is conspicuous is the beginning of local vs. outsider debate amongst urban middle class. Many fear that it will not be long when non-Bengali populace faces prejudice

(e) The rebellion in the society, especially against the system has traditionally constricted the growth of industry in the state. There are no signs of any change in the offing.

(f) The feudal superiority complex of middle and upper middle class is intact, more so in rural areas, despite long communist rule.

(g) The most shocking observation was the gender bias.

(h) The sense of economic well being that comes from the aggregate data is mostly derived from few pockets like port city of Haldia, capital city of Kolkata and mineral resource belt of Durgapur – Asansol. There are little signs of urbanization and modernization beyond these centers.

(i) Employment status is poor with stagnant industry and least productive agriculture. The fabled Bhadralok is virtually non-existent outside Kolkata.

(j) Unlike other states, the construction boom in the state is limited to few select areas.

(k) WB is perhaps the only large state where 25p coins are in currency.

Read our special series Mandate 2014

Thought for the day

“Ideology, politics and journalism, which luxuriate in failure, are impotent in the face of hope and joy.”

- P. J. O'Rourke (1947 - )

Word of the day

Scrum (n):

A place or situation of confusion and racket; hubbub.

(Source: Dictionary.com)

Shri Nārada Uvāca

Agenda for Monsoon session of Parliament is set. Opposition will stage multiple walkouts demanding resignation of Ajit Singh (Jet Ethihad deal), Moily (favor to Reliance with gas price hike), Bahuguna (mismanagement of disaster), Navin Jindal (coal gate), and PM (collective responsibility for all this). Congress will try to unsuccessfully push Food Security Bill amidst din and blame it on the opposition.

Monday, July 1, 2013

Mandate 2014 – Bihar: brilliant people caught in political quagmire

In the last phase of our Discover India tour we travelled through 23 of 38 districts of Bihar state spanning across 8 divisions covering over 2300kms. With population of over 100mn people, the state is considered critical for aggregate growth and development of the country.

Traversing through this land of rich heritage, bountiful nature and brilliant people was a rather disappointing experience. Abysmal poverty, poor social and physical infrastructure, completely fractured political establishment, disinclined administration and deeply divided society on caste lines. We saw a little reflection of much acclaimed 10%+ growth beyond a few large and tier two towns.

The key observations of our Bihar states were as follows:

(a) The state of agriculture in this predominantly agrarian state is pathetic. Frequent floods, lack of labor (major surprise) uneconomical holdings, poor marketing infrastructure, lack of formal credit, social biases, scant food processing industry and high incidence of land related litigation were some major reasons cited for lower agriculture contribution to the state economy.

(b) Low agri growth and virtually absent private enterprise has resulted in large labor migration from the state in past 3 decades. This is a strong vicious cycle now which the administration is finding difficult to break despite sizable rise in social sector spending and mostly transparent implementation of MNREGA.

(c) In the current popular political context, it was inevitable to look for comparisons between Bihar and Gujarat. We found many stark similarities between the two competing states. Like Gujarat, a large component of the Bihar growth could also be attributed to the repatriated money by laborers working in other states. The level of indebtedness at household level is high and exploitive. Society is polarized on caste and religious lines. Land and construction is the largest contributor to the wealth creation in past decade or so. The major differences include over-reliance on government’s provisions in case of Bihar and highly fragmented political establishment.

(d) Power and poor water management are the most regretted infrastructure bottlenecks.

(e) The state of education beyond large towns and cities is dismal. Most teachers in villages were found unfit to be even high school students.

(f) Socio-economic disparities have grown substantially in past two decades. Though the current government has been largely successful in restoring the Bihari pride, the effort has not yielded significant socio-economic dividend.

(g) The incumbent government appeared losing support of influential middle class post breaking of NDA alliance in the state. As the social division on religious line is not found to be very strong in the state, the expected dividend from minority votes may not compensate for the loss. We see a material losses for ruling party in the next general election.

Read our special series Mandate 2014