Thursday, September 30, 2010

Special harmony

Hummingbird came across an interesting article in Business Line (Life, September 17, 2010).  It talks about Tasleema who belongs to a family of musicians. She says that her interest in Shabad Kirtan took root when, as a six-year-old, she watched her father's Sikh students learning to play the tabla and harmonium for Shabad Kirtans. 

Tasleem Langoo sings (Source:  Business Line, Sep 17, 2010)
Some excerpts from the article -
Her high point was when she was asked to perform at the Golden Temple in Amritsar in 2007. Her sweet voice brought tears to the eyes of many. An old woman hugged her and kissed her hands, saying, “You are the voice of Sikh women and an honour to the Sikh community.” The woman then removed her gold earrings and gifted them to the stunned singer.
“That was so moving. It is one of the biggest compliments I have received so far,” says Tasleema. “But she didn't know that the girl she was praising was not a Sikh but a Muslim from Kashmir,” she chuckles.

Tasleema has never felt any conflict between her religion and her passion. “The basics of all religions are the same as they lead to one Supreme God,” she says and recites her favourite shabad — Kareema raheema Allah tu gani.
Hummingbird had visited Gurudvaras (Delhi & Ludhiana) and offered prayers without understanding one word of what was spoken there.  Hummingbird believes that all places of worship are sanctified by the presence of God and is happy to read about a soul doing something which appeals to her heart believing in the oneness of God even at a time when politicians/media are busy dividing people.

We are ready to sweep the medals...!

Even the usually dour Janab Cynic Ali could not help but smile looking at this cartoon in Mint (Sep 30, 2010). 

(Source:  Mint, September 30, 2010)

Recently KPMG identified 3 projects (KG-D6 project, 4,000 MW Mundra plant and IGI Airport Expansion at New Delhi) out of one hundred examples of great projects that are at different stages of development across the world.    

Hummingbird wonders if we have done anything well and within the right time, except for a few projects like Delhi Metro etc.  The efficiency and energy which we see in the private sector with clear incentive structure for good performance, is generally absent when government ends up implementing big projects.  We usually have delays, himalayan corruption, etc where Government is directly involved.   Sadly, that's the state of affairs of this country. 

Hummingbird lives in hope.  He still looks forward to better days... when this great country will be ruled by enlightened and visionary politicians and honest bureaucrats.  A time in the near future when we won't become the laughing stock of the world.  He is not asking for the best in the world.. he would be very happy to have something better than we have today...

Monday, September 20, 2010

And we expect corporate governance...

Hummingbird (HB) came across this news item (Rush of IPOs to beat SEBI results norm, Business Line, Sep 18, 2010) that says there are 12 issues coming this month to raise Rs 4,000 cr.  The highlight of the news item is this -
A SEBI directive and a soaring secondary market have led to a flurry of initial public offerings aimed at making it before September 30.

Some Rs 4,000 crore will be raised through 12 IPOs that are being pushed through during this period. Since September 14, any given day of the month has seen at least two ongoing IPOs to date, and the rest of the month is going to be no different, at least until September 27.

"A big reason for this flood of offerings is because of the September 30 deadline set by SEBI," said Mr Sanjay Jain, Executive Director and Head of the Investment Banking Division at JM Financial Consultants. SEBI has said that if companies have issuances that hit the market after September 30, then they will have to publish their June quarter results. Those that enter the marker before that can file the DRHP with their March-end annual results.

What is interesting is that the June quarter results of many of the listed companies were below expectations, and that of yet-to-list companies are likely to be the same, said analysts. It is not a surprise then that they don't want to raise funds using their June quarter results.

The message is contained in the last sentence of the above para - companies don't want to raise funds using their June quarter results.  But why?  Because, the June quarter results of many of the listed companies were below expectations, and that of yet-to-list companies are likely to be the same, said analysts.

Corporate governance philosophy of Infosys is based on the seven principles, out of which the first two appear relevant in this situation -
  1. Satisfy the spirit of the law and not just the letter of the law. Corporate governance standards should go beyond the law.
  2. Be transparent and maintain a high degree of disclosure levels. When in doubt, disclose.
HB doesn't want to comment on any individual company which is raising funds.  But HB cannot help wondering about corporate governance... these are the companies which ab initio wants to do something wrong (though they are within the boundaries of law) and we the common man expect them to behave properly and follow good corporate governance practices post listing.  Are we day dreaming?

Why are you always following me..?

A picture is worth a thousand words, is an old idiom.  Janab Cynic Ali could not help but smile looking at this cartoon in Mint (Sep 16, 2010).

Source:  Mint, Sep 16, 2010

Janab Cynic Ali remembers an old dialogue from Yes Minister -
Sometimes one is forced to consider the possibility that affairs are being conducted in a manner which, all things being considered and making all possible allowances is, not to put too fine a point on it, perhaps not entirely straightforward.
Well, he doesn't want to translate and give the meaning of this dialogue.  Before Janab Saheb went, he remembered this dialogue -
Hacker: Are you saying that winking at corruption is government policy?
Sir Humphrey: No, no, Minister! It could never be government policy. That is unthinkable! Only government practice.
Hacker: You're a cynic, Humphrey!
Sir Humphrey: A cynic is what an idealist calls a realist.
Janab Saheb wondered where this country is heading.  Being a old man, he preferred to listen to radio.  He closed the doors slowly and switched on the radio.  He was happy to listen to an old Tamil song.  In the silence of the night, Hummingbird overheard him humming a MGR song - "Ethanai kaalam dhaan yematruvaar indha naatile" from the Tamil film: Malai Kallan, 1954 (approx translation - for how long will cheaters exist in the country). 

Well, as usual, Hummingbird is optimistic.  He says that it may be dark outside.  But the sun will rise tomorrow and the darkness will go.

Saturday, September 4, 2010

Can ends justify means..?

An interesting conversation with Sri Devdutt Pattanaik.  Hummingbird feels that it is not necessary that we have to agree to whatever he says.  It is a modern interpretation with which we may or may not agree.  That's the beauty of this ancient land - we can agree to disagree. 

East vs. West -- the myths that mystify

Hummingbird enjoyed this talk by Sri Devdutt Pattanaik.

Friday, September 3, 2010

What's in a surname?

Hummingbird came across an interesting article titled "What's in a surname? In Europe, quite a lot" (Earth Times).  Some excerpts from the article -
Many journalists applying for accreditation to the Spanish presidency of the European Union in January faced an unusual problem: they did not have enough surnames.

Most EU citizens make do with one family name each. But Spanish and Portuguese tradition gives its people two - and the presidency accreditation website was not set up with compromise in mind.

"Error. Field missing. Please fill in: Surname 2," the website announced curtly each time a non-Hispanic journalist tried to enter his or her details on the site without the crucial second name.

The results have not been published, but anecdotal evidence from the Brussels press corps suggests that second surnames such as "None," "Mickey-Mouse" and "Don'thaveoneyouidiot" have now been carefully logged by the Spanish government's press service.
Hummingbird is from Madras where the custom of having surnames have been dropped atleast for half a century now and instead the custom of having initials commenced.  While some families have one initial (i.e., first letter of father's name), some others have two initials (first letters of grand father's name followed by father's name or place name + father's name).  Hummingbird has two initials.  He has no clue why one or two initials should be there.  Just that, if you find names with 'initials' we can safely assume that the person is mostly from the South.  Hummingbird has figured out that if a person has a series of 'initials', a safe guess is that he is from Andhra.

When Hummingbird moved out of Madras, he was thoroughly confused with first name, middle name, surname name concept of North India. First of all, Hummingbird is so 'intelligent' he cannot differentiate between a North Indian 'name' and 'surname'. So, he was happy to know the confusion between the English and French tradition in writing names mentioned in the article cited above.  Some excerpts -
Anybody who thinks that globalization is making Europe more standardized need only look at the continent's surnames.
Take French and English, for example. In English, it is standard practice to write the first name before the surname on documents such as envelopes and e-mail addresses.

In French, the reverse holds true - leaving this correspondent to collect a series of communications from French-speaking bank managers and insurance salesmen addressed to "Dear Nimmo," "Dear Nimmo Ben" and even "Dear Mr Ben."
Hummingbird's mind raced back in time.  He came to Mumbai in July 1999 and his passport expired sometime in December 2003 and had to be renewed.  Unfortunately, Hummingbird had taken his passport in Madras long back.  The form to be filled up asked for name (with initials expanded) and accordingly Hummingbird expanded his initials (Grandfather's name... Father's name... Hummingbird's name).  It became such a long name.  The biggest problem was what's the 'surname'?  Hummingbird being an 'intelligent' person wrote Grandfather's name (under first name) Father's name (middle name) and Hummingbird's name (surname).  When the renewal came, it had to be filled up the same way, said the travel agent who warned of not getting renewal if the name did not match.

The first problem came with police verification.  When the passport was first taken in Madras, a police constable came home to check and thereafter the passport came.  In Mumbai, Hummingbird 'intelligently' assumed that a similar process would be followed (see.. India is one country and passport being a Central subject, Hummingbird 'assumed' that a similar process would be followed).  Weeks went and the passport did not come.  Hummingbird again approached the travel agent who said that in Mumbai, policemen don't have time for passport verification and so we have to present ourselves before the police station so that they can verify and satisfy themselves if we are the same people who are referred to in the passport!

Hummingbird went to the police station twice but couldn't succeed.  Finally, he went early enough to be ahead in the queue and when his turn came up, the police constable refused to accept that Hummingbird did not have a surname.  All office and name proof had only 'initials' followed by Hummingbird's name but passport contained a 'long' name.  How can there be a person without surname, thundered the constable, feeling something fishy.  Any amount of explaining him that in Madras, the concept of surname is dead, was falling on deaf ears.  Finally, Hummingbird's pride was touched.  In a fit of emotion, he told the constable that if he is very particular then he can add 'Bharti' as the surname.  Ofcourse, he was remembering 'Mahakavi' Subramania Bharti, the famous nationalist poet from Tamil Nadu.  This did the trick.  The policeman was finally convinced that there could be 'species' in India who don't have 'caste name' or 'village name' as their surname.  He cleared it.

Then started the next round of waiting for the arrival of the renewed passport.  Even after more than a month when the passport did not come, the travel agent told Hummingbird to check up in Post Office.  Atlast on a Saturday, Hummingbird was in the Post Office and was told (ofcourse after waiting for an hour!) that there is no cover from the Passport Office in his name.  With sadness, Hummingbird walked away.  After going some distance, it suddenly occurred to him whether the passport had come in the 'first' name.  He again walked back to the Post Office and this time he found a cover in the 'first name' which is his 'Grandfather's name'.  Proudly Hummingbird walked out with his passport, as the Post Office had a post man from Madras, who believed Hummingbird's words.

The tension over name did not end there.  Unlike some frequent flyers who regularly go abroad, Hummingbird doesn't get opportunity to go abroad.  He had been to Montreal and Manchester in 2000.  After that it was in 2009 that he got an opportunity to go to abroad - this time he went to Finland.  When the visa came, Hummingbird was horrified - this time, his first initial ie., Grandfather's name became a 'middle' name (which is technically his father's name) and Hummingbird became his 'first' name, though so far, it was his last name.  So, as per the visa, he became 'Hummingbird.. followed by Grandfather's name and father's name.  Thus, what was till now father's name (middle name) became 'surname'! Somehow, Hummingbird went abroad and came back without problem, though till he landed in Finland, he had tension.

Hummingbird keeps pondering about what he should do now?  But the sheer fear of getting into a government office is keeping him away from attending to sorting out the name trouble he seems to be having.  Ofcourse the lesson he learnt was good enough - in the case of his daughter, he has given name as per Mumbai practise, which is first name, father's name followed by surname.  But he couldn't convince himself to give a surname which is either a caste name or village name.  He still believes in one India - though we may speak many languages.  He is a nationalist.  So he cut his own name in half.  He gave the split first half as his daughter's middle name (father's name) and the 2nd half as his daughter's surname.  Hopefully, she will not face the same troubles which Hummingbird faced.

So, the next time, someone asks - "What's in a surname", please refer them to Hummingbird.  Now coming back to the article referred to above -
But the prize for the most eye-catching surnames must surely go to the Czech Republic.
There, most women's surnames have a feminine ending, usually -a or -ova, as in tennis stars Jana Novotna and Martina Navratilova. 
But the rule also applies to foreign women - including high- profile visitors and film stars. 
Thus the Czech press refer to Angela Merkel as Angela Merkelova, Michelle Obama as Michelle Obamova, and Marilyn Monroe as Marilyn Monroeova. 
Shakespeare once asked, "What's in a name? That which we call a rose by any other name would smell as sweet. 
"Whether Mrs Rose would sound as sweet if she were called Mrs Roze, Mrs Rosiene or Mrs Roseova is up to you.
Ofcourse Shakespeare can ask "What's in a name? That which we call a rose by any other name would smell as sweet."  He is an innocent person from an old era.  In today's 'identity' era, name is everything.  If not properly given, the experience of Hummingbird is bound to be repeated.  If you still don't believe the words of Hummingbird then as a sample read about the experience of Sravanthi Challapalli!

Thursday, September 2, 2010

Rains + Bad roads + traffic jams = Tension!

It rained quite a bit for the last few days.  Hummingbird took a short video using his mobile (August 30, 2010).

It again rained heavily on August 31, 2010 yet fortunately, there was no traffic jam.  September 1st was a different day.  It didn't rain yet there was heavy traffic on the way to office.  Till the end, Hummingbird could never figure out what was the cause for the traffic jam.  However, he could take a few snaps using his mobile.  

Hummingbird reached office late   Yet he was smart enough to SMS his MD that he saw an investee company's 'building' on the way... and so should 'notionally' be counted as 'On Duty'...

Today was a good day.  For a change, it didn't rain.  It was a local government holiday on account of Gokulashtami and there wasn't much traffic on the roads.  Went to office peacefully.  Roads were almost empty in the morning.  Hummingbird wishes each day to be like this - less traffic on the roads... and peaceful.  Ofcourse, the roads continue to be bad.  Continuous rains haven't battered his spirit.  He is happy that there won't be drinking water problem this year.  Hummingbird hopes that the authorities would do something to restore the roads to a better condition.  

Hummingbird is an eternal optimist.  He still believes the government machinery would work, there would be less and less corruption in future, contractors won't cheat, roads would actually be laid and they would be of good quality and long lasting, entrepreneurs would be honest, politicians won't cheat... Well, Hummingbird is an eternal optimist. 

Why have a Planning Commission at all?

Sri B.S. Raghavan writing in the Business Line (July 7, 2010) says 
The Planning Commission had it coming some time or the other, if not from the Road Transport and Highways Minister, Mr Kamal Nath, then from any of the other Union Ministers or the Chief Ministers. Mr Nath has undoubtedly earned their gratitude by pulling up the Commission for indulging in ‘arm-chair' second guessing without any sense of ground realities and bringing out books and reports which are ‘well-bound' but low in content. He had the intellectual honesty to say this in the presence of the Deputy Chairman of the Commission, Dr Montek Singh Ahluwalia, who had the sporting spirit to hear it out with a broad smile and take it as ‘constructive criticism'!

It claims to work out sectoral targets and play an integrative role in the development of a holistic approach to policy formulation in critical areas of human, social and economic development.

These are just grandiloquent words. But riding on their back are as many as 34 divisions, most of which are vestiges from Nehru's days and deserve to be scrapped. Actually, in the current environment, the Planning Commission has little or no role to play.

If it is a question of keeping information and databases and serving as a mediator and facilitator for Ministries and States, or effecting coordination among them, a small cell attached to the Cabinet Secretariat or the Prime Minister's Office can easily serve the purpose, without having to maintain the huge paraphernalia of a bloated bureaucracy at such great expense.

There have been periods in the past, such as between 1965 and 1969 and 1990-92, when the Planning Commission was in a state of suspended animation, with the country feeling no ill effects.
In the present context, dismantling it will have a wholesome effect, besides saving plenty of taxpayers' money.

There have been periods in the past, such as between 1965 and 1969 and 1990-92, when the Planning Commission was in a state of suspended animation, with the country feeling no ill effects.  In the present context, dismantling it will have a wholesome effect, besides saving plenty of taxpayers' money.
Janab Cynic Ali is all smiles.  He remembers some old dialogues from Yes Minister -
"We dare not allow politicians to establish the principle that senior civil servants can be removed for incompetence. We could loose dozens of our chaps. Hundreds maybe. Even thousands."
"It is unthinkable that politicians should be allowed to remove civil servants on grounds of incompetence. Of course some civil servants are incompetent but not incompetent enough for a politician to notice. And if civil servants could remove politicians on grounds of incompetence it would empty the House of Commons, remove the Cabinet, and be the end of democracy and the beginning of responsible government."
"Politicians are simple people; they like simple people; they like simple choices and clear guidance."
"It is axiomatic in government that hornets' nests should be left unstirred, cans of worms should remain unopened, and cats should be left firmly in bags and not set among the pigeons. Ministers should also leave boats unrocked, nettles ungrasped, refrain from taking bulls by the horns, and resolutely turn their backs to the music."
Ali Saheb points out that there are 35 Cabinet Ministers (including Sri Montek Singh Ahluwalia and Nandan Nilekani), 7 Ministers of State (Independent Charge) and 37 Ministers of State.  Does India need so many Ministers, ponders Janab Ali.  What a waste of public money he feels.  Then why criticise Planning Commission alone as a waste of nation's resources, he wonders.  Too many Ministers, too many departments (what will a Minister do without a department to manage?), too many bureaucrats / officials... too much waste of public money.  

Janab Ali feels that even if on the efficiency front or effectiveness front, what Sri Raghavan writes may be true, India being ruled by politicians is too dangerous an idea.  Ali Saheb thinks about the idiom "Let sleeping dogs lie" and says knowing the way Indian politicians work, it's better to have checks and balances of the type of Planning Commission (or C & AG) even if what they do is termed as arm-chair' second guessing.  When we take up cost cutting, we should start from the top, he says. 

For once, Hummingbird concurs. 

Wednesday, September 1, 2010

Airlines in trouble = Passengers in trouble + Banks in trouble

The heat of the problems that Paramount Airways has been having with the Directorate-General of Civil Aviation and the aircraft financiers (GE Capital Aviation Services) is now being felt by Andhra Bank which had to call its Rs 42-crore loan to the airline as a non-performing asset and make provisions for it says Business Line (Andhra Bank hits air pocket with Paramount Airways, August 26, 2010).  Paramount and GE Aviation say each owes the other.  The airline is aggrieved as to why the DGCA should take sides in a commercial dispute. The net result is Paramount has stopped functioning and has become a NPA in Andhra Bank's books. 

Hummingbird feels that if there is a contractual dispute, there are courts to sort out the problem and the DGCA shouldn't have intervened in a way that derailed the private airline and incapacitated it from repaying its dues to its bankers.  One can agree if its a matter related to safety. 

Hummingbird cannot feel bad at the irrational pricing and reckless expansion programme announced by almost all the airlines even as they were bleeding a slow death.  Hummingbird is pained at the reckless lending by banks to such suicidal airlines.  The net result is visible to everyone today -

Source:  Mint, June 28, 2010

The net result is that Banks are now doing a debt recast for airlines - so that what happened to Andhra Bank with respect to Paramount Airways doesn't happen to them.  Hummingbird wonders whether any of the banks seriously thought of 'risk' while lending.  Instead of thinking through the implications of the ruinous pricing policy being pursued by the airline industry before giving loans to the airlines, the banks are now stating various reasons including the cyclical nature of the industry, a tough operating environment, capital intensity of the sector and the long breakeven period, for justifying why the debt recast should be done entailing lower interest rates, conversion of overdue interest into principal, etc.  

Hummingbird is not convinced - this was a purely commercial (and conscious) decision to lend to the airlines.  Now that the repayments are not coming, banks cannot (and should not) do a debt recast, at a time when the peak of the problems faced by the airline industry is over.  A more honest and transparent way, is to recognise NPAs wherever it is, provide for in the books of accounts and spruce up the 'risk management' practices in the banks.  That would ensure that atleast in future such reckless lending doesn't happen.  

One more worrying factor is the citing of 'long gestation' periods / long break-even periods for the debt recast.  Banks are predominantly collecting deposits for the short term.  Hummingbird wonders as to why in such a situation, they lent to airlines which (they now say) take long time to break-even?  What was the role of 'Asset-Liability-Management-Committee' in such banks?  Or, are all these internal control(s) / process(es) a mere eye wash?  

Mint says that RBI has censured banks for not following prudent norms before lending to airlines and putting themselves in a tight spot. It has recommended that banks take tangible securities as collateral for future loans instead of depending on promoter guarantees and brand value. The reckless pricing war was visible to everyone.  Poor financial position of the airlines tempts them to cut corners (they call it cutting costs) and end up playing with lives of ordinary passengers. Recently it came to light that SpiceJet illegally allowed children, who should have been given separate seats, to travel on the laps of adults to accommodate more passengers on a Delhi-Mumbai flight earlier this month.

Mohan Ranganathan writing in Business Line (June 23, 2010) terms it as "Conscienceless on aviation safety".  After listing a series of near disasters, he concludes by saying - "Political interference and judicial apathy have contributed to the lowering of safety and moral standards in Indian aviation. Commercial considerations have been the prime focus. Unless all those involved in regulating the sector start listening to their consciences, the tragedy in Mangalore is not going to be the last."

Supporting reckless expansion in an industry which followed suicidal pricing policies was the mistake of the Banks.  What started as a problem of the respective airlines, has been converted into the problem of the lenders and passengers.  No one has a clue as to when the next air accident will happen.  If only one bank is in trouble, then the concerned Bank Chairman would be in trouble.  If all the banks are in trouble, then there is no problem for any single bank!  As far as the airlines are concerned, when they expanded capacities they wanted loans and they got it.  Today, when they want these debts to be restructured, they will get it.  What about the poor tax payer whose money gets blown in such reckless projects?  What about the passengers whose lives are compromised due to poor safety procedures?  Hummingbird has no answers and wonders where we are heading...