Do it yourself

Friday, July 19, 2013

On the straight road - II

We maintain our 8000 Bank Nifty target in next 12months.

Financials especially banking sector is at core of the Indian equity markets. In past few months benchmark indices have shown a divergent trend from the financial sector, as consumers, pharma and IT have held the benchmark indices at higher levels while financials have corrected sharply. YTD Bank Nifty is down over 10%, whereas Nifty is higher by ~2%. This being inarguably the most over owned sector has evoked more concerns amongst investors.

InvesTrekk Research has consistently maintained its underweight stance on Indian banking sector for past one year. The reasons for our negative view on Indian banking sector, especially PSU are simple. Consider the following:

(a) It is common knowledge that a large section of India’s capital intensive long gestation enterprises is under tremendous financial stress. These enterprises engaged in critical infrastructure sector like roads, power, ports, airports, telecom, metals & mining etc. are vital to aggregate health of the economy. Besides, SME segment that is critical for overall employment and consumption growth, is also reeling under lower demand, high input cost and higher financing cost.

It would be unreasonable to expect that Indian economy can sustain even 5-6% growth level without these enterprises participating, as the government’s fiscal condition doesn’t allow it to invest on its own.

The economic recoveries have never occurred when a large number of corporate balance sheets are under extreme stress. This stress therefore has to consolidate in fewer hands. Traditionally, the consolidation process has seen banks taking over the major share of financial stress on their balance sheets. The ‘B’ in the P/B ratio of banks is therefore subject to substantial lower revision.

(b) Unless the financial stress consolidation process makes substantial progress, we may not see credit growth to industrial sector returning on sustainable basis. The rising number of stalled and abandoned projects and sharp fall in new project announcement is testimony to this fact. It clouds the income forecast for banks. The present forecast of ‘E’ in P/E and ‘R” in ROA therefore may not make much sense.

(c) We believe that a large amount of sub-standard and loss assets have either been masquerader as restructured assets or refinanced. The transaction usually involves hike in interest rates and transaction fee. High interest and fee income of banks despite slowing businesses and deteriorating asset quality could be explained by this. Obviously, it is not sustainable as in most cases neither principle not interest and fee are recoverable.

(d) RBI has given enough panic signals in past six months, though it has so far not taken any decisive action to stem the rot. Politics rather than economics and commerce clearly seems to be the dominating factor.

(e) The excitement over new licenses is also not comprehensible. If things progress normally, the banking license should become open ended and therefore command no premium. Business wise, it will be long before any new bank makes money.

Thought for the day

“Life is really simple, but we insist on making it complicated.”

- Confucius (551-479BC)

Word of the day

Gobbet (n):

A lump or mass.

(Source: Dictionary.com)

Shri Nārada Uvāca

What should Indians pray for – a strong US recovery followed by QE tapering and rate tightening or US recession and continuation of QE and low rates?

Thursday, July 18, 2013

On the straight road - I

Yesterday we suggested that investors may follow a rather simple investment style to achieve their investment goals. It is highly likely that most find this path boringly long and apparently less rewarding, but in our view this is the only way sustainable returns could be obtained over a longer period of time.

In our view, taking contrarian view (infrastructure), speculating policy changes (e.g., QE tapering, gas pricing, FDI rules relaxation etc.) anticipating short term performance (e.g., monthly sales, quarterly profits etc.) or arbitrage on information/rumor of a corporate action are some examples of circuitous roads or short cuts that usually lead us nowhere.

Taking straight road means investing in businesses that are likely to do well (sustainable revenue growth and profitability), generating strong cash flows; have sustainable gearing; timely adapt to the emerging technology and market trends, and most important have consistently enhanced shareholder value.

These businesses need necessarily not be in the “hot sectors” like commodities in early 1990’s, ITeS in late 1999s, or infrastructure and financials in 2004-07.

In next few days we shall discuss why contrarianism or lottery seeking attitude to investing might not be the right one and may expose investors to greater losses.

We begin by an argument against investing in infrastructure sector in India. Admittedly, the argument may be little too late in the day and benefits from hindsight. Nonetheless, it is still valid and deserves consideration.

In our view, the “need” for infrastructure, both social and physical, in India is tremendous. However, despite 8%+ growth of five year and manifold rise in government support for society especially poor and farmers who happen to constitute over 2/3^rd of India’s population, the “demand” for infrastructure has not grown substantially. The affordability and accessibility to basic amenities like roads, power, sanitation, education, health, transportation, housing etc, is still low.

As per recent government admission almost 2/3^rd population cannot afford to buy basic cereals at market price and therefore need to be subsidized. Only 10% of adult population has access to some formal source of financing. Ever rising losses of state electricity boards highlight incapacity or unwillingness of people to pay power bills. The loss incurred by much acclaimed Bandra - Worli sea link in the heart of Mumbai highlights low affordability to pay toll tax for using roads.

The optimism on the sector was consequence of overconfidence and indulgence of administration and corporates who sought to advance the demand for civic amenities to make abnormal profits. This was not only a classic case of capital misallocation, but also misgovernance by allowing a select few take advantage of policy arbitrage.

The collective wisdom of market has understood that the business model of most of so called infrastructure firms is unsustainable. Those taking a contrarian stand may realize it the hard way. We suggest revisiting the sector after 3years or 5year if you like so.

Thought for the day

“A person should not be too honest. Straight trees are cut first and honest people are cheated first.”

- Kautilya (350-275BC)

Word of the day

Scabrous (Adj):

Full of difficulties.

(Source: Dictionary.com)

Shri Nārada Uvāca

The concessions being offered by the beleaguered government are signs of desperation not reforms.

Someone would need to answer, if FDI in defense and telecom etc could have been relaxed so effortlessly, why the government kept waiting for 9 long years.

Anyway, given the policy mess, the government may not find many takers this morning. Rather Mittal and POSCO have exited projects.

Wednesday, July 17, 2013

Roads, ropes and trampoline

“No one was ever lost on a straight road.”

The conventional wisdom guides that roads are meant for moving forward; ropes are meant for tying and anchoring and trampolines are meant to get momentary high without moving an inch forward.

Usually, the chances of reaching the planned destination are highest if the traveler takes a straight road. Similarly, the chances are least if you just ride a trampoline. Walking on ropes may sometimes give you limited success.

The developments in global financial markets in past couple of weeks highlight that presently very few persons are interested in taking the straight road. Though there are many, like the legendary Warren Buffet, who continue to vehemently advocate this path, most may find this path long and boring.

The market reactions to past two Fed statements, RBI action on Monday evening, Infosys results last week, and government’s announcements regarding proposed changes in natural gas pricing policy all suggest that jumping on trampoline is the most preferred activity these days amongst investors.

The central bankers across the world are seen preferring to walk the tight rope. US Federal Reserve is focused on employment, BoJ is focused on deflation, ECB is focused on maintaining integrity of Euro and RBI is focused on price levels. All of them claim reasonable degree of success in achieving their limited stated objectives.

But what about other problems? For example, RBI did manage to control prices and might also be able to stem the INR slide beyond Rs60/USD level in the short term. However, in the process, it lost focus on deteriorating growth, employment, asset quality, and consequently financial stability. Having lost critical time and exhausted most policy tools, RBI may soon find that it has reached the end of rope without falling, but it means nothing.

Investors may too find it in due course that by jumping up and down with every bit of news (actually not only NEWS, but on casual remarks of Bernanke et. al. made at random symposiums) they are only losing their vital energy and time without moving an inch forward.

In simpler words, we suggest that investors should take a straight road howsoever long, boring or painful the journey may be. Invest in businesses that are likely to do well (sustainable revenue growth and profitability), generating strong cash flows; have sustainable gearing; timely adapt to the emerging technology and market trends, and most important have consistently enhanced shareholder value.

Expecting next policy move, especially in the current environment, is fraught with high risk. Historically, the business that are impacted by volatility in policy formulation, have seldom rewarded minority shareholders – public sector enterprises being the best examples.

The economic recoveries have never occurred when over half the corporate balance sheets are under extreme stress. This stress therefore has to consolidate in fewer hands. Financials therefore will see much worse days going forward. Our target ‑ Sub-8000 on Bank Nifty in next one year.

Thought for the day

“There is no good in arguing with the inevitable. The only argument available with an east wind is to put on your overcoat.”

- James Russell Lowell (1819-1891)

Word of the day

Fribble (v):

To act in a foolish or frivolous manner; trifle.

(Source: Dictionary.com)

Shri Nārada Uvāca

Manish Tiwari perhaps forgot that a large part of our population lives on Rs17/day. Therefore, Rs.5 is indeed a big deal for an average Indian.

Thursday, July 11, 2013

Choose between short term pain or perpetual agony

Conventional economists have long argued that monetary and the real economies interact in a limited way through the determination of nominal quantities such as prices, wages, exchange rates and so forth. Therefore although a change in the quantity of money may create short term disruptions, the real economy would eventually settle at the same long term equilibrium as before. Implying that at 'normal' levels of money, a change in the money supply will not alter the long term economic equilibrium.

In short, additional money made available to people, without any additional productive capacities made available, makes no difference to real economy. It just increases the price of existing goods in the same proportion as the additional money available.

The problem however occurs when the supply of additional money becomes a constant and that too in an abnormal proportion. This not only disrupts the short term equilibrium but alters the structure of long-term equilibrium too. This is precisely what is happening in the case of economies that have followed excessively loose monetary policies for an extended period of time. In fact, this has impacted the emerging economies which fell prey to this slush of excess money and let their medium to long term equilibrium altered, believing that this excess money is ‘normal’ and would remain a constant.

India unfortunately is one such economy that has allowed the structure of its real economy tempered, though still not irretrievably, by easy money in past 10-15years. For example, consider the following:

The excess money or credit that got created out of thin air has not flown equally to all. It rather has got concentrated in few hands. However, the illusion of growth and prosperity has engulfed all. The aggregate numbers have become gigantic; and it has led to ballooning of the aspirations of the underprivileged to unsustainable levels.

Given that we are democracy that works on “relative majoritism” feeding these aspirations has become a central subject of competitive politics. The state finances are therefore in a structural long term pressure with no exit in sight.

The rush to accumulate cheap credit has lead to excessive debt both at government as well as corporate level in past 7years. This has brought a lot of unmanageable demand forward in time. For example, over 50GW power projects were initiated and fertilizer policy was made when the feed stock supply chain to fuel the power and fertilizer plants was far from ready. The capacity to pay unaffordable toll was not there when over 5000km of toll roads were commissioned. Many of these power plants are lying idle and so are numerous industrial projects conceived based on supply assumptions from these plants. Many toll roads have become unviable or are lying uncompleted.

If we believe that this misallocated capital and unmanageable changes in consumption patterns are short term phenomenon, the correction is sure going to be extremely painful- prepare for it. And if we think that these are long term changes – there is no “great India story” as essayed by numerous analysts and strategists.

Thought for the day

“If you do not change direction, you may end up where you are heading.”

Lao Tzu

Word of the day

Layette (n):

An outfit of clothing, bedding, etc., for a newborn baby.

(Source: Dictionary.com)

Shri Nārada Uvāca

100% FDI in telecom!

How does it help the ailing economy?

First, with the extant wavering policy environment it is difficult to believe that global players will jump in straight away.

Second, even if they do, it would essentially mean another round of disruptive pricing, implying further problems for existing players.

Wednesday, July 10, 2013

Is it decoupling again?

The popular commentary these days is suggesting, rather aggressively, that the largest economy the USA has overcome all its problems – unemployment, fiscal deficit, public debt, housing market, household leverage and above all growth and investment cycle. In the same breadth it is also mentioned that emerging markets that have thrived on the excessive liquidity created by US Federal Reserve are destined for a painful grind to dust as the Ben Bernanke starts withdrawing the liquidity.

In our view, nothing could be farther from truth. The USA still has over 7% of its workforce unemployed. Number of people surviving on food stamps is highest in recent decades. Growth for the current year is expected to be mere 2%. Investment cycle is far from robust. Deficit has come down on spending cuts, but continues to be threateningly high. This is when Fed had been printing 24X7. A lunch break of 45minutes is expected to worsen things again. Moreover, with 3/4^th of global population in despair, a USA recovery could only be unfathomable.

As Howard Kunstler of Kunstler.com puts it:

“The coordinated effort to devalue gold - so as to maintain the sagging reputation of the world’s re$erve currency - has had the effect mainly of funneling it out of weak hands in the west to strong hands in the east, to countries that at one time or another we regarded as adversaries. China and Russia have been backing up their respective trucks at the gold warehouse loading dock, and before too long they will have yuan and rubles with more credibility than the US dollar.

For the moment, holders of weakening currencies are seeking refuge in seemingly “stronger” dollars in bubbling equity markets. Many more dollars have been stashed on the balance sheets of the Federal Reserve in the form of bonds purchased in galumphing bales since 2009 - only the catch is that many of these bonds are worthless, especially the mortgage-backed securities. The collateral exists in the form of mold-infused sheetrock, swimming pools with algae blooms, and strip malls left with a single tenant: the wig shop. The Fed will never be able to unload this hoard of garbage, even if it “tapers” its buying of new garbage. The dollars that the Fed creates out of nothing are trapped in this fetid backwater of rotting capital, destined to go nowhere - surely not into activity that produces real wealth, or the means to continue being civilized.”

The conventional economists may argue that the disruptions created by the excess money are at best temporary and changes in the money supply do not affect the 'real' economy, e.g., patterns of trade, production and consumption. The additional dollars make no additional productive capacity available and they alter no tastes. Therefore, the economy eventually will settle at the same long term equilibrium as before.

However, as we see in the current context the disruptions are so large that these may threaten to alter the character of the real economy and “long term” may be too “long” to be relevant.

…to be continued

Thought for the day

“The woods are lovely, dark and deep

But I have promises to keep,

And miles to go before I sleep,

And miles to go before I sleep.”

- Robert Frost (1874-1963)

Word of the day

Edacity (n):

Voraciousness; appetite.

(Source: Dictionary.com)

Shri Nārada Uvāca

Defense ministry asks armed forces to cut fuel usage by 40%.

Would it not be better if the governments asks its ministers, MPs, MLAs etc. to save fuel? More savings could perhaps be achieved if Public Sector employees could be told not to use official vehicle for private use.

Tuesday, July 9, 2013

Credit conundrum

Recent sectoral credit and weighted average lending rate data published by RBI raises some pertinent questions:

(a) The share of industry in GDP over past two decades is unchanged, but the share of industry in bank credit has fallen by 25% despite rate for industry falling the most. Does this explains supply side constraints of the economy?

(b) The share of agriculture in GDP has fallen by 50% over past two decades. But the share of credit to agriculture sector has fallen by just 12%. Does this explain higher capital intensity of agriculture or populism, as there has been little improvement in productivity.

(c) Share of personal loans has more than doubled over past two decades, though housing loan rates in 2012 were 40% higher as compared to 1992. Does this imply speedier urbanization or unsustainable bubble in housing sector?

Thought for the day

“Confusion is a word we have invented for an order which is not understood.”

- Henry Miller (1891-1980)

Word of the day

Yawp (v):

To utter a loud, harsh cry; to yelp, squawk, or bawl.

(Source: Dictionary.com)

Shri Nārada Uvāca

PM to meet India Inc on 29 July to discuss:

1. Measures to correct CAD.

2. Measures to revive industrial growth.

3. INR Depreciation and its impact on trade and industry

4. Skill development and ways of accelerating it.

5. Development of industrial corridors.

…………….???

Monday, July 8, 2013

Know thyself

Traversing through the incredibly wonderful landscapes and meeting over 10000 people across 15 states we tried to discover India in past few months. We sought to explore the country to understand the current social, political and economic milieu.

What we found was quite reveling though not completely surprising. The primary learning was that after 65years of becoming a political union, India is perhaps still merely the one. We have made little progress in becoming social and economic union. Consequently, a national approach to anything was conspicuous by its complete absence in general public discourse. This state of affair is clearly reflected in diverse socio-economic conditions of different states and in many cases of various regions within a state.

In our view, therefore, any program, policy, or strategy that is formulated purely from a national viewpoint has little chance of successful implementation in India. To be successful, the programs, policies and strategies have to be formulated and implemented at the smallest administrative unit level, e.g., village panchayat or town municipality.

We also discovered that why Mahatama Mohandas Karamchand Gandhi was the best politician, administrator and entrepreneur in India. His model of Su-raj, self-reliance, village economy, fully decentralized political system, and austerity etc. are not only relevant today but desperately needed to sustain India as a socio-economic unit.

In our view, the whole debate over the potential economic growth of India is misdirected. 5% or 8% or 10% are just meaningless numbers. What we experienced is that the current rate of growth is largely given. With current level of poverty, hunger, destitute, exclusion and youth – if everyone has to earn one meal a day this level of growth would happen notwithstanding non-governance and fractured polity.

More important, this level of growth is sustainable and desirable provided we could make it inclusive. The higher rate of growth, in the current circumstances, is totally unsustainable and therefore undesirable.

We found abundance of evidence how the five years of higher growth has led the economy and society to burst at all seams. Our roads, factories, hospitals, schools, society, families, towns, villages, drains, mountains, rivers, forests, mines, politicians, managers, labor, legal and regulatory framework – nothing is ready for higher growth.

Uttrakhand tragedy is just a small example. Other evidence could be found in numerous ruins of abandoned projects, unmanageable financial and mental stress, CAD, labor unrest, garbage dumps in the city centers, young cardiac and diabetic patients, unemployable graduates & post graduates, corruption, poor corporate balance sheets, inflation, power and water shortages etc.

A successful investment strategy has therefore to be based on sustainable 4-5% growth assumption. As we said in an earlier note - Shampoo, detergent, noodles, motor cycles are fine.

Read our discover India series

Anxiously Indifferent

Karnataka & Delhi

Goa, Punjab and Haryana

Corruption Matters, Alas! Not the way it should

Reforms ain’t mean the same for Delhi and Sangli

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

Anxiously Indifferent

Karnataka & Delhi

Goa, Punjab and Haryana

20 Program: Agenda for 2014 election

Modi Vs. Rahul

Corruption Matters, Alas! Not the way it should

Reforms ain’t mean the same for Delhi and Sangli

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

Anxiously Indifferent

Karnataka & Delhi

Goa, Punjab and Haryana

20 Program: Agenda for 2014 election

Modi Vs. Rahul

Corruption Matters, Alas! Not the way it should

Reforms ain’t mean the same for Delhi and Sangli

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”.