Aadhar card- More diligence needed

Passport and PAN were designed as single purpose identity vehicles and yet the sheer number and geographical spread for securing such pan -national identity  entailed decades to stream line their delivery together with highest levels of data fidelity.The Aadhar on the other hand ,was conceived in a multiplicity of  end purposes most of which  were yet to be even identified .Thus it was weak on two counts ; the number was many times higher than say the passport & PAN put together and perfection and effective delivery was expected in less than half a decade  even as it was prematurely loaded e.g to cater to refund of commodity / utility prices after an universal pricing format came into being.Such overloading will continue unless the Aadhar Stage I goal and time frame get fixed.In the meantime perhaps PAN could offer a  temporary platform for DBT  Else an overloaded Aadhar  will discover newer bottlenecks and  greater disillusionment .UID is a good concept but without concomitant excellence in design, administrative support ,oversight and monitoring it goes nowhere. 

.There is a new Army chief in Pakistan and some  changes in the offing  .But  for a  nation  that had been looking inward for close to three decades now,these changes would perhaps remain peripheral and synthetic.With its democracy held in leash by its army for most of its post partition existence, its every single institution  systematically de-rooted and reduced to bonsai, there has been not one event that can point to any simmering embers of  a popular move to pragmatism and progress. Rip Van Winkle must be feeling envious . Pakistan 's foreign policy does not extend beyond its borders . Its ideology is circumscribed by its tenuous relations with India and its economy dependent on big power largess.The Arabs can at least boast of a " spring " but Pakistan remains bound by its deep ethnic hierarchy and divisions.Pakistan has long been  led on a day -to-day basis by circumstances and very seldom by its leaders. Only a major internal upheaval ,for whatever reason,will make the nation sit up , introspect and radically change. Till then Pakistan will be confined to a make believe world of its own ,acquiring a fresh set of PMs,Army Chiefs et al from time to time

Published Pioneer Dec 2
http://www.dailypioneer.com/letters-to-the-editor/shock-treatment.html#

Debt's respectability

With the lever of growth ,the GDP, shortened from 9 % to 5 % the nation's effective economic lift  gets   reduced.The loan market will be the  first sufferer as returns from business would not be able to fully cover loan repayments. Lending institutions ,by their very nature of business are risk prone.No loan can ever be considered absolutely risk free and   today the NPAs, an euphemism for bad debt, seem to form a major chunk..But  traditionally,debt had  been abhorred by  society ,including bankers !. The 19 th century bankers were circumspect and  matched the value of their deposits with their own capital even up to  a 50/50 basis for a near total equity cushion, that was reduced next to nothing as banks  became limited liability companies .They were now free to  assume far greater risk even as they took on more debt to boost their returns. Both risk and reward, exploded in tandem.Modern capitalism then dared to be  more  permissive as banks were  allowed to deduct their interest payments from their tax liabilities .Endless and  unholy  subsidies as these egged on  financial risk-taking. The  Basel framework,assigns a risk weight of zero to government debt of developed countries . That meant that with  hardly any capital, major banks could hold unlimited amounts of the sovereign debt of such nations and yet pass the credit test.The rules that allowed Greek sovereign debt , facing a scandalous 70% loss on the face value, to carry zero credit risk is a travesty .  Both risks and returns have soared under a blue print of western capitalism..But whereas  the risks have  been borne by wider society , the returns  go to  bank shareholders and managers .Debt,once a societal stigma but  today's major  lever of growth, stands  elevated to respectability .
   ( Published Fin Exp Nov 28 )


 http://epaper.financialexpress.com/190853/Indian-Express/28-November-2013#page/6/2

Back to basics

Of the innumerable  serious crimes in the nation,the Talwar's have come into exceptional prominence. And what do we find .Every ' Don't ' of investigative methodology has been scrupulously followed.It requires tenacity and sticking to the basics to investigate and  reconstruct a difficult crime. Perhaps the grounding in forensics of the average police officer remains outdated .The intrusion by media ,the fouling up of evidence at the scene of crime and so on is a result of an unsure chief investigator who is easily distracted and lacks focus and control over the essentials of the many  crime components.If the first team on the scene is found wanting any subsequent investigator is heavily handicapped.This twin murder case was thus substantially  lost to a genuine solution in the first 24 hours itself.What followed was dictated more by extraneous circumstances than intuitive brilliance or forensic acumen.

Esoteric economics of Europe

That modern day economics can get complicated as we go along, is borne out by the very genesis of the European Monetary Union, the catalyst for European integration that brought together 17 diverse economies in a single monetary union; but without fiscal solidarity, a road map to enforce fiscal discipline, or an established lender of last resort. The global dip of 2008 ushered in new problems in the monetary and fiscal planes, for every economy. To stimulate economies, patch-work solutions were attempted by substituting public and private debt for investment. Borrowing against future income and consumption can only sustain short- and medium-term growth. Economies that went for large stimulus spending got caught up in a closed cycle, their balance sheets damaged as demand plunged steeply. Huge deficits then followed in its wake. It opened floodgates for massive capital inflows and unsustainable borrowing in the peripheral economies, most notably the PIIGS nations, accelerating their loss of competitiveness. When the global financial crisis hit, the Eurozone caved in. Countries that have done well around the world have maintained their manufacturing base. Britain, Spain, Italy lost their manufacturing base and ended up badly. Lack of this support base, taken together with congenital structural defects in its monetary policy makeup, the EU was heavily handicapped ab initio. As a result, the global crisis post 2008-09 saw the euro nations with an open licence to borrow generously but with a shared credit card! Since none took the rules seriously, they not only borrowed from their own banks but from each other’s too. Each has been trying since to exist at the other’s expense! As things stand today, though the euro has no enemies, it is disliked by its friends!

   ( PUBLISHED FINANCIAL EXPRESS NOV 26 )

http://www.financialexpress.com/news/letters-to-the-editor-esoteric-economics-of-europe/1199396
http://epaper.financialexpress.com/189917/Indian-Express/26-November-2013#page/6/2

A template for conflict resolution

. The Iran nuclear deal is perhaps an early New Year gift for the comity of nations.Eternal conflict has ever been a trait of human civilization.The Middle East cauldron was kept boiling by the oil & arms lobby for decades on end now. It has taken a liberal leaning US president to be brave enough to break through the cordon. The decreasing dependence on imported oil by the US and emergence of the " Arab spring " could well be a factor for such peace initiatives from either side. Nevertheless  it does credit to leaders across both sides of the divide, to have gone beyond narrow political dictates, for the larger aim of finding peace than the  pursuit of existing or newer contentions.Should this deal go through and sustain ,we would have a proven template for the resolution of many a conflict spread across the globe.The US has also realised that it neither wants nor is able to be the universal policeman and that nations need to come together without compunction, for the greater good.
( Published Busns Std Nov 28 )

 ( http://epaper.business-standard.com/bsepaper/svww_zoomart.php?Artname=20131128aT012101004&ileft=235&itop=1323&zoomRatio=180&AN=20131128aT012101004

  

Third Front-three steps back

The thought of a Third Front is amusing.Where was the "Front" in 1999 when an ascendant BJP heading the NDA,went on to win massively.Or for that matter when Congress led the UPA-ll scored handsomely.The Front manifests itself as and when both national majors are seen to be on electoral backfoot,the current scenario.The front is a medley of smaller parties hedging a leverage of opportunity and riding a vehicle of convenience.As the race of the majors heats up and credible picture emerges,the Front will unwind and its members pick options of their reading.Should both BJP & Congress  fare badly,the Front will reassemble itself to a governing entity,only to crumble shortly later.This has happened before and will recur should the electorate shy away from a decisive choice,one way or the other.Fronts as these push back the nation both in terms of the quality of politics and economic well being.http://epaper.asianage.com/PUBLICATIONS/ASIAN/AAGE/2013/11/23/ArticleHtmls/CONVENIENT-FRONT-The-thought-of-a-Third

Savings fund growth

India’s economic push of the past two decades are largely due to our savings rate that is higher than that of several countries with AAA rating.I But of late, India's household savings  had  dropped to below 10% of GDP, for the first time in 13 years.Moreover, the financial savings of the nation, mostly government owned , are deployed inefficiently. They often provide an average rate of return that barely covers the inflation rate. The government grabs these savings which are supposed to fund healthcare, primary education and old age, to use them in unproductive populist  schemes.On the other hand , even as the much vaunted foreign direct investment and portfolio investments constitute just 5% of nation's gross savings, there is a disproportionate stress to attract external money flow. . It is heartening that the nation is today,re learning the values of savings ,that too  in the more productive and growth enabling mutual funds. A renewed push for savings is overdue.Studies show that growth and savings have a symbiotic relationship.

 ( Published Economic Times ,June 13 )

Lateral vision, a must for nations

In an evolving economy it  is hard  to identify   " the poverty  line " ,which  by nature is dynamic and its constituent factors keep changing in inter-se priority.Today in the US  economy , the element of Health care dominates all else and jobs is the  major concern of the eurozone. Nonetheless  a  fleeting satisfaction  is justified  over  the recent   data put out on our declining poverty , even if from an uncertain datum. . But a call for caution can do no harm. . USSR long endured  Putin’s social contract that had  been trading freedom for security, China  built  up its vast middle class wielding  absolute authoritarianism, our own Left gave primacy to land reforms and  ideology over education and industry .  None of them had pondered over  the poverty line.All are waging an uphill struggle now  ,towards socio-political resurgence and to redefine  the sum and substance of a  state's true well
being.Transient  policy fixations over time tend to be  accepted as  validated tenets .Our present  concept of inclusiveness could turn out to be  narrow enough to restrict  lateral vision, so vital for a nation.An excessive  subsidy /   dole- driven  political bent could  leave  the nation with  a hunch-backed  economy that would rather  stoop   down to  look at  the poverty line,  than be looking up to growth  .  Today, every single national economic index is  drooping and planners,economists and administrators are at a loss to effectively re-rail the economy. Our demographics is heavily dependent on job creation and  without growth even existing jobs would be threatened. The luxury of a subsidised economy that was available at a 9 % plus GDP can not be replicated, at  the ongoing  5-6 % level.

   ( PUBLISHED IN Economic Times ,28 July ) 

Customer is Emperor

The primacy of the customer for a business was never in doubt.It has since captured pre-eminence in competitive business Social networking has now assumed mega proportions and Facebook was the pioneer to latch on to the idea fairly early. Does one start with the goal of making profit, and then find products that enable that goal or start with the aim of delivering amazing products, and then let profit flow from the products.The former aims to maximise shareholder value while  the  latter firmly believes that customers  are key to its future.  What was earlier seen as a reward for serving customers, had by  now evolved into a vision . Facebook  thriving extraordinarily , then strayed and mislaid its aim and thus its vision.It for some reason got into two minds and decided to put profit ahead of all else. It attempted  to pull off one of the largest IPOs with a misguided evaluation out of sheer hubris of spawning countless shareholder millionaires
and leveraging its brand value. The IPO  plunged , only to somewhat  recover later but the damage was done.They unpardonably overlooked that running a social network is today increasingly about responsible stewardship of users' personal information. Facebook   the young and fast moving company  was  cavalier and  lacking
adequate respect for user data privacy. One reason why  attention could be  shifting to the Google Plus ,seen as more trustworthy in safeguarding user privacy.Today's customer is discerning and demanding as well and the likes of Facebook unfortunately still opt to learn lessons,the hard way.

Opinion polls :beyond onions and straw

Much hype has been generated by Opinion polls .Happily though, it has helped us looking into Opinion polls with greater focus.Democratic voting is predicated on informed opinions. It could be through party manifestos or various media.A voter is muchinterested in what is the trend of general thinking and this can not be attempted to be denied to him. That said,there is a distinct differentiation say between Straw polls and Opinion polls.In a two party dispensation the party agendas being clearer and evident ,there is not much of a hiatus between these two variations. In a multiple party set up leaning heavily on endemic local issues,an opinion poll is invariably jacketed into a narrow band of issues and reduced to a straw poll.For a national level election , such polls would always tend to skew away from core concerns.In a six decade old democracy as ours,even opinion polls would need a guided path to travel along and gather increasing significance.We have surely moved past the " onion age " of recording public perceptions. It is time that the EC itself shepherds opinion polls under broad guidelines ,be it specific questionnaires ,spread or scientific representation and so forth, in drawing out opinions. It is imperative that all the stakeholders to a fair election ,warmly encourage opinion polls ,albeit under initial guidance and oversight. In fact ,we may over time as guide lines get assimilated, be even able to step into an era of referenda that has proved beneficial in big ticket course correction for many a progressive nation.Size of our vast electorate should not deter us. nor should informed opinions.
( Published Fin Express Nov 22 )

http://epaper.financialexpress.com/188101/Indian-Express/22-November-2013#page/6/2

Benign snooping !

       Right to privacy,right to the freedom of expression , right of the State to secure its citizens have all suffered or thrived on how it is   interpreted.In 1644, during the English Civil  War, poet John Milton called on the parliament , to bring  to an end the state licensing of newspapers.That notion of liberty of free speech being above all liberties, endured for centuries ,till technology undid all. Julian Assange had his own view on politically sensitive correspondence now it is Snowden on the universal  eavesdropping by US government .Rupert Murdoch thought nothing of hacking into private telephone conversations, voice-mails, sms , yielding  rich dividends for his papers.Today governments snoop under the pretention of  national security being "paramount " over every other liberty !.Even as the  modern netizen twitters his private thoughts, the government strangely argues that conventional sense of privacy may not apply.The two Mumbai girls arrested on 19 Nov 2012 for their personal comments in Facebook ,will testify to it. But the one from Ahmedabad must be the most benign and well intended. No wonder ATMs there are far safer than Bengaluru !

All sound and fury

For a ' party ' conjured out of Anna Hazare and Sunday movements, the AAP has done well.Given that Delhi, a  mere overgrown urban megalith having false pretenses to being a state,a fledgling AAP had  managed to position itself as a  ' party ' of substance. This would never have been possible in a regular State as it has neither the resources nor an assiduously built up cadre to be of reckoning, for larger spreads. With many of the founders washing their hands off on a near daily basis, AAP took to fireworks display with its limited stock of the anti corruption sulphur .Now,some of those rockets seem to misfire in its own  backyard, which  may sadly singe its raison d'etre.  But then,  raw politics often boomerangs and  AAP is new to it. Delhi could now see the usual  elections  , with internal rifts of the BJP and to a lesser extent in the Congress,  broadly steering the outcome.The onus is on the electorate  now,to carry the spirit forward  by retaining  the corruption factor center stage,through to 2014 with or without AAP. Should that happen, Anna would have the last laugh.

  ( PUBLISHED MAIL TODAY NOV 24 )

The extremes

Narendra Modi ,even today,feels insecure of his anointment.BJP in desperation had elevated Modi and in the process left many of its old leaders in disillusionment The first months ,as an endemic Gujarat chieftain,saw him talk of  the  'Gujarat story ' to press himself into the vanguard among his co -contestants. Later, in an effort to assume the pan-India mantle,his  ceaseless and intemperate  attacks on the Opposition and the acidity and needless sarcasm  of his personalised remarks , have only  served to expose his inner anxieties .It would need complete reassurance from within his own party for Modi to emerge as a legitimate and mature national leader, to deal with issues of substance with composure and confidence. This may yet be denied to him unlike Rahul who enjoys more than what is advisedly necessary.The crucial difference  has always been , that in the BJP inner party intrigues are active before elections and in the Congress,after it wins elections.

 ( PUBLISHED ECONOMIC TIMES NOV 22 )

http://epaper.timesofindia.com/Default/Client.asp?Daily=ETM&showST=true&login=default&pub=ET&Enter=true&Skin=ETNEW

THE ELUSIVE BALANCE

The Third Plenum of the 18th Central Committee of the Communist Party of China has inter-alia,resolved to "  foster an inclusive, innovative, and sustainable growth order ".A  Command economy like China, predicated on the power of the proletariat, did touch higher base growth sooner than normal democratic regimes.To  achieve sustained and elevated levels progress now on,individual entrepreneurship has to set the pace.And that comes with a price-greater personal freedom and broader reforms that involve less of the government. Decades earlier, a powerful USSR tardy on reforms saw its  powerful party oligarchs under the Hubris of totalitarian power, ruining the economy and dividing up a  vast republic. China clearly intends to learn from history.At this  bivouac of  reorienting national directions, it could attempt to keep the nation together by a calculated tempering of its " growth-at all costs " policies .But inclusiveness ,political and economic , does not come easy as even Obama struggles over broad based healthcare and taxing the super rich in his  200 year old epitome of democracy.Will China have the patience to seed socio- political  inclusiveness in a soil driven barren for decades by ideological  over saturation,remains to be seen.Our own nation is going through an uncertain mix of growth and inclusiveness, trying to strike the elusive balance between the two!.

          llll       R.NARAYANAN ,GHAZIABAD . lllllllll

( Published Business Standard NOV 21 )

PIONEER NOV 22 http://www.dailypioneer.com/letters-to-the-editor/beijings-challenge.html

TECHNOLGY- THE SUPREME MASTER

.The equation is now no longer between just the manufacturer and his labour and by extension ,the Unions. In fact it is the   human gift of innovation  and the devising of new technologies, that will dictate and subjugate  all . Exploding demand in developing economies and a wave of innovation in materials, manufacturing processes, and information technology are driving today’s new possibilities for manufacturing. From nanotechnologies ,microelectronics , additive manufacturing systems ( 3D printing) and  emerging new materials and methods are set to revolutionise how products are designed and made. The relationship between employment and employability now becomes highly dynamic.The riveter of yesteryear's yielded to the welder and now to robot. The programmer and his computer replaced the comptometrist. Machining and moulding are outmoded by 3D printers.
                             The third player,the state and its political class however has done little to keep up   with the times. They pander to labour to protect historical vote banks rather than work for growing the economy thus ensuring greater inclusiveness for all, lest they be seen as  pro Capitalist   Take the Left leaning France where Jobs in the manufacturing sector are simply  vanishing; 400,000 lost in the past five years.  Its contribution to  European exports of manufactured goods fell to 13.1 % from 15.7 %  a decade ago. Its ratio  manufacturing  /  GDP is the lowest among Eurozone countries: 9.3% , half of Germany's 18.7 . Back home , our socialist leaning and pro-labour  centre, stifled national growth till the reforms era of the '90s and militant trade unionism in  W'Bengal, de -industrialised  the state in just  three decades .For a politician,giving labour lasting inclusiveness through growth needs
time and genuine toil , where as pampering  labour into  returning them to  power even at great national cost, is so easy. As we advance into the future, the labour, the employer and the state must learn to address the imperatives of a galloping technology . They must band together to protect their common stake against this newly emerging  master.Better still befriend him with labour constantly  matching up its skills,  employer  abiding  by bi lateral  agreements and a pro active state that keeps upgrading  educational / training levels and  is alive to changing realities in business and manufacturing. 

 lllllllll      R.NARAYANAN ,GHAZIABAD .       lllllllllll

( PUBLISHED FIN EXPRESS JULY 12 )

Lesson from Detroit

 Detroit ,the roaring city of yesterday, is no more..This was once the capital city of capitalism, the  centre of America’s rise to world power and greatness.In WW-II, Franklin Roosevelt christened the city the ‘Arsenal of Democracy’ as it turned from making Cadillacs and Fords to producing 35 per cent of America’s war production: tanks, Jeeps and B-24 bombers in tens of thousands.We in India are presently   in the midst of growth  as also the pains of the pursuant heavy urbanisation, be it centred on trade,business ,  manufacturing or services.The population density in the emerging city-hubs force a vertical mode of living that  geometrically  pushes  up costs ;land, water and sewerage, transport logistics ,health and hygiene.Cost of running a city can not be left to the largess of a benign government of the day ,that would itself, in time. go under debt. Civic bodies must learn to be self-sufficient.Cost of maintaining civic
services in most municipalities are not matched by civic revenue and in cases like Mumbai despite an ample  treasury , professional management is wanting   as does accountability. Bangaluru is deteriorating and so is Kolkata and may be others too.In a surging economy , the population inflow into centres of boom will remain high and hence, forward urban planning in modules of 10 or even 15 years is imperative and more crucially a civic administration structure that can seamlessly blend and meet increasing load on it .Not the least, a modicum of civic sense needs to be continuously  instilled in the citizens through  education , training and strict enforcement . We tend to smirk at excessive civic oversight on citizens, be it in Singapore or most of the Nordic states. It is time we realise that  for growing cities, discipline  is their   only insurance against premature decline and perhaps eventual demise.

                   llllllllll          R.NARAYANAN



(PUBLISHED IN THE PIONEER 20 SEPT )

Looking for a Casabianca !

In three short  years  we have been hit by an avalanche of  problems . First a sticky inflation, then high  fiscal deficit,an elevated CAD and now an ever dipping rupee value.The economic maze is getting complex by the day and no one wiser for an exit route.The similarity of our predicament to Brazil is uncanny.If this BRIC compatriot's economic boom for much of the past decade was driven by exports of iron ore, grains and other raw materials, mostly to China,we were at a steady  9% plus growth not from raw material exports but by dint of a  broad based progress be it  industries or a global IT  services sector or even positive agri indices.In Brazil,the commodity bonanza caused a surge in the Real and an erosion of the country’s industrial base; a typical case of  the “resource curse”; its  car exports  plummeted,and  overall manufacturing output  fell
drastically .In contrast India under the hubris of having survived the 2008/09 economic tsunami and thriving too, allowed a runaway political philosophy of inclusiveness and administrative recklessness to take over. A heavy drain through subsidies and welfare programmes that bred waste and inefficiency, resulted.Graft and lack of accountability in a coalition set up saw the gains of growth getting frittered away.
                                               A 30 % crash in iron prices this year and wide ranging commodity slide have  stalled recovery and left Brazil with a current account deficit of 3% of GDP. This is an external factor and the scenario could change for the better We are worse as our adverse factors are all internal.Foreign investors are  withdrawing funds due to decreased level of confidence in our economy and the absence of any cogent approach to set things right.Both nations incidentally,have nearly the same FE reserves in their kitty.Brazil ranks 107 in infrastructure,123 for roads, 135 for ports,129 in customs red tape,121 for starting business and 116 for enforcing contracts. Needless to mention that we lag behind on all these World Bank rankings. Given the dire need to pull ourselves by the boot straps from such base levels that cover a gamut of factors be it policy ,planning, effective and quick administration
particularly  our systems of political governance, it is too naive to think that even given  the broadest of shoulders, the new RBI governor alone ,can sustain such a huge burden of this nation.

                                                                                                     llllll     R.NARAYANAN ,GHAZIABAD 

 ( Published Fin Chronicle column of Aug 12 )

Schemes for inclusiveness or consumerism

      For far too long,calculated political skew in the  farmer's incentives / subsidies did  little to improve production or productivity. We now end up in record procurement by the Centre at high support prices with huge grain piles thereof, isolated from the supply chain and rotting away.Despite  bumper grain crops, the retail prices are soaring and thus elevating overall consumer price levels. Inclusive  schemes like MGNREGS have led to higher wages in rural areas which have risen faster than inflation since 2007-08. Fueled by job opportunities in urban construction projects,the rural -urban migrants, sent back remittances flowering a new found rural prosperity.If a third of automobiles are sold in non-urban markets, is there any wonder that rural demand for  vegetable , milk & poultry products would also shoot up. The income-trailing rural/ urban  population has still to make do with onions and
potatoes  and the  contingent price escalation of the tubers, in the overall scenario, seeds bewilderment and anger.Serious structural maladies,in the secondary agro system ,be it reach of productive technology ,storage or efficient and easy sale of produce at the farm -gate,  can not be blamed on climate or middlemen.

 In the depressing mood of economies ,world over,the call of the recent Third Plenum of the 18th Central Committee of the Communist Party of China  to "  foster an inclusive, innovative, and sustainable growth order ", has not received due attention.  Command economy like China, predicated on the power of the proletariat, did reach higher base growth sooner than normal democratic regimes.To  achieve sustained and elevated levels progress now on,individual entrepreneurship alone can contribute.And that comes with a price-greater personal freedom. The USSR ,on similar path earlier, could not act in time and party oligarchs under the Hubris of totalitarian power,not only ruined the economy but dismembered the vast republic. China clearly  is keen to learn from history.At this  bivouac of  reorienting national directions, it may yet manage to keep the nation together by a calculated veering away from blind  growth .But inclusiveness ,political
and economic , does not come easy as even Obama finds in his hoary democratic nation.Will China have the patience to seed socio-political and economic inclusiveness, in a soil driven barren for decades by ideological  over saturation,remains to be seen.

Government Debt - Quality counts more

A government that has its fiscal arithmetic wrong, heads for a packet of problems;nominal interest rates  rise over fear of inflation, business   moves wealth out   fearing   higher taxes, real interest rates  rise and,and inflation shrinks  division of lalabour;and hence, productivity.  Can this scenario  loom over economies with low  interest rates , stock prices remaining buoyant, and inflation remaining subdued. After all, low interest rates  put no downward pressure on public investment,low inflation keeps the extra debt that a government issues  still  prized as having   value, and  boosts economy by deleveraging and  accelerating  spending.Economists are not so sure.They now look at  not  only quantities – the amount of debt that a government has issued – but  key indices.The prices of government debt reflect the rate of inflation ( as bonds are traded  for commodities, cash, and stocks )  ;the nominal interest rate and the level of the stock market. If all three  are in green, it  means  markets would prefer government debt to grow at a faster pace than current forecasts indicate.As a thumb rule, debt at 80-90% of GDP, crowds out conomic  activity.Correlation between high debt and low growth  must  predicate whether the government debt itself is a risk. A  study  of  economies  a) where interest rates are higher and the stock market is lower, and a higher debt/GDP ratio ,does indeed mean slower growth ,b) where inflation rates and govt. debt are both high and c) where growth was already slow, and thus where high debt/GDP ratios  show  that the crux of the issue   emanates from the denominator, not the numerator. It now appears that  there is less  risk to accumulating more government debt until interest and inflation rates begin to rise above normal levels, or the stock market plunges.But much  larger benefits accrue from tackling  inadequate infrastructure, administrative lag and  capacity under - utilisation.This seems to be borne out in  most world economies,today.

        ( PUBLISHED FIN CHRONICLE MAY 27 )

Animating the economy

A nation's economy is driven by entrepreneurship of two kinds ; business and political.The  90's saw the beginning of their convergence under extreme economic stress. From an inward looking nation we decided to take a global view.After just two decades of lift off from a ' Hindu rate '  to enviable  growth levels,the  view now appears to be  misting  .Political economy undoubtedly remains important. Without a clear understanding of who gains and who loses from the nation's collective economic endeavours,it is difficult to analyse our existing policies.  One thing can be said,that today we have managed to suppress business spirits even as the political class is getting less imaginative and dependent on rhetoric. Political systems transform to bazaars when votes and political influence are traded for economic benefits. Minister Jairam Ramesh observed recently that efforts to revive "animal spirits" in industry should be done with caution,while bringing back  enthusiasm in the economy.He is right only in parts.Undue focus on vested interests and their attendant ' animal spirits ',can divert us from the critical contribution that policy analysis and political entrepreneurship can make. The possibilities of economic change , then tend to get limited  by the poverty of our ideas. True economic change will come not when  vested interests are  hounded and spurned , but when our political acumen designs and facilitates  newer  strategies  to gainfully channelise those interests.The famed private entrepreneurship of this nation  awaits rediscovery of this  political genius.    ( published Fin Chronicle Mar 14 )

New problems,fresh insights

.The global dip of 2008 while bringing in new problems gave us newer insights as well. To stimulate economies  patch work solutions were attempted by substituting public and private debt for investment.Borrowing against future income and consumption can only sustain short- and medium-term growth.  Economies that went for large stimulus spending got caught up in a closed cycle, their balance sheets  damaged  as demand  plunged steeply.Huge deficits then followed in its wake. For re- railing growth an evolving  thumb rule is that deficits have to fall within a time horizon of 5-10 years  or else they cause worse maladies :-  a sovereign-debt crisis,  leading to destructive spike in borrowing costs, or a growing burden for the gen-next  taxpayer. There are concurrent concerns as well that need to be addressed ;social-welfare systems, subsidy regimes , demography  driving up costs such as  health care,maintaining  current consumption levels, funding  public-investment shortfalls  to boost growth  and so on.It is difficult to reconcile all of these objectives at one go. Reforms  on tax, regulatory regimes, could  help  restore balance without imposing large additional costs in the public space. But these are not sufficient to infuse the economy with a growth momentum. As a corollary, to sustain current levels of consumption and entitlements without crowding out public-sector investment,  one  must perhaps assume  that the state’s borrowing power to be unlimited. But then ,every nation has its own version of a social compact that defines the rights and responsibilities of its citizens, the role of the state, and the idea of inclusiveness. The most successful public policies and fiscal choices must  rely on adapting to changing demographic, technological  and importantly,intertwined global  factors.
     ( PUBLISHED FIN .EXP APR 20 )

Healthy world trade , a sine-quo-non for global economies

The 2008 global downturn is rewriting our economic expertise  in the realm of monetary and fiscal policies. While individual nations would gladly tap into the advantages provided by  globalisation ,they show reluctance to share common problems of a unified economy.  They do not factor in; the time needed for economic recovery after a financial crisis; underestimation of the the size of output loss owing to primordial concepts of  "fiscal austerity " and  worst of all, the the tendency for countries to drag each other down as their economies contract. When a country’s economic growth slows, it imports less from other countries, thereby reducing growth rates, and  to reduced imports.Global trade has steadily weakened,  almost  stagnant in the last six months. The popular  theory  that exports would provide an escape route from the crisis has failed , as economic growth  stalled with falling import demand from trade partners .The eurozone  is an example, where countries trade extensively with each other and the rest of the world Their slowdowns have significantly  decreased global trade, undermining global growth. In good times, the trade generated by a country’s growth bolsters global growth. But, in times of crisis, the trade spillovers have the opposite effect. While seemingly less ominous  than financial contagion, trade imbalances profoundly influence global growth prospects.  Sadly, policy errors and delays in individual countries  are likely cause greater damage globally, than hitherto understood ,to every economy.
 (published Fin. Express  Apr 26)

THE NEW MASTER

The equation is now no longer between just the manufacturer and his labour and by extension ,the Unions. In fact it is the   human gift of innovation  and the devising of new technologies, that will dictate and subjugate  all . Exploding demand in developing economies and a wave of innovation in materials, manufacturing processes, and information technology are driving today’s new possibilities for manufacturing. From nanotechnologies ,microelectronics , additive manufacturing systems ( 3D printing) and  emerging new materials and methods are set to revolutionise how products are designed and made. The relationship between employment and employability now becomes highly dynamic.The riveter of yesteryear's yielded to the welder and now to robot. The programmer and his computer replaced the comptometrist. Machining and moulding are outmoded by 3D printers.
                             The third player,the state and its political class however has done little to keep up   with the times. They pander to labour to protect historical vote banks rather than work for growing the economy thus ensuring greater inclusiveness for all, lest they be seen as  pro Capitalist   Take the Left leaning France where Jobs in the manufacturing sector are simply  vanishing; 400,000 lost in the past five years.  Its contribution to  European exports of manufactured goods fell to 13.1 % from 15.7 %  a decade ago. Its ratio  manufacturing  /  GDP is the lowest among Eurozone countries: 9.3% , half of Germany's 18.7 . Back home , our socialist leaning and pro-labour  centre, stifled national growth till the reforms era of the '90s and militant trade unionism in  W'Bengal, de -industrialised  the state in just  three decades .For a politician,giving labour lasting inclusiveness through growth needs
time and genuine toil , where as pampering  labour into  returning them to  power even at great national cost, is so easy. As we advance into the future, the labour, the employer and the state must learn to address the imperatives of a galloping technology . They must band together to protect their common stake against this newly emerging  master.Better still befriend him with labour constantly  matching up its skills,  employer  abiding  by bi lateral  agreements and a pro active state that keeps upgrading  educational / training levels and  is alive to changing realities in business and manufacturing.

  ( published financial express july 12 )

FALSE PLUMES OF PHAILIN

What an irony. Man has the capacity to plan and stand up to nature's furious Phailin. So remarkable that out of  10 lakhs affected only 18 lives were lost-one in 50,000 !But  he is unable to face his own fellow men's follies.Pilgrimage disasters are neither the will of God nor the retribution of Nature. The needless temple tragedy in MP resulted in a fatality ratio of one in 20. All vulnerable religious sites would need to be covered under an NDMA genre of protection to the innocent and unwary pilgrims. A list of such places and the standard Operating Procedures must be put in place. The district official (s) accountable must be specified.No point in wearing proud plumes of Phailin, only to be left with mud in the face at MP ,on the same day !
    (published Financial Express ; Oct 15 )

Wayward sentinels of the $

The  ongoing fiscal discord within the US,its $ 17 Trlln external debt and the nearing deadline that could prevent it from servicing the same ,is  not much different but for scale, from the fiscal-economic  travails of other world economies in a stasis,except that the dollar is the world currency.We saw the huge tranche of monthly QE ,on for many months now , playing havoc with cross -currency evaluations across the globe. If the onset of QE was unsettling ,the rumour of its tapering down was more unnerving.If the QE was the invading phase of the monetary Tsunami ,the looming default could be  the receding one.That is the exorbitant privilege of the Dollar  to terribly unbalance ledgers of every nation. Worldwide there are  trillions  in  overnight  repo’s between banks that use US  Treasuries as the collateral for these short term loans. Should these instruments of exchange became suspect and
unacceptable as collateral, financial markets would effectively collapse . Should their value plunge sink, banks capital ratios may go below statutory limits. If there were an actual default then banks would illegally be holding a defaulted instrument as part of their primary capital.The default may not take place at all or even if so,the inundation of global economic shores may remain contained, but  these custodians and printers of the world currency currently  appear to be treating their extremely onerous obligations as cavalierly as an oversize banana republic.Perhaps time that the global exchange gets a basket of mature currencies to replace  an increasingly wayward nation's dollar .
    ( PUBLISHED ECONOMIC TIMES : OCT 16 )

THE THRIVING RURAL COUSIN

 Egged on by the abject days of PL-480,the  ' grow more food ' slogan  brought on a regime of  incentives / subsidies  that sadly  gathered  political overtones with the prescribed  economic / market tools rusting  in disuse.On one hand we have  record procurement by the Centre at increasing MSPs and on the other, huge amounts of stored  grain ,  neither  funneled  to the supply chain nor taken care of , rotting   away.Today  despite  bumper grain crops the retail prices are soaring.
          In the meanwhile,  inclusive  schemes like MGNREGS have led to higher wages in rural areas  and when bench marked to inflation,  rural wages have risen faster than inflation since 2007-08.  Then there is the  rapid intra-state rural-urban migration  fueled by job opportunities in  infrastructure and construction projects in urban areas.  The NSSO data shows that nearly 72 per cent of male migrants from rural areas to other parts of India sent remittances in 2007-08,  to families in rural India, boosting  rural consumption .The rural demand for of vegetable , milk & poultry products  went up sharply,  on this new found prosperity.You can not forever blame untimely rains ,the middlemen  and so on, to explain away serious structural maladies in the secondary agro system.
        The income-trailing rural/ urban  population has still to make do with onions and potatoes  and the  contingent price escalation of the tubers, in the overall scenario, brings in bewilderment and anger. Little wonder that  this ' twin ' has the power to swing elections !. A complete redesign in boosting production of not only the poor man's tuber twins but the entire gamut of perishable food  items, together with storage and distribution mechanism on a national perspective, is a vital and pressing need.  One thing is clear .The problem of the urban consumer and his  rural cousin, is not going away soon.
                 ( PUBLISHED 14/11/2013- BUSINESS STANDARD )
 

 TIME FOR THE GREEN-LEAF REVOLUTION 
The secondary agro products vegetables,milk and fruits have taken CPI to such new and sustained heights that the RBI is forced to stay on at elevated key rates. Never before has this sector taken a vice like grip over the economy.Egged on by the abject days of PL-480,the  ' grow more food ' slogan  brought on a regime of  incentives / subsidies  that sadly  gathered  political overtones with the prescribed  economic / market tools rusting  in disuse.On one hand we have  record procurement by the Centre at increasing MSPs and on the other, huge amounts of stored  grain ,  neither  funneled  to the supply chain nor taken care of , rotting   away.Today  despite  bumper grain crops the retail prices are soaring.
          In the meanwhile,  inclusive  schemes like MGNREGS have led to higher wages in rural areas  and when bench marked to inflation,  rural wages have risen faster than inflation since 2007-08.  Then there is the  rapid intra-state rural-urban migration  fueled by job opportunities in  infrastructure and construction projects in urban areas.  The NSSO data shows that nearly 72 per cent of male migrants from rural areas to other parts of India sent remittances in 2007-08,  to families in rural India, boosting  rural consumption .The rural demand for of vegetable , milk & poultry products  went up sharply,  on this new found prosperity.You can not forever blame untimely rains ,the middlemen  and so on, to explain away serious structural maladies in the secondary agro system.
        The income-trailing rural/ urban  population has still to make do with onions and potatoes  and the  contingent price escalation of the tubers, in the overall scenario, brings in bewilderment and anger. Little wonder that  this ' twin ' has the power to swing elections !. A complete redesign in boosting production of not only the poor man's tuber twins but the entire gamut of perishable food  items, together with storage and distribution mechanism on a national perspective, is a vital and pressing need.  One thing is clear .The problem of the urban consumer and his  rural cousin, is not going away soon.

The players and public and even a govt.are entitled to hero worship but not the true scribe of the game.Cricket has spawned writers of every shade for an aeon now. Neville Cardus( 1888-1975 )is still being hailed in the literary world of the game as he was as much a writer as he was a critic. His imagery and a suave flowing language apart, he could be a merciless critic.To him the game mattered more than the  transient,even if brilliant, players of the day. And though he too was soft on his heroes,but never had second thoughts on pulling them up on faults.Today,true critics of the game is a vanishing tribe. The last two weeks of 'test 200 ' overdrive saw identical paeans sung  by every writer,in every paper.Wish we too had a critic, who at least on the eve of the Wankhede event,would give us , the key failures that propelled Sachin to greater heights and  which were no less significant than his successes, in this phenomenal career stretch of 24
years.A true Critic is like a diamond cutter. He unsparingly grinds  it to give that gleam which makes it a jewel

Aam aadmi knows his onions and potatos !

The ubiquitous tubers ,potato and onions, have had a larger than life role in the nation's politics.Onion prices have been an important political issue: they were regarded as the decisive factor in the 1998 state elections in Rajasthan and Delhi   and were responsible for bringing down the central government in 1980. The potato tale is not much different.When the Anna Hazare movement was at its peak in August 2012, potato prices were climbing the roof and the protest rally over Jan;okpal Bill  at the Ramlila Ground in Delhi was bursting its seams. In Dec  2012, the supply far outstripped demand and potato were strewn on the streets and Anna's follow up rally at the MMRDA ground , Mumbai had no takers. The aam aadmi knows his potatos and onions.The common man in India has no lofty desires and is literally grounded to earth.If currently Delhi is agitated over onions,  it is the potato that is emerging ( or not emerging ) , the issue. If Didi has taken on bolder methods to tackle the situation at Kolkata, there is little to fault her. The twin tubers not only rule the kitchen of the aam aadmi but his heart as well. This just can not be wished away