The Silent Indian National Anthem

Hummingbird came across an interesting review by Sri Pathap Suthan in Mint (January 29, 2011) titled "The Ring of Truth".  It's about a film on the national anthem created by Mudra Group for Reliance BIG Cinemas and features children with hearing disabilities singing the National Anthem through their sign language.

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...

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.

Future, tense..?

Sri V Anantha Nageswaran in his article "Can Asians exhale?" (Mint, June 14, 2010) says that a news item in The Times of India on the relentless rise in apartment prices in Mumbai caught his attention. The asking price for a 620 sq. ft apartment was around Rs44 lakh.  While buyers are turning away, the developers do not appear to be deterred. 

 

The price rise is unreasonable.  In a place like Bombay (or Mumbai, to be politically correct), the rise is spectacular.  People who bought flats in the range of Rs.15-20 lakh 4 to 5 years back are getting offers of Rs.80 to 100 lakh.  In an earlier flat where we stayed (on rent), after the owner promised that we can stay for as long as we want, within 6 months, we had real estate agents swarming the place as there was change of heart of the owner.  The offers he was getting was very good though the housing complex (where our flat was located) was considered as part of the forest land and it was anybody's guess about the final decision in the matter.  After months of uncertainty, we finally shifted to another flat, wherein again after 6 months, we ended up with same uncertainty, as the flat came up for sale.  

Today people are getting offers, which have no basis or economic rationale.  After twenty years of working, I ventured into buying a flat and that too with trepidation.  We are taking a huge risk with a long term commitment.  The key assumption is that our jobs would be intact - our companies would grow - our salaries would go up etc.  We are living in an uncertain world and these assumptions, age has taught me, is pretty dangerous.  Today, too many youngsters are in the job market and they have never seen a downturn / recession.  That's why I feel too many young people are out to buy flats... even if its only for investment.  Maybe the growth in the economy in the last few years, has made corporates loosen their purse strings.  Too many young people make money too quickly and they don't know what to do with that money.  As they have seen that the prices of flats have gone up (in the recent past) they believe that it will go up in similar fashion in the coming years and end up buying flats at whatever be the price.  The situation is unsustainable.  Often I hear people say that it is better to buy flat now, as it will be too late tomorrow.  Here again, people make the assumption that the rosy job / salary / income situation would continue in the future for an indefinite period.  Only time will tell, if such an assumption is correct.

Anantha Nageswaran says -  

.. a combination of interest rate increases, currency appreciation, capital controls, anti-speculative measures targeted at specific sectors and moral suasion with the financial sector and with the public have to form part of the policy response in Asia.

... the overheating is also being fanned due to the pursuit of short-term economic growth as an end-goal in itself. Asia is still anxious to catch up fast and to compress the two or more centuries that Western nations took to achieve their current status into a generation. That is neither desirable nor feasible. There is needless insecurity and breathless activity, consequently. The social, environmental and geopolitical costs of such a pursuit are eluding their grasp.

The point is that no one wants to rock a boat when it apparently is sailing smoothly.  Who will bell the cat?  Politicians, media, banks ... everyone seems to have a vested interest in not rocking the boat.  Why fix something that isn't broke?  That seems to be the thinking.  I only wish it doesn't become a tsunami in future and wipe off all the hard work of the past.  The inflation that is raging on every single item of day-to-day use has to be seen to be believed.  But it doesn't pinch the politicians.  It doesn't pinch the government employees, as they have something like Dearness Allowance, to take care of price rise.  What about the employees from the private sector and the unorganised sector who work for fixed salaries (or CTCs)?  Who talks about them, now-a-days?

As China is growing at 10+% for decades, Indian politicians feel it will be below our dignity if the growth rate goes down a bit and so loose money policy will continue.  In the process, we lose our fight against inflation and impose a cruel tax on the poor.  I am increasingly worried about the future.  Sensex may go wherever it wants.  It doesn't matter to me.  For the common man, it is important to know whether he/she would be able to service large loans taken for housing purposes over 15 to 20 year periods?  I think, today no one is thinking about that.  Everyone feels that the prices of flats would only go up and in case of emergency situation, they can always sell the flat and get out.  In the event of a worse case situation emerging, can everyone get out at the same time?  Will not the prices crash in that case?  Who will service the EMI in such an event?  How will banks manage a tsunami of defaults?  Do they have a macro model where such events are taken cognizance of?  I am not sure. 

Anantha Nageswaran quotes George Akerlof and Robert Shiller for their excellent description of overheating (page 65 of their book Animal Spirits) -

The term overheated economy, as we shall use it, refers to a situation in which confidence has gone beyond normal bounds, in which an increasing fraction of people have lost their normal scepticism about the economic outlook and are ready to believe stories about a new economic boom. It is a time when careless spending by consumers is the norm and when bad real investments are made, with the initiators of those investments merely hoping that others will buy them out, not feeling independently confident that the underlying real investment is sound. It is a time when corruption and bad faith run high, since they rely on trusting behaviour on the part of the public and of apathetic government regulators. This corruption, however, is mostly recognized publicly only after the fact, when the euphoria has ended. It is often also a time when people feel social pressure to consumer at a high level because they see everyone else doing so, do not want to be seen as laggards, and do not worry about such high levels of consumption because they feel that others don’t either.

To me, this definition would definitely hold good in the Indian scenerio and that makes the future... tense.  

Sri Ashoak Upadhyay in his biting article "False optimism, empty promises" (Business Line, June 28, 2010) points out the policy makers have been endlessly dishing out a rosy perception of the future to those who want to hear it endlessly. For the rest, the miseries of inflation and poor infrastructure are here to stay. 

Sri Upadhyay says -

SAME OLD CLAPTRAP

But the policy player seems to have advanced a step. The only way to connect India with modern infrastructure is to fill the funds gap — itself an endless incantation — with capital from the advanced markets that have it.

So the critical problem affecting the the Indian economy is both capital and the institutional mechanism to ensure its smooth flow into the sector. That sounds familiar, too.

So do a raft of assurances on everything that is wrong with India. Consumer prices have been riding high since mid-2008 — in their endless round of increases — and policymakers have never tired of assuring the nation, on television, in print, that their reversal is just round the corner.

How, one asks; what is the Ministry of Agriculture going to do? Crack the whip on hoarders? Boost farm productivity? Everyone is betting on rain, it appears. Last year the drought spoilt the kharif crop; then it was said the rabi would do the trick.

In April when prices soared (and even the Wholesale Price Index, or headline inflation defied North Block) policy players, from the advisor to the Finance Ministry to the Prime Minster himself, rushed to assure us that by year's end, December 2009 that is, prices would drop.

The Reserve Bank of India, for its part, magisterially pronounced its own time-table for deliverance —next March.

Even as policy makers repeatedly assured that inflation would go down, it has defied control.  It has not stopped policy makers from making one promise after another, as if to show that they are in control of the situation.  This graphic from Mint (June 22, 2010) throws light on this issue.

Somewhere down the line, we seem to have lost control over inflation.  Policy makers are caught between showing "better growth rates" so that capital markets don't tank and lower prices expected by the masses.  Today, elections are not there.  Thus, policy makers may think, that the masses can wait and may feel that keeping the capital markets happy is of paramount importance. Policy makers keep making announcements about how inflation is getting controlled or when it will be fully under control.  The media is swallowing and vomitting the policy makers' versions.  The inflation tiger has run away carrying the common man (and woman) in its mouth and the policy makers don't know how to get out of their growth tiger without getting hurt.  There is no satisfaction in knowing that other countries too are facing the same situation.  If I am hungry, I should have food to eat.  Knowing that ten others are also without food, is no satisfaction for me.  It is not going to satisfy my hunger.

Aparajita Sinha & Chandni Gupta point out in Mint (June 22, 2010) that there are indications that inflation is recently spilling over into the manufactured products sector. The big question then: Is the worst behind or ahead of us?  If the capabilities and intentions of the policy makers are any indication, our worst is yet to come.  Too many people are going to get hurt when the growth machine comes to an abrupt halt.  To me, future is uncertain and it definitely looks tense.

A riddle, wrapped in a mystery, inside an enigma

Two articles on the Bhopal tragedy attracted my attention.  One is the article titled "Bhopal’s many betrayals" by Salil Tripathi (Mint, June 9, 2010).

Some excerpts from the article -

The betrayal of Bhopalis is older: It began when nobody warned the city’s poor not to live so close to a chemical plant.

The people of Bhopal were betrayed by factory inspectors who were lackadaisical in checking the plant’s maintenance, which permitted a culture where safety was nobody’s priority.

And then, on that night in December 1984, when political parties were busy fighting elections, the gas escaped from the plant, silently killing more than 2,000 people within hours

Those who survived were betrayed again by their own government, which argued their case poorly while pursuing it in the US. .... Judge J.F. Keenan was swayed by the company’s arguments, and he sent the case to India ... saying he was “firmly convinced that the Indian legal system is in a far better position than the American courts to determine the cause of the tragic event and thereby fix liability. Further, the Indian courts have greater access to all the information needed to arrive at the amount of the compensation to be awarded the victims”.

Right—and that compensation turned out to be Rs74,000 per death, and Rs26,500 per case of personal injury. For, back in India, while the government sued for some $3.5 billion in damages, it then settled for $470 million. The Supreme Court approved the deal, quashing all proceedings.

On Monday, Union Carbide was fined: $11,000. Indra Sinha, who has campaigned for Bhopal victims, and whose novel about Bhopal, Animal’s People, was shortlisted for the Man Booker Prize in 2007, calculates that at 55 cents per death. Sometimes life is that cheap.

Warren Anderson, former chairman of Union Carbide was arrested when he came to India in December 1984.  He was granted bail and he left the country, never to return. Why and how he left the country has remained a mystery.

B.S. Raghavan in his excellent short article titled "A riddle, wrapped in a mystery, inside an enigma" (Business Line, June 14, 2010) throws some light on how Warren Anderson escaped from India (or escorted out of India, depending upon how one views the incident).  

Some excerpts from the article -

Adil Shahriyar, the son of Muhammad Yunus, who was almost a part of the Indira Gandhi family, and a mentor of both Rajiv Gandhi and Sanjay Gandhi, was tried in a US District Court by a jury, and convicted on an indictment of five counts ( including trying to blow up a ship, illegal possession of firearms and carrying them across State borders and drug trafficking) and sentenced in 1982 to 35 years hard labour in prison.

He appealed to the 11th Circuit US Court of Appeals which rejected the appeal on November 21, 1983 saying, “We find that the evidence presented at trial was sufficient to support the verdicts and therefore affirm the district court's (judgment).”

When Rajiv Gandhi became the Prime Minister, it is not far-fetched to believe that he must have come under relentless pressure from Yunus to make the release of Adil from US jail his topmost priority, even if it be by using his position and broaching the matter directly to President Ronald Reagan.

It was just at that time — December 3, 1984 — the Bhopal tragedy shook the world. If Rajiv Gandhi's appeal to Reagan on Yunus' behalf were to succeed, it was imperative to make a gesture that would somehow make President Reagan deal with Rajiv Gandhi's request favourably.

Hey, presto! Warren Anderson is given VIP treatment and allowed to fly out of the country on December 7, 1984 and Adil Shahriyar is granted presidential pardon “as a goodwill gesture” and “for reasons of state” on June 11, 1985.

It certainly was a good bargain to exchange a convict undergoing a 35-year sentence for heinous offences in the US for an American corporate honcho, in order to oblige a long-time family friend.

And so that's how Warren Anderson escapes from India.  The Indian media suddenly woke up after the judgement.  Nani Palkhivala who was engaged by Union Carbide and who said it was gratuitous and slanderous to call the Indian legal system “deficient or inadequate” and who argued that the Indian system was capable of dealing with such a complex case, is dead.  So is Rajiv Gandhi who let Warren Anderson go.  Ronald Reagon who gave presidential pardon to Adil Shahriyar “as a goodwill gesture” and “for reasons of state” on June 11, 1985 is also dead.  Warren Anderson is too old to stand trial and in any case what purpose would it serve anyway after all these years of apathy.

Thousands died due to the tragedy and several hundred thousands were affected with ailments and died a multiple deaths day after day.  Life in India, is cheap, and to quote Indra Sinha it is 55 cents per death.. Other than shedding a few tears of sorrow and praying for the departed souls to rest in peace, we can't unfortunately do anything ...

Quick Edit

From being a person addicted to reading Economic Times, to a person who has stopped reading it... it has been a journey of almost 15 years.  Now Mint occupies that prime space.  Ofcourse, good old Business Line continues to be an important reference source.

While the articles in Mint are definitely well researched and readable, the quick edits are very good too.

On June 7, 2010, Mint carried this quick edit titled "A case of indigestion"

With their palates troubled, investors can no more digest the public sector risk they were so willing to take on a year ago.

Global markets don’t like the fact that they have been forced to digest item after item of bad news. At the end of last week, they had to contend with tepid US job figures and the realization that Hungary’s sovereign default, as a government official admitted on Friday, was a real possibility.

With their palates troubled, investors can no more digest the public sector risk they were so willing to take on a year ago. And policymakers are finally starting to diagnose what the problem could be: their own policies.

At the Group of 20 (G-20) summit in April 2009, policymakers were exuberant about using “an unprecedented and concerted fiscal expansion” to combat the Great Recession. This exuberance officially came to an end on Saturday in South Korea, when G-20 finance ministers decided to drop support for fiscal stimulus.

As this newspaper has argued before, too much fiscal stimulus can be bad for health. India’s leaders should digest the idea too.

I have found Mint's quick edits concise and thought provoking.

The Open Road

Came across this interesting review in Mint of Pico Iyer's new book on Dalai Lama - "The Open Road".

The Open Road, Pico Iyer’s new book about the Dalai Lama, is less a biography than an extended profile. The Dalai Lama has used his prolonged exile to take Buddhism out into the world. He has promulgated a system of “global ethics” that does not rest on a foundation of religious belief or practice and allows the denizens of our shrinking global village to cut across their differences. Thanks to him, Iyer writes, “Tibet and Tibetan Buddhism have become a living and liberating part of the global neighbourhood.”

Iyer notes that the Dalai Lama takes as his political model the figure of Gandhi, a man whose commitment to non-violence and to peaceful resistance brought down a powerful empire. Just as Gandhi opposed British dominion without demonizing the British people, so the Dalai Lama has always emphasized forbearance and the need for Tibetans to look within. But, as Patrick French pointed out recently in The New York Times, “Gandhi took huge gambles, starting the Salt March and starving himself nearly to death—a very different approach from the Dalai Lama’s ‘middle way,’ which concentrates on non-violence rather than resistance.” Iyer acknowledges that as the years roll by and Tibet’s situation remains unchanged, among Tibetans “there is less and less hesitation about criticizing his Middle Way policy and the government deputed to implement it.”

The Open Road closes on a cautiously optimistic note. Iyer observes that no one knew at the beginning of 1989 that by the year-end the Berlin Wall would have fallen, and the Cold War would come to an end, and suggests that something similar may happen with China and Tibet. It is to be hoped that this is so but, in the year of the Beijing Olympics, and at a time when paeans to China’s rising economic power are being sung in many quarters, the immediate future of Tibet appears to be a closed rather than an open road.