Friday, August 19, 2011

My response on Nilekani interview in CNN-IBN about protest for Jan Lokpal Bill

This post is in response to the interview of Nandan Nilekani available at :

Hmm….Frankly, I am not competent enough to argue with someone of Nandan’s stature (as per my expectations). But then, there are some things, which are part of what he said and they are the ones which might be fuelling the protests.
  1. I firmly agree that corruption needs a holistic approach for prevention and/or at maximum removal (I strongly believe it cannot be eradicated fully). This holistic approach does not end with passage of Jan Lokpal bill. Frankly speaking, it does not even start with drafting of the Jan Lokpal bill. There are so many things in daily life that many of us do some mistakes, have to pay fine and look for opportunities to reduce that fine part. This is where the feeding part of the Corruption starts. Unfortunately, the Aadhar card cannot make files move in a public office. The Jan Lokpal bill is to ensure that if we don’t want to be the feeders and are still being forced to, then we have someone to provide an arm to lean on. Say it…get the extortion part out. It’s to ensure that people with responsible public roles, do not succumb to various tendencies. It can ensure that so many laws our parliament passes are adhered to. If not adhered to, why to have laws.
  2. But when you want to ensure something, something people can take help of, obviously you want that helping hand to be available. That “availability” factor is very important. A system (software or otherwise) may be an excellent one, but if not available when required, I will term it “flash in the pan” one. The Jan Lokpal bill has better way of handling that availability factor. As has been correctly pointed out by Nandan sir, the middle class is most affected a lot of corruption. And where does the middle class get in touch with corruption, and its flag bearers…..when they want certain essentials services to be available….health, public infrastructure, law and order (not including the investigation part) and local administration (for various essential licenses). If these essential services were provided in timely, user-friendly manner, I bet that you definitely would not have seen so many people on the road. The agitation would have been an “uncalled for”. Leaving the user-friendly part still to the Executive, the Jan Lokpal bill ensures the “timeliness” part is taken care with each public office having a citizens charter enlisting SLAs for each thing, including penalties if not done.
  3. I feel good that Nandan also agrees that Lokpal is part of those 10-15 things we need to do for handling corruption. When we have decided that a Lokpal is required, why not have one which is better of the solutions on the plate. In the future, if we have better solutions, we can do amendments. In regard to his point that a Lokpal bill is before standing committee, and what is the need to argue. I sympathize with our politicians and amount of time they put in for real public life. When something is being discussed, why not put before the standing committee, and the both houses of the parliament the other one also. If the standing committee and houses of the parliament do not want to take up suggestions of the Jan Lokpal bill, Ok fine. But then even not putting the valid points of the Jan Lokpal bill forward for discussions is the point which is inappropriate.
  4. If you have a Venn diagram for corrupted people, there are many from legislative, judiciary and executive, who will fall into the other circle (of non-corrupt). But then making the other circle populous is the main intention.
I have put forth some of the points from my own knowledge.

And last but not least, this mail is only to share my viewpoint.

Friday, October 17, 2008

Global Meltdown ... How does it happens.....

Here is nice article I found somewhere on the net describing the current economic scenario. Read it even if you dont know crap about markets :

Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.

(1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.

(2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owns a piece of land that is worth 1 dollar.

* The net asset of the country now = 3 dollars.

(3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.

* A has a loan to C of 1 dollar, so his net asset is 1 dollar.
* B
sold his land and got 2 dollars, so his net asset is 2 dollars.
* C
owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
Thus, the net asset of the country = 4 dollars.

(4) A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, A now owns a piece of land that is worth 3 dollars. But since he owes B 2 dollars, his net asset is 1 dollar.

* B loaned 2 dollars to A. So his net asset is 2 dollars.
* C
now has the 2 coins. His net asset is also 2 dollars.
The net asset of the country = 5 dollars. A bubble is building up.

(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2 dollars from C, and cancellation of his 2 dollars loan to A.

* As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
* B
owns a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.
* C
loaned 2 dollars to B, so his net asset is 2 dollars.

* The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.

(6) Everybody has made money and everybody felt happy and prosperous.

(7) One day an evil wind blew, and an evil thought came to C's mind. "Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more."

(8) A also thought the same way.

(9) Nobody wanted to buy land anymore.

* So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
* B owes 2 dollars to C and the land he owns which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.
* C
has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his heart is palpitating.
The net asset of the country = 3 dollars again.

(10) So, who has stolen the 3 dollars from the country? Of course, before the bubble burst B thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B's net asset is still 2 dollars, his heart is palpitating.

(11) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1 dollar now.

* A owns the 2 coins; his net asset is 2 dollars.

* B is bankrupt; his net asset is 0 dollar. (He lost everything)
* C
got no choice but end up with a land worth only 1 dollar

* the net asset of the country = 3 dollars.

—————End of the story; BUT—————

There is however a redistribution of wealth.

is the winner, B is the loser, C is lucky that he is spared.

A few points worth noting –

(1) When a bubble is building up, the debt of individuals to one another in a country is also building up.
This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island's own currency. Hence, there is no net loss.
An over-damped system is assumed when the bubble burst, meaning the land's value did not go down to below 1 dollar.
When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could shrink or in worst case, they go bankrupt.
If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game, he will neither win nor lose. But he will see the value of his money or land goes up and down like a see saw.
When the bubble was in the growing phase, everybody made money.
If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A) and take part in the game. But you must know when you should change everything back to cash.
As in the case of land, the above phenomenon applies to stocks as well.
The actual worth of land or stocks depends largely on psychology (or speculation)

Friday, June 06, 2008

Bandh is sponsored by... Kingfisher or is it Samsung

IS the glass half full or half empty? The question relates not so much to philosophy or psychology during the time of bandhs, as to a practical decision whether to refill or not. The Left has called for day-long shutdown in West Bengal, to protest against fuel price hikes. The Trinamool Congress has called another one, back-to-back. The result is to provide Kolkatans with a very long weekend during which to digest higher petrol prices along with fried fish and tandoori chicken. Organising a bandh costs money. Why not mobilise the money for a bandh through sponsorship? Kingfisher, for example, should be only too happy to sponsor an activity that directly leads to a spike in its sales. If Kingfisher does not see the business sense in creating house-arrested leisure during which the only sensible thing to do is to drink chilled beer while watching the latest crops of DVDs specially hired in advance for the occasion, Foster’s surely would. Provided LG and Samsung do not beat them to the sponsorship rights. Even television channels should evince keen interest in co-sponsorship spots — captive audiences would justify premium ad rates on band days. And considering that Kolkata has an intellectual reputation to uphold, at least one bookstore should join the fray. Gone are the days when a bandh call articulated popular anger against widely resented injustice. Today, bandhs have transformed into choreographed enactments of protest in which people dutifully play out the parts they by now know by heart. The plus side is the kickstart bandhs give to the huge and growing leisure economy called home entertainment. Music and film CDs, TV shows, MP3 players, computer games, books, board games, readymade food and drink and exercise machines flourish. Does all this indulgence on individual fulfilment erode the political content of bandhs? The personal could well turn political, too, during bandh, for those who want to rebel against pre-packaged protest by acting out that subversive call of peace marchers of yore, “make love, not war!”

Copyright: This article was publised in The Economic Times, India. Here is the link.

Sunday, September 18, 2005

From "Globalised India" to "Indianised Globe"

We Indians have grown listening and memorising the figures which establish that "Globalisation is giving Western mammoths, bigger cake to eat". Now, I believe that the day is not far when Indians can be proud that there are many Indian companies which will be controlling better part of world's commerce. I still remember the day when I had hard time in making my friends at a seminar on Globalisation while doing MBA to feel that our perception towards globalisation should change, that it is giving us also an opportunity to arrive on a bigger stage, and we are getting near to the concept of "Indianised Globe".

There are many examples for proving this. The Indian companies are not only exporting to a global base of OEMs*, they are reaching to the actual consumer. The achievements are not only in IT sector, where the Indians have proved their worth. The world’s No. 2 Tea company is Tata Tea. The best steel maker of the world is Tata Steel. The Indian business conglomerates like Birlas, Reliance, Bharti Televentures, Bharat Forge, and many more, are making their presence globally. And many of these companies are having their manufacturing base worldwide which is an indication of their vitality and inherent nature of working in cross-culture work environments.

Having said so many great things about the Indian companies, I feel that more Indian companies need to start taking their products to the consumer at a better cost, service ensuring that their products qualify for any quality test. As is an Indian saying, “Win at home for being victorious outside that”. The present Indian companies, most of which are established by the engineers who have gone through their academic careers through the years of India’s transformation from a debt-trodden nation to forex-surplus, and tenth largest economy in the world with GDP worth $692 billion.

Through the shades of changing sky color,
Through the spades working in various fields,
We woke,
We arose,
Creating a new world order,
Compounding peace and growth.

*OEM Original Equipment Manufacturer

Here 's a link supporting this article which was published Sep-18-05 in "The Business Online":