Vijay Kumar Gaba

Friday, August 22, 2014

Problem of plenty - II

Thought for the day

”Half of the harm that is done in this world is due to people who want to feel important. They don't mean to do harm. But the harm does not interest them. "

- T. S. Elliot (American 1888-1965)

Word for the day

Plaudit (n)

Enthusiastic approval; an expression of praise.

(Source: Dictionary.com)

Teaser for the day

Congress J&K leaders seeks Hindu CM for the state.

Congress CM declare PM untouchable by refusing to share dais with him.

Is this the Antony formula for resurrection of Congress Party?

Problem of plenty - II

As per NSSO report^{^[1]} on the status of employment in India, "he population in the age group 15-59 years, which is considered to be economically active, comprised about 60 per cent of males and 61 per cent of females in rural areas and about 66 per cent each of males and females in urban areas."

However, only about 40 per cent of population participated in the labor force, meaning offered themselves for work. Participation was significantly lower for females than for males in both rural and urban areas.

A large majority (52%) of the workers are engaged in self-employment. Moreover, about one third of workers were under casual labour category. Only 18% were found to be regular salary/wage earners. The share of casual labour in the total workforce of rural areas was about 35 per cent as against the corresponding share of 15 per cent in the urban areas.

This in my view is an alarming situation. Most of the self employed people are either underemployed or employed in disguise, both in urban and rural area. A stroll across the street or any market area would show you a large number of youth pretending to engage in petty jobs as laborer and hawker etc., who work and earn much lower than potential.

All those who vehemently opposed the FDI in multibrand retail trade in the Parliament, need to go an ask a person who runs a 24*7 daily neighborhood Khomcha, how much he earns after working 17-18hrs a day.

My enquiries suggests it is much lower than what a counter boy at Big Bazaar earns, in a 10hr shift, in a dignified, secure, and air conditioned environment with no investment risk and without any botheration about the municipal raids.

I have met many fruit and vegetable hawkers in past couple of years in connection with my NGO work. More than one quarter of them cannot afford to send their kids to even government schools who do not charge any fee.

Moreover, overall 49% of all participating workers were engaged in agriculture activities. For female workers the ratio was substantially higher at 63%. A large majority of these workers are self employed with no financial or social security. These are also unemployed or underemployed for a large part of the year.

To harness the potential of Indian youth demographics, it is therefore essential that an integrated approach is adopted to increase employability, employment and productivity level.

Political bickering or prejudices notwithstanding, a serious relook is needed on issues like land reforms, labor mobility, labor laws, skill development, gender equality, integrated rural development, cottage industry, MSME sector, technology innovation and business facilitation.

The new government has made many positive statements in this regard. I hope to implementation of these ideas in next few years.

[1] 68th Round Survey (June 2011-June 2012) published in June 2013.

Wednesday, August 20, 2014

Problem of plenty - I

Thought for the day

”Business today consists in persuading crowds."

- T. S. Elliot (American 1888-1965)

Word for the day

Execrable (adj)

Deserving to be execrated; detestable; abominable; extremely bad; of very poor quality; very inferior.

(Source: Dictionary.com)

Teaser for the day

UP, Uttrakhand, Bihar, Assam, Odisha and Himachal Pradesh suffering from serious floods.

All 6 are non-BJP rules states.

Wonder why no one has sensed a conspiracy in this!

Problem of plenty - I

The India story is largely about ‘demographics’ and ‘sociopolitical transformation’. Economic growth is a by-product and hence more predictable.

The young demography is one of the major strengths of Indian economy. This is such a consensus view that it almost sounds cliché to mention it in an argument.

Nevertheless, young demography is a huge "potential" advantage for Indian economy, but currently this potential has so far not been exploited adequately. This failure in exploiting the youth energy to its full potential is primary problem ailing Indian economy at this point in time, in my view.

I see it as failure of planning process inasmuch as lower priority has been accorded to (a) enhancing employability of young population; (b) creation of adequate number of employment opportunities and (c) developing an integrated approach to plan and monitor mobility of workforce to balance regional skew in population.

Consequently, it is common to find shortage of skilled, semi skilled and even unskilled labor in high demand industrially developed regions of the country. Whereas a large number of people remain unemployed, underemployed or disguisedly employed in less developed areas.

Even in skilled and semi-skilled labor category serious imbalances have been observed. I have observed that a few disciplines have witnessed oversupply of labor, whereas many other disciplines face perennial shortages. This might have also caused discrepancies in the remuneration structure over a period of time.

...to continue tomorrow

Tuesday, August 19, 2014

Let the patient be cured first

Thought for the day

”We shall not cease from exploration, and the end of all our exploring will be to arrive where we started and know the place for the first time."

- T. S. Elliot (American 1888-1965)

Word for the day

Fink (v)

To inform to the police; squeal.;

(Source: Dictionary.com)

Teaser for the day

You cannot take away my right to preach morality, even if I am stuck in 300BC.

You are free to disagree, ignore, ridicule, or contradict me.

But for God sake do not gag me or paint me a criminal.

Let the patient be cured first

Once a patient was admitted to an upscale private hospital with a serious heart condition.

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 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.

The doctors there studied the case history and discovered that the patient's condition was accurately diagnosed by the previous hospital 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 first hospital.

The doctors and management of the first hospital accused the second hospital of unethical practice and incompetence, charging them with appropriating their diagnosis and following the same line of treatment as they had suggested.

Somewhat similar is the situation of UPA (the first hospital), NDA (the second hospital) and the Indian economy (the patient).

In the meanwhile some vital signs of the patient have shown improvement, since moving to the NDA hospital. I'm not sure whether it is effect of the treatment afforded at the UPA hospital or at the latest hospital. Nevertheless, as one close relative of the patient, I hope NDA doctors and management would take care of the patient well and follow the correct line of treatment that would cause least pain and cost us minimum.

In next few days, I shall discuss what's ailing the economy and what should be the ideal line of treatment in my view.

Friday, August 15, 2014

The Big Bang Theory

A quick post PM's independence speech telephonic survey of some market participants finds a large majority confused.

All of them are deeply impressed by the high emotional quotient, commitment and nationalistic fervor of the speech. However, many of them sounded disappointed by lack of specific project and scheme announcements that can boost the market Monday morning.

We, for the record, are deeply impressed by the tone, tenor and contents of the PM's speech. The speech encourages us to increase our bets on Indian economy.

We heard many Big Bang announcements in the speech, which many market participants perhaps would notice in the months to come. Specifically, we would like to highlights the following:

(a) For the first time since Lal Bahadur Shastri, a PM has underplayed the role of the government and highlighted the role and responsibilities of citizens in building a progressive society. PM rightly pointed out that all 1.25bn Indians need to contribute in nation building and the government will only play the role of a constructive facilitator and coordinator with compassion.

(b) The PM emphasized the importance of quality and sustainability in the process of growth and development.

(c) Emphasis on building strong national character through commitment to cleanliness, social harmony, peace, socio-economic equality is also first.

(d) Commitment to restoration of true federal structure of government, that got lost in the personal ambition and insecurities of Mrs. Indira Gandhi, may pave way for the balanced, equitable and sustainable growth of the country.

(e) Emphasis on protection of personal dignity of all citizens as guaranteed by the constitution may help restoring the faith in Nation State and thus enhance the compliance level.

(f) Engaging all elected representatives in the nation building process will help ease the power struggle, corruption, and encourage healthy competition amongst legislatures and local communities. Through model village schemes (Smart villages with urban civic amenities) all elected representatives will have an opportunity to demonstrate their organizing, project management and development capabilities and will be able to rise in national hierarchy. Each of them will have a project named after them as legacy to show case (so far domain of a few families).

Insofar as financial markets are concerned, we believe that the PM has just announced seriously big bang structural changes in the whole economic paradigm. For example,

(1) In our view, the new manufacturing policy is on the anvil that would enable India become an important international manufacturing hub. "Make in India" mission shall see far reaching changes in SEZ policy, FDI rules, taxation policy, land acquisition policy, and sustainability rules.

(2) The disbanding of central planning commission shall strengthen the federal structure. Deeper center-state cooperation will improve execution and bridge the trust deficit. Estimates suggest huge savings could be achieved by removing redundancies through combining state and center welfare schemes.

(3) A common SAARC trade area could bring serious benefits to many industries.

(4) Development of MSMEs with focus on quality, sustainability and import substitution is a noble thought.

(5) Massive financial inclusion scheme is aimed at eliminating exploitation of poor and leakages in delivery of government assistance.

The last but not the least, by not referring to the menace of corruption even once in his 64min speech, PM has highlighted total confidence in his team and his ability in making it a non-issue sooner than later.

It is also a matter of comfort and delight for us that many of our suggestions have found place in PM's speech. In particular the following:

8 things I wish to hear from PM tomorrow

Raise the Bar

Regards a very Happy Independence Day to all our readers.

Thursday, August 14, 2014

8 things I wish to hear from PM tomorrow

Thought for the day

”Life does not agree with philosophy: There is no happiness that is not idleness, and only what is useless is pleasurable.”

- Anton Chekhov (Russian, 1860-1904)

Word for the day

Brusque (n)

Abrupt in manner; blunt;

(Source: Dictionary.com)

Teaser for the day

All those who believed in Modi's magic wand are already busy doing a reality check.

8 things I wish to hear from PM tomorrow

Many media reports are suggesting that the participants in the financial markets are already disappointed with the performance of Modi government. Most of them are keenly looking forward to PM's ceremonial independence speech to find a straw to which they can cling on for some more time. I feel they will be even more disappointed by the noon of Friday.

I appreciate that this ceremonial speech is not an occasion to please the financial markets. This should rather be used to bolster the morale of the common citizen and reignite their faith in the country and her democratic traditions.

I believe that in today's context a stronger economy is more a function of healthy, competent, committed and aware citizenry than a function of other economic resources.

I therefore wish to hear the following announcement from Red Fort.

1. National Cleanliness Mission - to make the country clean, health and beautiful

If necessary legally mandate people to keep their surroundings clean.

2. National Quality Mission - to make Quality a mindset.

‘Jugaad’ in economic field is as dangerous as in personal (like self medication) and political (caste and religion based politics, adhocism in key socio-economic policies etc.) The ‘jugaad’ mindset has perennially pushed back India and Indians tenaciously into survival mode, preventing development of a strong foundation for economic growth and prosperity.

3. Right to Uniform Education - Make it the basis of Constitutional guarantee of right to equality.

4. 100% tolerance to right to freedom of expression.

PM should tell the nation that in view of the government and law - the God, all deities, languages, and national symbols like flag and anthem are supreme and beyond respect, insult or belittlement by any individuals. These could only be voluntarily revered. There should not be any objection from anyone if someone chooses not to revere these.

5. Zero tolerance to crimes like adulteration, ponzi schemes, money laundering, crime against women and economic and social exploitation of underprivileged.

6. National Owner-Entrepreneur Cooperative Movement

Grant beneficial ownership of the land & minerals to local people and encourage a cooperative movement in industry and land development.

7. National Police Reform Mission

8. National pay-back policy

All those using national resources like natural resources and subsidies, etc. for commercial purposes need to pay back in equal measures.

If to someone I am sounding Maoist, let me clarify "I am not".

Wednesday, August 13, 2014

Declare 15th August 2014 as Swaraj Day

Thought for the day

”People don't notice whether it's winter or summer when they're happy.”

- Anton Chekhov (Russian, 1860-1904)

Word for the day

Cat's-paw (n)

Person used to serve the purposes of another; tool.

(Source: Dictionary.com)

Teaser for the day

Does Congress realizes that if it losses Haryana, J&K, Kerala, Assam, and Maharashtra in next couple of years, by 2017 it may be a small minority in Rajya Sabha too?

Wonder, what's plan!

Declare 15th August 2014 as Swaraj Day

I have been highlighting since ever that one of the best things India has got in past 150years is Mahatma Gandhi. And the most unfortunate thing to occur since independence from British rule in 1947 is brazen desertion of Mahatma Gandhi by Indian politicians. To my mind hanging his pictures in government offices or currency notes and naming roads after him is even more contemptuous given the complete ignominy for his principles and ideas.

I would like PM Narendra Modi to undo this blunder on this independence day. I could dare hope so because PM has shown strong commitment to many Gandhian ideals, e.g., Swaraj, Antodaya (elevation of the poorest amongst poor), self-reliance, cleanliness, etc.

Mahatma Gandhi had once said “Independence begins at the bottom. A society must be built in which every village has to be self sustained and capable of managing its own affairs. It will be trained and prepared to perish in the attempt to defend itself against any onslaught from without. This does not exclude dependence on and willing help from neighbours or from the world. It will be a free and voluntary play of mutual forces. In this structure composed of innumerable villages, there will be ever widening, never ascending circles.

Growth will not be a pyramid with the apex sustained by the bottom. But it will be an oceanic circle whose center will be the individual. Therefore the outermost circumference will not wield power to crush the inner circle but will give strength to all within and derive its own strength from it.”

Thus, the individual is the sole basis of Swaraj. Swaraj is unfathomable without dispassionate self-assessment, ceaseless self-purification and growing self-reliance at individual level; and sovereignty of moral authority, as against the political authority.

Swaraj encompasses fiercely competitive free market, moral duty to be free, fearless, truthful, fair, just, self reliant, nationalist, and religious.

In my view, religious fundamentalism, usually referred to as “communalism” in Indian context, is mostly a political problem in India. A secular political system, as envisaged by Mahatma Gandhi and incorporated in the soul of our Constitution, would automatically weaken these miniscule elements leading to their eventual extinction.

To end this political farce that has indubitably harmed Indian economy and society more than anything else, Narendra Modi should declare, in as many words without any ambiguity, from the ramparts of Red Fort, his allegiance to the idea of secularism as enshrined in the Constitution of India.

Despite several movements and legislations, women in India continue to suffer serious injustice and disparities. The feudal mindset towards women need to transform, if we want India to become a world power. This would require a mass movement. Mere legislations would not do.

...to continue tomorrow

Tuesday, August 12, 2014

Expect little economics at Red Fort

Thought for the day

”Let us learn to appreciate there will be times when the trees will be bare, and look forward to the time when we may pick the fruit.”

- Anton Chekhov (Russian, 1860-1904)

Word for the day

Equanimity (n)

Mental or emotional stability or composure, especially under tension or strain.

(Source: Dictionary.com)

Teaser for the day

Who do we honor by coffering Bharat Ratna, Padma Awards, and gallantry awards -

(a) The country - for having great/brave people; or

(b) The person - for being great/brave; or

(c) The award itself for embracing a great/brave person; or

(d) All of the above?

Expect little economics at Red Fort

If my memory is not failing me, in past two decades the Prime Minister's independence day speech has never been awaited in Mumbai with so much anticipation.

The underprivileged from the relatively less developed parts of the country have always looked forward to the occasion in hope of some new welfare schemes and extension of reservation quota to cover more areas/people.

However, middle classes mostly lost interest in the event from the beginning of the Mandal Era in late 1980s'. Businessmen, industrialist and the participants in financial markets have mostly heard the speech to fish out negatives in terms of rising pressure on fiscal deficit and rhetoric towards neighboring countries creating avoidable tension.

This time however it is different. All are keenly anticipating a historic speech from the ramparts of the historic Red Fort. The reasons are many and varied.

The most common being, Narendra Modi led BJP's election campaign had raised the vertical limits of people's expectations by a good measure. The boring long budget speech of Arun Jaitley mostly failed to match the elevated expectation level. People are now expecting the independence speech to supplement the void left in the budget provisions.

On a lighter note, after a decade we will have a proven good orator delivering a speech against reading a speech.

Narendra Modi unambiguously reiterated at BJP's national council meet last week that the primary focus of his government is the poorest amongst the poor. It is of utmost interest to economists and financial experts how his government would achieve the elusive equilibrium between often conflicting goals of fiscal discipline, higher headline economic growth, large scale job creation, price stabilization, social justice, etc.

The government's likely Rajya Sabha strategy has also assumed significance in view of the opposition to the Insurance Bill. People are also expecting some hints on the solution to this issue also.

So far, BJP leaders have avoided references to the traditional cultural nationalism agenda in their public utterances. Modi's opponents, within and outside NDA are frustratingly looking for some hints of this to hit back at Modi, who has emerged as a rather exacting leader of the government.

A section of media, especially English print and electronic media, appears suffering from serious sense of guilt post elections. This section of media had chastised Narendra Modi since 2002 and strongly ruled out chances of his becoming prime minister. Post election results this section of media (whom Modi likes to call "News Traders") has been frequently raking up trivial issues to show their displeasure. They will be keen to find some holes PM's speech.

I will also be turning on my TV set early in the morning to hear Mr. Modi. I am not expecting to hear much on the economic agenda of the government. I would hate to hear Congress bashing or customary warning to neighbors.

Tomorrow I would list what I would like to hear from Mr. Modi on this independence day.