Do it yourself

Friday, January 13, 2017

The dark fortnight is little longer this time

Thought for the day

"You can learn more about human nature by reading the Bible than by living in New York."

—William Lyon Phelps (American, 1865-1943)

Word for the day

Myrmidon (n)

A person who executes without question or scruple a master's commands.

Malice towards none

Trump says he has engaged the best dealmakers in the country to run the government.

Good dealmakers are always on look out for opportunities. They never shut the door on anyone or anything.

First random thought this morning

Budget 2017: It would be a great idea to leave lot of cash in peoples' hands. Lower direct tax, direct transfer of subsidies, cash incentive for buying first house, incentive for monetizing 200gms of gold, no fee on credit card usage, interest free 10yr loan for higher education of one girl child, etc are some suggestions.

Refrain from hiking service tax pending GST implementation.

The dark fortnight is little longer this time

I have written it couple of times before. The historical correlation between inflation, interest rates, currency exchange rates, terms of trade, demand and supply of credit, risk & cost of credit, fiscal policy, trade competitiveness, economic growth, commodity prices, etc. have weakened considerably, in past one decade. Economic forecasting, and investing & trading on that basis has become all the more difficult.

During this period, some European countries audaciously threatened to default on their debt obligations; defied many conditions of the bailout agreement and brought the global financial system on the verge of collapse; on more than one occasion. Even after 5-7yrs of bailout, these economies are nowhere close to be able to move out of ICU walking on their own feet. The sovereign bonds of some of these countries lost 50-80% of their value in the aftermath of 2008-09 global financial crisis (GFC). Some of these countries have been able to sell 30yr bonds at miniscule yield.

An unprecedented amount of money has been printed in the developed world, since first round of quantitative easing (QE) in 2009. In conventional sense, with this deluge of money, we should already seen couple of episodes of hyperinflation. But, what we have seen so far is episodes of disinflation. OPEC is producing much below its potential. Chinese factories have been shut down. Australian and Latin American mines are either shut down or producing below potential. On global basis, the unemployment is higher - not what Keynes would portend.

We witnessed a colossal amount of debt trading at negative yield. But it has apparently not catalyzed any amount of economic growth. Leave aside lot of opportunistic buybacks by many global corporations (to make their RoEs look great and consequent rallies in stock markets), the cheap credit has not led to any real investment. Only bond & stock prices have rallied. The world is still awash with huge unutilized capacities.

The threat of tiny economy like Greece exiting EU; or even smaller Iceland defaulting on a few billion dollar worth of debt, shattered global markets wiping off hundreds of billion dollars from asset prices. But when a larger and relevant economy like UK has decided to exit EU, the markets are mostly sanguine (after reacting nervously for couple of days).

Conventional and non-conventional monetary policy tools used by the large global central bankers are becoming increasingly redundant. Consequently, many leading currencies are presently valued far from their economic value . For example, even with persistent deflationary pressures, negative bond yields, and almost no economic growth - BoJ has to struggle a lot to weaken JPY. Despite enjoying trade surplus with most of its trading partners, China is able to devalue its currency.

I strongly believe that the present breaking of economic correlations is transitory in nature and order will be restored in due course. However, it is difficult to see that happening in next 4-5yrs.

Remember the famous dialogue of Hindi film Aandhi - Is baar Amavasya thodi lambi ho gayee (The dark fortnight is little longer this time)

Thursday, January 12, 2017

This time India is in playing 11

Thought for the day

"There is a strange reluctance on the part of most people to admit they enjoy life."

—William Lyon Phelps (American, 1865-1943)

Word for the day

Draconian (adj)

Rigorous; unusually severe or cruel

Malice towards none

UAE Army contingent in Republic Day parade, when ex Pak army chief Raheel Sharif is leading the Saudi led military alliance - interesting times.

First random thought this morning

Budget 2017: After so much threatening and posturing, it would be totally in order, if the government introduces some meaningful incentives for promoting voluntary tax compliance in the forthcoming budget. Materially lower tax rate could be ne such incentive.

This time India is in playing 11

In past one century, the global community has done many experiments to find a suitable global order. The year 2017, marks 100yrs of two very important global events.

In 1917, Russian revolution successfully dismantled the Tsarist autocracy and laid the foundation of USSR. In the following decades, many smaller independent European states would become subservient to a mighty Russian socialist army, and together become one pole in the emerging bi-polar world, forever shrouded by the specter of cold war.

In the same year, USA decided to join the War as an associate of the Allies - a development that tilted the scale in favor of the Allies, bringing the War to an end in 1918. In the following decades, USA would evolve into a formidable military and economic power, that would lead the democratic allies to become the second pole in the emerging bi-polar world.

The imperialist global order that existed since past couple of centuries, began to dismantle. Many colonies of European empires would get freedom. The British empire that was built in three centuries and covered almost one fourth of the world population and area before the War, would completely dismantle in the following three decades.

It took three decades for the new order to consolidate. The new order was characterized by UN, NATO, WARSAW, Mao, Israel, NAM, Bretton Woods, World Bank, Cold War, energy cartel (OPEC), et. al. The globalization that was a norm prior to the first War, was completely overpowered by the forces of nationalism and protectionism.

The new order lasted till the German Wall fell and USSR disintegrated. This unleashed a new wave of globalization. Global Trade (WTO), Internet, dematerialization of assets, Europe integration into a single market, China's entry into mainstream global trade (through WTO), free flow of capital, G-20, BRICS, numerous FTAs, global war on Islamic fundamentalism, energy security, climate control and global financial crisis, dominated this phase.

The recent events, especially in the past one year, give an impression that the extant global order may be crumbling under pressure, as the forces of nationalism and protectionism are rearing their head again.

There are two prominent debates that are currently going on.

The first debate seeks to challenge the very premise - "whether the current state of globalization is reversible at all?"

The second debate accepts the inevitability of the de-globalization, and is therefore focusing on the shape of the new order that would be emerging in next few years.

On previous occasion, when India was mostly a controlled and closed economy, we just suffered some collateral damage. This time our exposure to the global economy and geo-politics is little higher and deeper; and so would be the impact. I would like to share my views on this in a later post

Wednesday, January 11, 2017

Expect occasional "Attaboy" and few cookies

Thought for the day

"If I were running the world I would have it rain only between 2 and 5 a.m. Anyone who was out then ought to get wet."

—William Lyon Phelps (American, 1865-1943)

Word for the day

Etiolate (v)

To cause to become weakened or sickly; drain of color or vigor.

Malice towards none

RTI for BJP: How many BJP members have questioned the #Demonetization move?

If none, then the party is in serious need of introspection, as the very core of democracy may be weakening.

If there are voices of dissent, why don't people hear it?

First random thought this morning

Budget 2017: To promote investment and entrepreneurship, the government must introduce greater deal of predictability in policy and tax regime. It should definitely lay to the rest all scope for speculation about the policy matters.

One good beginning would be to irrevocably specify the treatment of capital gains on transfer of securities for next 10years, whatever it may be.

Expect occasional "Attaboy" and few cookies

The next two month are likely to be one of the most interesting phases in the global financial markets. The markets participants shall be keenly observing what the US president elect Donald Trump would say (won't say) or do (won't do) after his inauguration on the coming 19th January.

The participants shall also be keeping a close watch on the US Federal Reserve Chairperson Janet Yellen and Chinese leadership, especially the premier Li Keqiang.

It is widely expected that we may almost immediately see a trade war between US and China; build up of tension between White House and FOMC; rise in protectionism leading to disruption in global corporations; and realignment of US strategic partnerships. Drastic changes in policy towards foreign workers and capital flows are also feared.

The unusual personal bonhomie between President Trump and President Putin is also keeping the analysts busy.

A number of reputable experts have warned that a trade war with China could drag the world into 1930s' like severe recession.

FOMC meets on 31 January and 1st February and then again on 14-15 March. So far, the Chairperson Yellen has not been supportive of the fiscal profligacy proposed by the President Trump. A higher than warranted rate hike by Fed, could actually damage the fragile recovery US economy has witnessed in past 6 quarters. The bond market appears to be already factoring higher deficit, and hence higher yields in midterm.

A dramatic tightening of VISA rules and immigration policy, could hugely disrupt the businesses, especially the technology business that depends hugely on low cost skilled foreign workers and construction business that is supported by low cost foreign labor (including illegal immigrants). A temporary demand-supply mismatch in labor market, at a time when businesses will have incentive to relocate manufacturing to US, may lead to materially higher wages.

Intuitively, I am not losing my sleep over it, as of now.

In my view, a lot of Trump rhetoric may remain just that, rhetoric. Like Arvind Kejriwal, he will spend a better part of his 4yr term in managing the numerous conflicts of interests and personalities.

From India viewpoint, I feel - a US-China trade war could possibly benefit India, as Trump cannot expect to win this war without help from India, Russia, Japan, UK and many others.

A stronger USD, consequent to higher rates would eventually be deflationary, helping India on current account.

In his acceptance speech Trump, said if you are not with us, you are against us. We Indians are more than eager to be him. Expecting occasional "Attaboy", and few cookies would not be unreasonable.

In between, we have union budget for FY18 on February 01 and MPC, makes a monetary policy statement on February 08.

May also read:

"What Trump can do or cannot do"

"Why INR may remian resilient to the Trump Trade"

"US bonds: Possible long -term trend change"

Tuesday, January 10, 2017

Advantage BJP in UP

Thought for the day

"The belief that youth is the happiest time of life is founded on a fallacy. The happiest person is the person who thinks the most interesting thoughts, and we grow happier as we grow older."

—William Lyon Phelps (American, 1865-1943)

Word for the day

Fallal (n)

A bit of finery; a showy article of dress.

Malice towards none

In his attire, PM emulates the popular leaders like Jawaharlal Nehru and Indira Gandhi and not the great leaders like Gandhi, Shastri and JP.

Surely, he will be mentioned in the history books as a great prime minister who changed the course of economic policy and foreign policy of India. But not as a leader who was venerated by 125cr Indians.

But who cares!

First random thought this morning

Budget 2017: Under the given circumstances, the government could take either of two approaches in the forthcoming budget:

(a) Give a big dose of steroid to abate the pain caused by the currency ban in an already slowing economy.

(b) Inflict a bigger pain, so that people forget the pain caused by the currency ban.

Advantage BJP in UP

The general elections in India are famously projected as the final match of a tournament, in which many semi-finals are played. The strange part is that most of these semi-finals are inconsequential for the final match.

One such semi-final for the final match schedule to be played in summer of 2019, is going to start soon. In this five game match, the game to be played in Lucknow is being cited as the most important. The popular projection is that the winner in Lucknow game will be the favorite to win 2019 final. There is though little empirical evidence to substantiate this claim. In past three decades in particular, the results of the Lucknow game were mostly inconsequential for the subsequent finals in New Delhi.

In my view, the semi-finals to be played later this year in Gandhi Nagar, and next year in Bhopal and Raipur would be more interesting and relevant for the 2019 finals.

Anyways, since the Lucknow game is trending these day, it is better that I talk about that game only.

I visited the battlefield UP during my year end break. Incidentally, this was the time when the team currently holding the title (Samajwadi Party or SP) announced major injuries.

While driving through the vast expanse of the state glittering with the golden mustard flowers, I met many people, observed a lot things and formed some opinions. I may share some of the key observations and opinion with the readers.

Politics

1. The political consciousness of the people of Uttar Pradesh, has evolved materially in past one decade. Contrary to the popular narrative, the caste and religion, though still relevant, are not the primary considerations in the voters' mind. Nowhere, the voters are inclined to elect a candidate purely on the basis of caste or religion.

2. SP has been successful in projecting a strong personal identity of the CM Akhilesh Yadav, as distinct from the traditional caste-religion based political identity of Mulayam Singh Yadav and his brothers. BSP chief Mayawati has mostly failed in getting out of the old caste-religion paradigm. Rahul Gandhi led Congress continues to be as confused as ever. BJP is going into the fray hiding behind Pm Modi mask.

3 It is clear that the main contest is between Akhilesh Yadav led SP and PM Modi motivated BJP. A Congress and BSP alliance could add a third dimension to the contest, but such alliance would not be in contention. The only positive in favor of BSP is the better law and order record of previous BSP government.

4. In the last elections, the principle opposition SP had set the agenda and all other parties just responded to it. This time agenda has been set by PM Modi himself. Financial inclusion, compliance and fight against corruption is the primary agenda, with the usual development plank providing an active sub-plot.

5. I observed good support for PM Modi amongst the youth, in the Yadav majority areas of Central UP; women in the BSP's stronghold areas in Bundelkhand and Rohillkhand and Congress pocket Burroughs of Amethi, Sultanpur and Rai Bareilly. Leaders like Uma Bharti, Smriti Irani (surprise!), Rajnath Singh, Kalyan Singh are known and remembered. Atal Bihari Vajpayee continues to be popular, especially amongst minorities. Amit Shah is unpopular with the locals. Like 2014 general elections, RSS is working overtime in these elections, unlike the 2012 assembly elections.

6. Mayawati appears losing support amongst her core dalit support group, especially young women.

Economy

1. The economy of the state is tough to understand. The trade and industry (except sugar) are generally stressed, like in other states. The rural sector does not appear buoyant either. But that might have something to do with recent factors like poor realization of potato crop; poor quality of cane crop and less than expected rise in cane support price. Otherwise, rural populace appears satisfied with the development on the front of electricity, road connectivity, primary education, government support for old, girls, and minorities. This is visible in stable public and private sector consumption.

2. Employment condition continues to be poor. The tendency to migrate is rising much faster amongst the educated.

3. The currency ban has been mostly forgotten and forgiven, except by traders. There is little impact on the farm sector, but trade is hurting badly.

4. Real estate sector in the state is in distress. But it has more to do with the excessive rise in prices and euphoria during 2007-2010 phase, and less with the change in normalized demand. The urbanization is progressing well and demand for housing remains good, especially in urban areas. The lower interest rates are seen helping the demand further.

Society

1. The social divide on religious lines has strengthened in past few years.

2. The social divide on caste line is weakening.

3. Contrary to the popular perception, the social divide appears stronger in urban areas, as compared to rural areas. College going youth appears to be in favor of discrimination on the basis of religion.

To sum up, though it is still early days, I would give my customary assessment of the election outcome.

In my view BJP will emerge as the single largest party, if Congress allies with SP or BSP. Otherwise, BJP is poised to get a strong majority on its own.

Friday, December 23, 2016

Can't stop an idea whose time has come

Thought for the day

"Then not only an old man, but also a drunkard, becomes a second time a child."

—Plato (Greek, 427-347BC)

Word for the day

Genuflect (v)

To express a servile attitude.

Malice towards none

Hurricane RaGa has now been downgraded from level 5 to level 0.

First random thought this morning

We have adopted a lot many things from the Europe and US in past one century - ranging from constitution, administration practices, language, food, fashion, TV shows, technology, education system, legal system, architecture, system of medicine, accounting practices, taxation practices, profligacy, violence, and intolerance to music, art, movie plots etc.

Many of these imports violate the conventional concept of Indianness, and many have since been abandoned by the originators themselves.

Our exports to the western cultures include yoga, spirituality, classical dance & music, food, tolerance, non violence, frugality, and altruism.

This trade deficit is blunderous, just like the proverbial gorilla in the room that no one is talking about.

Can't stop an idea whose time has come

Pursuant to my request yesterday (see here), I have received a number of suggestions as to the topics I should be delving upon while formulating my investment strategy for next year or so.

Not surprisingly, most of the people want to know my views on the likely impact of 'Demonetization', 'GST', and 'Trumponomics' on the investment strategy of an Indian investor. Some have asked for stocks ideas to implement the changes in the strategy.

I would like to make it very clear, that in my firm opinion, all these ideas are popular today just because their time has come and not for any other reason. These are culmination of a long drawn process involving a number of socio-economic and political changes. Most investment strategies in fact are already oriented to assume the full implementation of these events.

Any businessman in India would tell you that ever since global financial crisis of 2008-09 (GFC) there has been a concerted effort on part of the government, enforcement agencies and regulators to check money laundering and accumulation of black money. Holding large sum of cash had become seriously difficult for past many years.

In last 3-4years particularly, a number of steps have been taken to curb generation of black money. Fraudulent agriculture income (e.g., Himachal CM Birbhadra Singh); fraudulent real estate deals (e.g., Robert Vadra deals) and regulation of real estate sector; Hawala deals (HSBC Swiss account disclosures, taxation of Vodafone deal, revision of Mauritius and Cyprus treaties; transparency in Defense and Railway purchases; regulation of bullion transactions through TDS and excise duty; AIR for transactions exceeding Rs10lacs; information sharing deals with foreign regulators; curbing of money laundering through fraudulent long term capital gain in penny stocks; FATCA disclosures; etc. are just a few of the steps taken to achieve the objective.

Abolition of high denomination currency notes is certainly a step with widest possible repercussions. But it is in no way the first or the last step in the process. It is a step whose time has just come.

After living with a fractured political mandate for most part of last three decades, we had been consistently witnessing clear and full mandates for past few years. BJP as a political party is ruling in over half the country, and this is what makes it the most appropriate time to implement GST.

The economy is definitely headed towards a more organized and structured business environment in the coming decade or so. The businesses mostly based on tax arbitrage (or evasion) opportunities and non-compliance are going to get extinct in next one decade. That has been my strategy for past couple of years and would continue to be so.

Insofar as Trumponomics is concerned, I believe people are bored from eight of status quo and want a change. They have got the change and are obviously excited. I am too naive to judge the impact on global economics and politics just as now. But the itch to make a guess is certainly there....more next week.

Thursday, December 22, 2016

Driven by hope, lacking in optimism

Thought for the day

" Honesty is for the most part less profitable than dishonesty"

—Plato (Greek, 427-347BC)

Word for the day

Humbuggery (n)

Pretense; sham

Malice towards none

I am no big fan of either Saif or Kareena.

The young Taimur has so far done nothing to draw my notice.

First random thought this morning

All of you must have seen students who are not confident of what they have learned in the past many months, and want to revise the entire syllabus just minutes before entering the examination hall. I have even heard some parents complaining that their ward could not do well in exams because he/she woke up late on the exam day and could not revise the notes just before the exams.

The CMs and other senior government functionaries of the five states where polls are likely to be held in next few months these states are behaving just like these students. In just two months, they want to make their respective states look developed, people friendly, business friendly, safe, best place to live for minority communities & the backwards, and much more.

Driven by hope, lacking in optimism

As the 2016th year of Christ draws to a close, it's again time for reflection, reassessment, and restrategizing for investors.

Despite a setback in 4Q2016, the year has been largely satisfactory for Indian investors.

While the benchmark indices are almost unchanged for the year, diversified equity portfolios have yielded 6 to 10% return for the calendar year. The return in hybrid funds has been better in 9-11% range as the fall in bond yields led to outperformance of bond funds which yielded 12-15%.

In other asset classes, global commodities have done really well with crude gaining over 50%, and industrial metals and coal gaining from 15-70% during the year. Despite sharp fall in last couple of months, precious metals are also higher by 7-11% yoy.

Real estate has seen a mixed trend this year. While the housing prices have remain mostly subdued, the commercial and retail assets have seen a revival in many markets.

Standing at the doorsteps of the new year 2017, however, the investors are a worried lot. The optimism seen since March of 2016 is nowhere to be seen.

The fear of unknown is inarguably the dominant sentiment. The impact if changes in US and European politics on global economics and markets is not known yet. But most forecasts are hinting at acceleration in popularity of nationalist agenda against the globalization.

A careful reading of the past few statements of many large central bankers highlights their frustration with the current "new normal" and "whatever it takes" stance, that has been the hallmark of their policy since 2009. US federal reserve has made a beginning to normalize the unconventional zero rate policy. ECB and BoJ too seem to be willing, circumstances permitting. 2017 will be keenly watched for any "disorderly normalization" of the extant policy stance of many central bankers.

So far, most positive statements from market experts, appear based more on hope rather than optimism. The slight tremor in the voice and worries hidden between forehead wrinkles though evidently belies the conviction.

I do unconditionally believe in what Andy said to Red in Shawshank Redemption (1994) "Remember, Red, hope is a good thing, maybe the best of things. And no good thing ever dies". I personally therefore do not mind driving into 2017 with a tank-full of hope. Though I would keep the seatbelt tightly fastened, speed well within limits, and be mostly driving in slow lane.

Next week, I will be sharing my views on investment strategy for 2017 and beyond with the readers.

Would be glad to receive suggestions as to what specific points I should be dealing in my strategy write up. Thanks!

Wednesday, December 21, 2016

In search of solutions - 12

Thought for the day

"The community which has neither poverty nor riches will always have the noblest principles."

—Plato (Greek, 427-347BC)

Word for the day

Cordate (adj)

Heart-shaped, e.g., a cordate shell.

Malice towards none

Heard RaGa speech in Jaunpur on Moday.

Not a grain of truth.

Wonder who is the King Liar who writes his speeches.

First random thought this morning

Flipkart, SnapDeal, PayTM, Ola and sundries are poor versions of Amazon, PayPal, Uber etc. just the way KBC, Indian Idol, Voice of India, Big Boss etc. are poor copies of the similar American TV reality shows.

A large part of our whole start-up ecosystem distressingly appears to be based on the business models and ideas conceived, tested, and already commercially exploited in other parts of the world.

Respect for IPR and innovation is amongst the few things still missing from the picture.

In search of solutions - 12

At the risk of sounding irritatingly repetitive, I would like reiterate that in past 6 decades we have focused too much on our weaknesses and tried hard to overcome by importing technology, energy, intellectual property, capital and consumption patterns. The root cause of many economic problems, e.g., current account deficit, fiscal deficit, energy deficiency, excessive dependence on external IPR & capital flows, etc. could be traced to this misplaced focus.

In my view, just by focusing on our intrinsic strengths, we can not only conveniently reverse the flow of trade to pre British era but also be successful in achieving our secular goals of sustainable and faster economic growth.

For example, the following programs, if implemented earnestly, could improve the balance of payment and employment conditions, substantially and structurally by 2025 by focusing on our intrinsic strengths like abundant sun shine, large number of middle class youth, amazing landscape, strong and rich tradition (food, religion, etc.) & culture (music, dance, arts, festivals):

(a) Indians spend more than $25bn annually on education and related overseas travel. Creating 5 Special Education Zones (SEZ) with liberal VISA, forex, taxation and real estate ownership rules, and allowing foreign institutions to freely set up campuses in these zones, could potentially reverse this flow. Students from India, far-east, middle-east and Africa who find it difficult to get VISA for US/UK etc., or find that unaffordable, could also benefit from this. Our politicians have spoken about recreating Nalanda and Takshila. This in my view is the easiest way to do that.

(b) India holds tremendous potential for tourism. However lack of proper infrastructure has traditionally constricted the growth of this sector. On the other hand Indian outbound tourists flow is rising fast. Developing some world class self-contained international tourism centers, e.g., on lines of Macau, Disney, Las Vegas, etc. with liberal VISA, Forex, taxation and real estate ownership rules could potentially reverse these flows.

(c) Vindavan, Tirupati, Varanasi, Gaya, etc. all have potential to be as desirable, venerable and popular destinations as Mecca, Vatican and Jerusalem. Converting these centers of Indian religion and culture into self contained special zones with international airport, adequate lodging facilities and annual event calendar could get substantial forex revenue.

(d) Including sports, music & dance, arts in the main curriculums upto secondary school level, with adequate focus, could annually produce 10x more (self) employable students than 500 higher institution of learnings would do in next two decades,

These projects also have the potential to generate large scale productive employment opportunity for local talent, besides contributing to economic growth and true globalization of Indian economy.

Tuesday, December 20, 2016

In search of solutions - 11

Thought for the day

"No one ever teaches well who wants to teach, or governs well who wants to govern."

—Plato (Greek, 427-347BC)

Word for the day

Ignominy (n)

Disgrace; dishonor; public contempt.

Malice towards none

Santa: I know the prime minister.

Banta: I know the cashier of SBI branch in market.

Santa: Wow, you are so lucky!

First random thought this morning

The pace at which the focus of public discourse is shifting from one "burning issue" to another "burning issue" is perplexing. Sometimes it seems our society and country actually do not have a problem to earnestly worry about.

In search of solutions - 11

The young demography is inarguably the core strength of the Indian economy. My concern is that, if not managed properly this may as well prove to be the nemesis of the fabled India story.

We must accept that despite being one of the fastest growing economies in the world during past decade, we have utterly failed in creating adequate number of productive jobs for the burgeoning workforce. MNREGA has helped to some extent, but it is bound by fiscal constraints, leakages and lower productivity. Besides, disguised/underemployment continue to characterize the India's occupation structure; perennially impacting the productivity and earnings potential.

I have been highlighting that the vast reservoir of youth energy on which Indian economy is sitting presently, could potentially explode if not channelized appropriately. It is therefore extremely critical to evolve an integrated youth policy that include mission scale programs to educate and skill the youth, inculcate enterprise skills in them from early stages, enable them to engage in productive self employment, deal empathetically with their concerns, anguish, frustration and disillusionment.

The following is the minimum that needs to be urgently implemented, I feel:

(a) Overhaul education system to make it job oriented. Inculcate enterprising skills in students from primary level. It is high time that we do some zero base planning regarding our education rather than just incremental tinkering. Post middle (8^th standard) job oriented education, training and skilling programs should be made more popular with active participation of industry. RTE should be amended to provide for a Uniform and Standard education to all the children. Bringing social changes like “respect for work” would be quintessential to this.

(b) The trained and skilled youth should be adequately supported and enabled to engage in productive self employment. The present model of MSME promotion may not be adequate to create massive employment needed, as this model may not be competitive in the emerging scenario where the Indian industry will have to increasingly compete with large global players. Co-operation movement in industry on the lines of AMUL where a large number of trained youth can create, own and profitably manage large globally competitive enterprise should be promoted and encouraged. Giving equity in natural resources to local population would be quintessential to this.

(c) Agriculture and allied activities are still at the core of Indian socio-economic structure. Promoting collective and commercial farming would add significant employment opportunity with better earnings potential.

(d) Success of IPL has suggested that sports can potentially generate large scale employment opportunity if managed in industry like manner.

(e) Last but not the least police reforms are absolutely necessary to manage the agitated & disillusioned youth compassionately and ensuring that they do not stray into prohibited territory of violence and sedition...to continue