Tuesday 19 March 2013

Why India’s poor need a vibrant stock market

The poor have no stake in the stock market, right? Wrong.
On the contrary, the poor have a greater stake in the stock market than rich investors do. Prakash Karat and his ilk who have appropriated for themselves the position of spokespersons of the poor need to understand this.
There are several ways in which this story plays itself out, but the one line I wish to explore for now is inflation.
Allow me to step back a little and take you to this morning’s newspaper headlines. Petrol prices are up by over Rs 7 depending on where you live. Comrade Raja of the Communist Party of India would have you know that this will have a cascading effect on prices and will hurt the poor. No kidding.
This Comrade like other comrades who are wont to prefer ideology to facts, do not even have a rudimentary understanding of market economics or a grasp of the facts. If he had bothered to check the facts, he would have known that we have adequate stocks of rice and pulses, which if used properly, need not make this increase hugely painful for the poor. If the Comrade had an understanding of market economics, he would have figured out that his solution of not raising prices is not just simplistic and naive but suicidal in the short, medium and long run. Unburdened by the pressures of having ever had to rule, hence untormented by the burden of policy making, the good Comrade knows only to oppose which he does, like his other brethren whose propensity to paint the world red has left the finances of many countries swathed in similar colours, only difference being in the shade of red.
But why did they have to raise fuel prices? Because the oil bill shot through the roof. Today’s DNA tells me that every rupee decline against the dollar adds Rs 8000 crore to the oil bill.
Why did the oil bill go through the roof? Because the dollar surged ahead, not persuaded by the assurances of the government.
Why did the dollar surge ahead? Because there are many more foreign investors wanting to get their investments out than those wanting in.
Why do they want out? They want out because they do not see the Indian policy environment with all of its flip flops as being a stable one to be invested in. So they are buying dollars.
The timing of all this could not be worse. As a country, we are running an unacceptably high current account deficit. The result of this is that we are dipping into our foreign exchange reserves to finance our consumption. I won’t bore you with the precise numbers but suffice to say that the numbers are alarming as they are showing no signs of correcting. Historically, remittances from Indian resident overseas has helped bridge the gap but with the world in turmoil that too has come down. So we have to dip into our reserves to finance our purchase of day to day needs such as oil and so on. At the same time, if we have to use the forex reserves to meet the burgeoning demand for dollars from foreigners who want to take their money out, we have a problem on our hands. There is simply not enough dollars in our reserve kitty to defend in any meaningful way the rupee, hence a sliding rupee is inevitable.
So, when the stock market tanks, and foreigners take money faster than it comes in, as the dollar rises and oil bill shoots up, a petrol price hike becomes necessary. When petrol price increases and other fuel prices follow, the cost of inputs goes up, the cost of moving goods goes up, inflationary conditions sets in.
The poor and those working on daily wages are the worst affected by inflation. They don’t enjoy the benefit of inflation indexing or what the salaried class knows as DA or Dearness Allowance which corrects their wages automatically for inflation.
When the rich lose money in the stock markets, their wealth erodes and that’s that. But when foreign capital takes flight, as the dollar strengthens and inflation raises its ugly head, the poor have a tough time just living, one meal at a time.
My friend Ashish who now heads the BSE told me that as much as 2 % of our growth rides on the back of foreign capital. I have also seen back of the envelope calculations which establish a clear correlation between economic growth and job creation.
So when the stock market behaves as it has been doing, the poor really get a raw deal. It is high time their champions woke up to this.

Why is Mamata Banerjee playing games with Pranab babu?

More than two months ago, I wrote that Pranab Mukherjee will be India’s next President. I continue to stand by that statement. What I will do is to try and provide a perspective on what is happening and why.

Pranab babu wants to be President of India. Unless he can become the Prime Minister. In which case, he will give up his Presidential ambitions to move into 7 RCR. Mamata knows this and the game plan is to confuse the hell out of everyone by coming up with these 3 names for President.

Mamata does not like Pranab babu, not in the least bit. She sees him as a CPIM stooge. His previous elections to the Rajya Sabha happened because of help from the CPIM. I know of one occasion when Dhirubhai Ambani called Jyoti babu to get Pranab babu the surplus votes that the Left front had after getting their own nominees elected.

Grateful that he was to the Left for their support through the years, Pranab babu did the CPIM a great service by keeping Mamata out of an alliance with the Congress for as long as he could. The left has been scared only of Mamata but they also knew that so long as Mamata was with the BJP, they had nothing to worry about. Whenever a disenchanted Mamata sent feelers to the Congress, she would be rebuffed at the prompting of Pranab babu who made her leaving the BJP a condition precedent to any talks of cooperation. The BJP gaver her a foothold at the national level and she knew that she would be weakened in her negotiations with the Congress if she dropped the BJP first. Pranab babu exploited this to the hilt and used this to get the High Command to keep Mamata at arms length and making it clear to her that she should dissociate herself from the BJP.

When Karat pulled the rug from under the Congress’ feet, Pranab babu’s efforts to keep Mamata at bay came a cropper. Pranab babu’s adversaries in the Bengal Congress managed to get the ears of 10 Janpath, it also helped that Mamata had by then had started distancing herself from the BJP. An alliance was struck and the CPIM was decimated, the Left buried.

Mamata holds Pranab babu personally responsible for allowing the Left one term more than what she though they would get. She used to call the Congress, the B team of the CPIM and Pranab Babu its captain.

Her pleasure comes from causing Pranab babu pain. She knows that she cannot stop his becoming the President. But she knows that he wants to be PM. But having learned his lesson from his previous blunders when he flaunted his ambition, he will not reveal his cards this time around. He wants to be president, but he wants to be PM even more. Of course he is tired and wants to ride away into the sunset which is what moving to Rashtrapati Bhavan would be about. But if there is even a remote chance of becoming PM, he would not want to give that up. Over the last year, he has been the target of barbs by Chidambaram for which he blames the PM, he is livid about that. So what if he says he is tired and wants some R & R. Narasimha Rao had retired from politics when the prospect of occupying the PM’s chair allowed him to stage a miraculous recovery never recorded before in the annals of medical science.

Mamata knows this and is playing with him. If she can convince him to believe that Manmohan Singh is an acceptable alternative and if she can rally other parties around Singh, not to mention congressmen who have begun to view Singh as a liability, she would have won the battle. This morning’s papers have industry leaders talking about the missing leader at PMO. All of this works to Mamata’s advantage. But Sonia Gandhi does not trust Pranab babu and that is a real problem. She cannot allow him to be PM but she also knows that she cannot do without him in the government. It is a real quandary she is in. At the same time, she cannot also ignore the cries from her own party for a leadership change.

Can the Congress not show Mamata the middle finger and get its way. It can. But with less than 2 years to Lok Sabha elections, the Congress can ill afford to antagonise its allies. The formation of a thrd front will hurt the Congress the most and tit would be stupid for them to drive their own allies away to join a new formation. The BJP will gain. So, the need for consultations and the need to look like they are trying to arrive at a consensus.

In the meanwhile, Pranab babu may have made Mamata’s position more rigid by reaching out to Buddhadeb Bhattacharya. People who think Mamata will be under pressure to support Pranab babu as he is a Bengali are wrong because the argument will be turned around by Mamata who will shout that he is of no help to Bengal when he is loath to sanction the rescue package she is asking for. That argument will not work.

Where does all this leave Pranab babu? He must know how it felt for Trishanku, i guess.

In defence of Mamata Banerjee

I am fond of Mamata Banerjee.

I feel that she is misunderstood. If one were to see her actions, there is one thread that runs through it all, a pathological hatred for the Communist parties and everything communist. If you understand this, you understand everything else about her, you begin to develop an appreciation for her actions, for her utterances, for the way she reacts.

Her moving into the seat of power must be seen in the same light as you and I moving into a termite infested house. The first thing you would do is to call pest control to exterminate the termites, isn’t that so? After the pest control chaps have left the house and you spot termites again, would you not go ballistic? You would start looking for termites everywhere, you would look for early warning signals, you will err only on the side of panic. If someone tells you that the beautiful mango tree is the problem, you will order it to be felled immediately. If yet another person told you that the termites have taken over one side of your house, you will order that side demolished. You will Google everything about termites and if there is the slightest indication that they could stage a comeback, you will stop at nothing, simply nothing.

To Mamata, the communists are worse than termites. Over the 3 decades they have been in power, they have taken over everything. They sought to control a great deal through the education system. In the early 1990s, teachers’ salaries became part of the state budget, with a crippling effect on state finances. The Communists believed that if you had the teachers on your side, you could control the people. Not only were the teachers in the advantageous position of filling the minds of kids up with communist propaganda, it was also useful to keep them happy as it is they who conducted elections. No surprise then that Mamata’s first move is to purge the education system casino en ligne francais legal of anybody with a fondness for communist ideology. She sees everything in black and white: either you are against the Communists or you are for her. If you are for her, you will cut her some slack. If you are for the Communists you will attack her, make fun of her, slight her at every opportunity. She did not set the rule on this one, the CPIM did.

The argument she makes is simple enough: You allowed the Communists  so much latitude, you let them get away with even daring to take Tagore off the shelves, you let Jatin Chakravarty impose his concept of Sanskriti, banning everything (including, or should I say especially, Usha Uthup) else as apasanskriti, you let Subash Chakravarty and his goons run amuck at election time, you let the communists retain their stranglehold through what came to be known as scientific rigging of elections, and now you have elected me, don’t forget that it is your battles I am fighting. What probably irritates her to no end is that the media would not have dared to question Jyoti Basu thus or even his successor, Buddhadeb Bhattacharya. She realizes that she is paying the price of being a Ma Maati Manush Chief Minister. She is accessible and therefore leaves herself open to ridicule. Not for her the idea of sitting on a lofty perch, far removed from the people she represents.

People ridicule her for her scatter brained ideas. I wonder how many people remember that the CPIM once tried to set up a power plant for which they tried to raise funding through blood donation camps. I don’t recall too many people making fun of Jyoti babu at that time, the media was too scared to raise the slightest voice of protest.

If you want tonknow how the Communists work, read what Kerala CPIM leader M M Mani said recently. According to him the party would not hesitate to kill to achieve its ends. In Kerela, there was atleast the Church to provide a balance and keep the Commuinists on their toes. Yet they behaved as Mani says they did. in Bengal, they had no opposition of any kind. How do you think they dealt with opposition?

I am not for a moment extolling the greatness of Mamata, I am the first to accept she has not shown too much evidence of that. She has not done too many great things that I can talk about.  All that I am simply suggesting is that if you kept quiet during the purge by the CPIM, why don’t you extend the same courtesies to her? She has been through hell to get here. She deserves your sympathy. Give her a break.


Marathon musings

The marathon was the most challenging run I have had to do in my 49 years on earth. I should think that it would rank right up there with my first steps or even my first crawl but since those are moments I cannot recall this must rank right up there on top as the most challenging physical activity I have ever attempted.

If someone asked me if this was the most challenging thing I have ever done in my life,  I would put it on par with the effort I had to expend to get through school, especially class 8 when I flunked in 4 subjects in the half yearly exam and class XI where even after mutual assistance (Chetan Shah was at the other end of this mutual business) neither of us had enough to show for Anjan Dasgupta to have the pleasure of deducting any marks by way of penalty. When I think about it, I am not sure if I made an impression anywhere in school except in the attendance register and even that impression was upto the teacher to make against my name.

Enough of digressions, over to the marathon. After all, I have a lot of ground to cover.

  1. At the outset, allow me to thank Ankit Agarwal and Santanu Santra who helped me get into running. So disgusted they were with my lack of discipline and slowness of movement, that they both left IRIS and went a long way away from me. Santanu even changed his name in a bid to acquire a new identity and rid himself of any association with me, while Ankit started working for a firm which produced medical equipment in a bid to see if there was anything they had that could set me right.

  2. Then there is Rajat Chauhan, my friend, a marathoner (he ran 21 km everyday this past December), a doctor, who has promised to help me come up to a reasonable speed before the next edition of the marathon arrives. If there is one big carry away from Rajat, it is that there is a huge difference between orthopaedics and sports medicine specialists. The latter help you keep on doing what you have been doing, the former want you to stop. I remember having shown by X Ray to a leading orthopedic 2 years ago, he was sorely tempted to get me on to his operating table, his business must have been slow. Rajat took one look at the same X Ray and threw it away, saying “If you knee does not have this much of wear and tear when you are 47, you have not even used it.”  The next time any of you want to have your knee checked out, you know what sort of a doctor you are looking for.

  3. It was Priya who sent me to Rajat.  Priya is a PYT and a smart one too who ran 5 marathons in 5 days in the Himalayas at a height of 18000 feet. (Priya: If I have exaggerated a wee bit, leave it be) Priya is a musician, a composer, a hugely talented person who got the young men of her building in Goregaon running after her, so that they could get a date with her. She simply outran all of them.

  4. I owe a special thank you to my physio Heath, a South African who has now inspired me to run in Cape Town in April. Aptly named the twin oceans marathon, it will allow me to boast that I have run from the Atlantic Ocean to the Indian Ocean. Heath drilled into me the importance of stretching but if I have not been as disciplined as I should have, I have only myself to blame. Heath does a deep tissue massage like nobody else that I know, he is simply a class act. If you have ever seen Anil Ambani run, you would have seen Heath running alongside. (While on the subject of Anil Ambani running, I think the reason he runs is so that he can keep pace with SEBI’s whole time Member Dr Abraham, also a keen runner. The only place they can have a private chat without worrying about the conversation getting taped for subsequent airing is during a marathon!!)

  5. Thanks are also due to Shahaji Bhosale my coach in Vashi, I was his first ward and the one to  disappoint him the most, methinks. I have a feeling that he tolerates me, because I must have been a good endorsement for him, causing his clientele t grow. “If he can make me run, surely anyone can,” was his understated sales pitch. I am especially grateful to him for pointing out on day one that everything was wrong with the way I run. I am also happy that he has not done much to correct it, for, this excuse has stood me well even as I have laboured over distances long and short. All this notwithstanding, I hope I have done him proud by being the first of his wards to attempt and complete the 42 k.

  6. I have to thank my co runners at Vashi, each one faster than me, who would lavish fulsome praise on any slight improvement I had to show, knowing fully that I was never a threat to them. Ram, Mahesh, Sivakumar, Aditya, Bhosale, Rajendra, Srini, Mani, Balu, Jayaraman, the Pavan Putris (we used to call them PPs) Raji, Sheela,  Shobha, Anu and of course, Deepta. Each of them has inspired me in their own unique ways. They  were all so much faster than me that to a bystander it looked as if I was standing by.

  7. Many are those who helped me enroute. The day was hotter than I had expected. i must thank Shilpa for helping me undress, she is also truly a great pin up artiste, the dexterity with which she pinned my bib back on was amazing. Personally, the bhangra musicians turned out to be more useful to me than all the other musicians, this has to do with where they were placed and the rhythm which they stuck to. We need more music on the way back. A special thank you to Revathi’s husband, Shivvie, who egged me on at the Haji Ali circle, it helped me gain some tail wind. At 32 km, one is thrilled to see a familiar face. But at my speed, I was torn between feeling happy that he was there and feelimg embarrassed at my slow progress.

  8. I have always been a slow runner. I continue to be one. Initially I used to blame it on my old age (I am almost 50, you see) but then older people went past me. Then I turned to blaming it on my weight until much heavier people started passing me by. That’s when my excuses started turning complicated. It was a broth, with a bit of travel related excuse leading to poor sleeping habits caused by irritating flight schedules disrupted by weather. Throw in some client enforced socializing, a bit of illness and there you have a concoction that will cause people to actually give you credit for running in this condition.

  9. It was at the Mahalakshmi race course that this woman Roshni Bakshi kept overtaking me. It was very embarrassing at first especially because she is Deepta’s batchmate. Howsoever much I tried to tell myself that it was unnecessary to get competitive, I had to find a way to deal with it. Mercifully for me, even before I completed 2 of my targeted 8 rounds of the race course, I had found a way out of my predicament. No, I did not stop running, that would have been a cop out. Instead, I simply decided to run the other way. But very soon, I had a new problem. I discovered that Roshni had a habit of reversing her direction every so often. The moment I realized this, I started doing the same thing and from then on, Roshni Bakshi never overtook me and I could run in peace without being torn to pieces by someone who ran so fast that even her shadow could not keep pace with her. I also rechristened her Rush Nee Bhag Chi, with apologies to the 4 languages I am twisting in so doing.

  10. When I told Deepta about my new name for Roshni, she wondered why I had spared her friend and another batch mate, Sandeep “Dingo” Bhandarkar, an experienced runner and my guru. Turn out that she did not want Dingo spared, considering that she had co habited with Rush Nee in the girls dorm at IIM A.  Dingo was easy. He became Bhag daud kar. Nice Maharashtrian Brahmin ring to it, wouldn’t you say.

  11. This ability to find creative escapist solutions so as not to be viewed in dim light would stand me in good stead much later too. When deepta announced her intention to run, I was genuinely concerned. Mercifully for me, she said that she would run the half and not the full, eliminating the possibility of me finishing after she did in the same event. I kep telling husbands never to compete with wives. Balu did not heed my advice and ran in the same event as his wife Raji and lives to regret it as she finished way ahead of him. When he got injured during training, keeping him off the tracks for 6 weeks, I thought he would see reason. But no, he is an analyst you see, Crisil trained. He was trained not to see whats behind the scenes, he was ill equipped to understand the subtle messages. Poor Balu. He has run off to Kerala to hide.

  12. I did not have to confront the timing issue until I reached the marathon venue. I overheard people around me talk about their target times. 3: 30 said one, to which another said, “I would have liked to do 3:15 but my boss is running with me, so I have to slow down.” When it was my turn to share, I said “2:30” confidently. Most thought I was mad, yet others did not know what hit them. Being polite, they chose not to probe, little realizing that I was talking about finishing by 2.30 PM and not in 2:30 hours. How am I to blame if they understood otherwise? Mahabharata has been truly instructional in my life.

  13. You may wish to know why I could not have finished sooner than the 6 + hours I took. For this the organizers are entirely to blame. Last year when I ran the 21, the first signs at the toll gate very clearly announced “No overtaking.” I took it seriously and being a concerned citizen, I realized that I had two choices. I could either insist on starting before everybody else and run faster than them so that I did not violate the law, or if I started later, stay back and not overtake anyone. In so doing, I ensure that not only did I not have to overtake anyone, I did not let anyone overtake me either. Later someone told me that the rules did not apply to marathoners but I ask you this: why have signs if they are not meant for those using the road? How silly.

  14. Manoj Sinha tells me the story of this run where he finished in record time because he got to admire the rump of two PYTs. No such luck in Mumbai. I strongly urge the organizers to have a reservation policy so that there is a greater representation of PYTs in the run. Now that they have started asking for the photos of the runners, this should be easy enough to do. The presence of more PYTs can be tremendously inspirational and if Manoj was not left behind because of his fixation on their rumps, I am sure it can have a similar effect in Mumbai too.

  15. On the subject of Manoj Sinha, I must tell you that he wanted to run too but woke up too late. And then asked me to get him a bib. You know how these NRIs are, they want everything their way. They will create conditions to violate rules and then blame our motherland for being in a state of lawlessness, a jugad state and so on. You have heard the saying, right? Jab tak suraj chand rahega, NRI to badnam karega. I will have none of this.  What is worse is that he wanted to come and show us up, us poor Indians with a target time that was half of mine. I think we should not let them in, say what?

  16. As someone said to me, there is hope for me yet, considering that I belong to a minority of 0.0001% of Mumbaikars who not only dared to run and go on to finish the 42 km long run yesterday. While I accept the compliment with humility, I should point out that if you focus sufficiently narrowly on the numerator and divide by the humongous population that we are blessed with, anyone can be in as much of a minority as they choose to be. To extrapolate further, I must have finished first in the category of Vashi resident Tamil Ayyars of Kolkata origin, married to Iyengars from Delhi. So there, I am feeling good already. Levity aside, I am actually on top of the world.

  17. Why did I take 6+ hours? Because I ran much much more than the required distance. My Garmin tells me that I ran almost 43 km.  On many roads I took the outer arc, adding to the distance traversed. I tried to stay in a group of one, so that people coming from the other direction could spot me and admire my efforts. This is very important. Until such time as I had not passed all the 21 km runners coming from the opposite direction, I stayed on the extreme right so that they could see me and applaud me. Subra did, Raji did. But Rashesh did not. I am not sure if he even  grunted an acknowledgement as I hailed him. May be that’s because he is IIM A. May be because, his competitor Ranu Vohra of Avendus was running the 42 k while Rashesh was still on the baby slopes which is how we marathoners refer to the 21. Though I must give full credit to  Rashesh’s as a manager extraordinaire for planting two of his able lieutenants to keep an eye on Ranu to see if he was cutting any deals on the way. In any event, Rashesh’s lack of encouragement slowed me down further.

  18. In all of this there was a silver lining though. Over the 5 years I have run the half marathon, I have always had to face the ignominy of the full marathoners overtaking me even before I reach the finish line. It used to be traumatic. How else can I describe it when people running twice your distance overtake you in half the time? No such worries this time around. I can say honestly that I have now raced several Olympians to the finish. They overtook me as they were supposed to but so what? How else would they have won? I did not want a repeat of what Asterix did to the Romans. The organisers would not have approved.

  19. The biggest gain from the Marathon was a totally unexpected one. As a colossal failure who did not get into any enginering college, what to speak of IIT, as a disaster who did not study at the IIMs, I used to respond to those that asked if I am from the IIMs with a stock “I am with a lass of 89″ reply. But now that i have been invited to lunch next Saturday by the class of 89, I wonder if I can now say that I was with the class of 89? I should try it out the next time. :)

Letter to my colleagues

May 20, 2024 Dear colleague,  You may have seen from the financial results for the year ended March 31, 2024 that IRIS is now in the 100 cro...