Looking forward to 2014

And thus 2013 has turned from 'is' to 'was'....
Cherish the joys, however small, you had in 2013.....
Forget the failures, pains, disappointments 2013 gave you......learn and grow strong from them.......

In 2014,

Read more, at least one book every month
Learn something new
Work hard
Spend money wisely
Listen to music
Travel and see new lands
Pray, pray, pray....

May God keep you healthy.......!!!

Wish all my friends a wonderful New Year 2014....

 

And, being an Indian Public Sector banker, my additional wish-points are:

 

May the NPA woes ease out

May my Bank's market capitalization jump & it become the numero uno Bank by value in India

May our salaries get a raise! [wink, wink!!]

Companies Act 2013 & Bankers - 1

Ministry of Corporate Affairs has notified the implementation of 98 sections of the Companies Act 2013 vide a notification dated Sept 12, 2013. The corresponding sections of Companies Act 1956 have since been repealed too.

The new Act is set to usher in a new regime of transparency and rule-based governance in the country.

A few sections of the Act have enormous implications for lending institutions in credit administration.

I thought I'd jot down a few of the features in a series of entries in this blog and think aloud on the implications for Banks. Hope it'll be useful to all.

Sec 2(57) says that “'Net worth' means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation."

Issue: Credit Balance in P&L Account has been left out. The “Highlights of the Companies Act 2013” brought out by the Institute of Chartered Accountants of India also points this out. Should Credit Balance in P&L Account be left out by Banks while computing the Net Worth of companies henceforth? If so, the leverage ratio will move up.

The new Companies Act has withdrawn many of the privileges and exemptions that were available to Private Limited Companies - e.g. Special Resolution is necessary for borrowings “exceeding aggregate of its paid-up share capital and free reserves” u/s 180; under section 293 of the erstwhile Act, this limit was applicable in a different manner and that too for public limited companies only.

Issue: Special Resolution would now need to be obtained in case of Private Limited Companies too, who form a large part of the borrower universe of banks, failing which the borrowing would be rendered unenforceable unless bona fides is proven! And, Indian judiciary often do not take a kind view on lapses from banks.

20 years of a new sound....20 years of A R Rahman

Today [Aug 15, 2012], it's 20 years since the release of the Tamil Movie 'Roja' which marked the debut of A R Rahman who has gone on to win 2 Academy Awards (Oscars) apart from a multitude of other awards.....well, reams of papers and Giga bytes of data have already stated the kind of impact he has had on the music scene, and on a music lover, and I do not intend to add to those. Instead, I'm trying to recount the effect he and his music had on me...

I do not recall when it was exactly that I found the connection between the name ‘A R Rahman’ and the kind of music I used to like, but I think it was in my Class 8, after listening to ‘Ooh La La La’ from ‘Minsara Kanavu’ that I decided that I have indeed become a ‘fan’ of this man’s music. Till then, through 1992-1995, though I had been finding songs from ‘Roja’, ‘Gentleman’, ‘Duet’, ‘Kadhalan’, ‘Bombay’ and ‘Rangeela’ (I had not heard tracks from films like ‘Puthiya Mugham’, ‘Thiruda Thiruda’, etc till much later) likeable, the attention I used to pay to his music (and later, his persona and the values he stands by) grew thereafter only.

Grew it did, and how!

It cannot be easily expressed in words – but everyone aged 4-15 in 1992 will be able to relate to it; let me make an attempt, though.

The period from 1996 is what I’d call as the ‘golden age of my fanboy-ship’ – replete with instances like the following:

• Incessantly arguing with my friends about how AR’s music is better than anybody else’s: This tempered down after I watched AR on Simi Garewal’s show wherein he mentioned “Appreciate good music”; and I stopped arguing after he won Oscars – one, coz by now almost everyone I’d meet had at least one AR song among their favourites and two, I began to appreciate the fact there’s absolutely no use in trying to convince anyone about that, coz I can spend that time in listening to his songs.
• Spending time on listening to whatever his I could lay my hands on: This ‘laying my hands on’ meant the (original) cassettes my parents would occasionally buy for me from my Class 10 onwards, those I would (sometimes, beg and) borrow from like-minded friends, etc. This sort-of ‘graduated’ to mp3s after I got a PC, (back to Original) CDs after getting a job, and now, legal mp3s from ‘Flyte’ at flipkart.com
• Rote-learning the details in the inlay cards of cassettes and thus have all details of his tracks at my finger-tips: The important, positive fall-out of this is that I learnt the names of a variety of musical instruments and this would make me try to locate the instrument in the songs I’d listen to; this further made me realise the intricate layering AR adorns his songs with. Later, I also learnt a lot about the music-making process in vogue today – to the extent I once used to say that ‘Neve 88R’ is my fav mixing console, though to this day I have never been to a recording studio!
• Reading all his interviews wherever they’d appear: initially it was in print, and now it’s all digital. Interestingly, from the time I developed a keen interest on AR’s works, it now seems that that the universe conspired to further that interest of mine – without much effort on my part, these would reach me! In the early part of the last decade, I came across the AR Fans’ group on Yahoo! and since then, collecting the trivia on him and his works has become a breeze.
• I fell in love with Flute, Veena, Piano, Cello – well, all those instruments AR used in his songs.
• Liking and adoring all those singers who sang for AR and being bowled over by how they used to be at their versatile best when with AR.
• Developing a keen ear for the background score of movies and revel that AR’s BGM scores are the best.
• Trying to figure out which all ads of late 80s had AR’s music; plus, trying to identify all those non-AR songs [in the 4 South Indian languages] of late 80s and early 90s that had the un-mistakeable AR touch in them (coz AR as Dileep had worked as keyboard programmer for all the leading composers then). It turns out that many songs I had so noted as having the AR touch in fact had his involvement – this gets revealed in the interviews / talks given by people associated with those films and I feel proud that my instincts were indeed right!
• Occasionally feeling that AR’s position is under threat when some new composers came along – fed by some stupid write-ups, of course. But, AR kept surprising me through his songs; the said other composers surprised too, by their very short stints and shelf-lives, repetition, arrogance, lack of versatility, etc. I grew out of this insecurity after his Oscar wins. Well, no composer in India now is that versatile, as AR is.
• Looking forward to every new soundtrack release of AR and being a part of whatever little hype is there for it (most of AR's films are notorious for low profile marketing).

So, what were the other impacts on me? Let me recall a few.

The more I read about AR, the more I liked his personality traits – the important ones being Humility, Hard-work, Spirituality, Patriotism, Tolerance, Courage to tread the path not taken (Risk-taking), Loving one’s family and Treating one’s job like worship. These traits, I believe, everyone needs to incorporate into their lives.

Learn to accept variety and heterogeneity – not just in music, but also in everyday lives. There is the need to be open-minded and also keep our expectations low.

Being ‘open’ means, I now listen to other composers’ works too and also develop a liking to a few of them – but, after every such bout of 'Other Composers', ultimately I return to AR’s fold;  like they say about having food from hotel once in a while, but being too fond of that cooked by our moms!

There’s no end to it if I were to start writing / speaking about AR, but time constraints prevent me from going the whole hog now.

So, on this special occasion, let me thank you AR – for bringing tonnes of joy to millions of people thru your music. May God shower his blessings on you and your family and continue to inspire you to compose soulful tunes.

Like every AR fan knows, it’s difficult, nay next to impossible, to name just one fav AR track – still, if you were to ask me to name just one song of AR that gives ultimate peace of mind, I’d recommend ‘Silent Invocation A’ from 'Connections', a non-film album of his. But, do listen to ‘Himalayas’ from the same album too....!! Yes, it’s difficult to name just one!

As a closing note, let me also add that, AR featured in one of my job interviews also – towards the end of one, one member of the panel sought to know what my hobbies are and I blurted out, “Listening to AR songs”; the next question was “What’s so special in his music?” and that was his mistake! I talked on end for the next 10 min or so on this!! The panel rounded off the interaction saying, “Pucca Rahman fan!” Yeah, they haven’t met the others!

Short takes - The Coal India Ltd's dilemma

Last week, by a Presidential directive, the Govt of India advised (or arm-twisted, depending on the way one views it) Coal India Ltd [CIL], a GoI-owned listed company to enter into long-term Fuel Supply Agreements with Power Producers - to supply at least 80 percent of the requirements of these power producers - who have been troubled by the prospect of having to cope with sudden price spikes and even non-availability of coal. The decision has been in the line of fire from a number of quarters, starting with the CIL's own Independent Directors and other investors, prominent among them The Children's Investment Fund, Coal India’s largest foreign share holder, which recently initiated legal action against the government to protect its investment in Coal India.

The decision has been sought to be justified ostensibly with the public interest angle brought in, saying guaranteed coal supplies to power producers is vital to ensure the latter's viability given the unexpected spike in coal prices in international markets. Coal prices are currently ruling above the levels they had projected while bidding for the Mega projects. The FSAs effectively will ensure that the power producers are insulated from price changes of coal, but CIL will have to supply coal to them at the agreed price (at a deep discount to market price), either from its own production or by buying from the market. The latter scenario now appears highly probable, as CIL has not been able to add to its capacities due, again, to governmental restrictions on mining. Thus, we now have a situation where a company has been forced - through a government diktat - to supply its produce at below-market prices to a group of predominantly private sector players (NTPC is a beneficiary too), who had engaged in competitive under-pricing at the auction stage. The price risk has thus been willy-nilly transferred to CIL, whereas ideally this price risk ought to have been factored in by the power producers while bidding, either through hedging or through appropriate pass-through clauses in the Power Purchase Agreements they signed with the Power Distribution utilities. The audacity with which a few players threatened to stall work at their sites lest assurance on fuel supply came through was to be seen to be believed!

Only time will tell the impact of these FSAs on CIL's bottomline, if it is not able to augment its capacities soon.

Budget Wishlist 2009

My wishlist regarding the Budget proposals:

• The budget should bring forth clarity about the taxation aspects of Limited Liability Partnerships [LLPs]. This will help foster their growth, especially since it is a better and less expensive form of constituting a business.
• The New Pension Scheme, introduced recently, has not caught on, more so since it's on EET model. The FM needs to seriously consider the suggestions to bring parity between NPS and other savings schemes like PF etc. Otherwise, this very efficient and people-friendly scheme will be left without many takers.
• Another aspect which needs the FM's serious attention is the issue of pricing of petroleum products. The prevailing method is quite messy and lacks transparency. The earlier this is resolved and fine-tuned, the better for the fisc.
• This brings us to the topic of fiscal discipline. Even as there is the need for the state to step up its own spending, it needs to be seen that fiscal deficit does not turn out of control. Towards this end, stake sale of profitable PSUs is advisable. At the same time, to put more money into the consumers' pockets, tax breaks like raising the exemption level and/or restoring Standard Deduction are necessary. To raise revenue, dividends above a certain threshold limit can be brought under the tax net.
• The Govt needs to move forward on the path of introducing Uniform GST. For this, FM should present a road map towards adoption of GST and abolition of CST.
• Development of our creaking infrastructure is critical to ensure sustained growth. To raise revenues for these long-gestation projects, a vibrant bond market is vital. The FM should introduce the necessary reforms for the development of our bond markets.

And, he wins it!!!

A R Rahman wins the award for Best Original Score at the 66^th Golden Globe Awards, beating stalwarts like Hans Zimmer, John Howard & Clint Eastwood. Way to go, ARR!!! Jai ho!!!

The Mithya of Satyam; aka the Satya(m) of a Mithya!!!

Mithya --> Illusion

Satyam --> Truth (also, the name of the now infamous IT company)

It was with great disbelief that I heard the story of Ramalinga Raju's confession. In fact, till I read it, on the web, I didn't really grasp the enormity of the fraud. Now, his confession has showed us the 'Satyam' behind a number of 'Mithyas'. What are they?

Till recently, almost all write-ups on the economy and business environment had repeatedly pointed out that we have great / impregnable systems and checks in place and the absence of any major scandal after Ketan Parekh's proved that. Who could have guessed that a gigantic one was taking place right in front of us, without anybody knowing about it? It's next to impossible that the auditors and key finance personnel in the company could not find this out. Just the CEO & CFO managed to pull it off and that too for a number of years? No way, I'd say.

The fiasco showed us, again, that auditors, if not all of them, are hand-in-gloves with the perpetrators of frauds. However tight the auditing guidelines & accounting standards, if one is creative enough, fudging is incredibly easy. To find gaps, given the current technological advances in book-keeping & complex business processes, auditing professionals need to be highly skilled; we have a long way to go in this respect. Revenue recognition norms, especially for those firms in service industry, need a relook.

With Enron went Arthur Anderson; will Satyam episode lead to black-listing of PwC, given that it was already under the scanner for its role in the failure of GT Bank? No chance, if one were to look at the utterances from ICAI functionaries; they say action will be taken only against the partners and not the firm. Yours truly once had a great deal of admiration towards this firm; no longer it remains. A valuable lesson is that, being big is not a guarantee against failure; in fact, as you grow in size, stronger measures to manage operational risks are to be put in place.

Independence of independent directors is to be ensured through new means. One feels that, for companies which fulfil certain criteria in respect of their assets / market cap, SEBI should be the body which appoints independent auditors, so that, the independence is fully ensured.

Listed companies carry an aura of transparency with them, and subsequently, lower risk premia are attached to them. It is assumed that fear of a market backlash will prod them along the path of self-regulation. Raju's confession tells us that it was his fear of such a backlash and takeover attempts that made him cook up the figures! That is a direct barb at the short-termism of market participants. In fact, one is tempted to say that we are living from quarter to quarter. The behaviour of markets soon after the announcement of quarterly results is too wild nowadays; the stock is battered, even in case of growth, if the growth is not as per analysts' predictions and no thought is given to the long-term prospects of the company. Such an obsession with the Q_n figures needs to be restrained.

One's heart goes out to those investors who bought into the Satyam stocks on Jan 7, before the story broke. Who will compensate them [that is, the ones who have not yet exited], as well as others who invested in shares of other companies and suffered losses from the market meltdown that followed?

What needs to be done now?

• Speedy investigation, trial & justice
  
• Tighter regulation
  
• Revamp of audit practice – it's time competition is brought into the auditing profession; the ICAI's monopoly over the same is not good for the profession and the country in the long-term [yes, I'm an interested party here; but that does not dilute the logic of this line of thought].

What’s cooking for 2009?

Now, this – how 2009 will pan out – is a question that's been 'analysed' in many fora already. So, yours truly would desist from doing it. In fact, my mind wanders and seeks answers to a number of questions... Again, that is something my mind always does. For a change, I'll jot down a few here...

Governance

When will we, Indians, have a well-functioning government in India? We have an elected government, yes; we have a functioning government, yes; but, we lack a well-functioning one – an accountable one. Agreed, there cannot be any govt which satisfies all people's aspirations; however, every party in India always utters food, clothing and shelter for all. It's indeed a matter of shame that even after sixty years of getting independence, we're nowhere near the goal of a minimum standard of living for our billion-plus population! Moreover, where was our government when a handful of terrorists, like rabid dogs, audaciously kept on planting bombs and attacking innocent civilians in different parts of the country? While not a day goes without blaming the rabid terrorists and the nation which harbours them, what firm action has been taken to rout them? Again, where was the govt when hundreds of farmers committed suicide due to mounting debt? Apart from destroying the 'debt-repayment culture', what did the much-publicised farm debt waiver scheme achieve? Given that 2009 is an election year, will we finally elect a government that performs well? Or, are we destined to get one more lame-duck ministry?

Economy

Everything was honky-dory till the US economy sneezed and ours caught pneumonia! Pray, how long can we keep blaming the global economy for our woes? When the fruits of globalization took time to reach the masses due to inefficiencies in our system, globalization was blamed; it is being blamed again when the economy is facing a downturn. In 2008, the RBI tightened the strings too much and too early, thus jacking up interest rates; it's doing the same thing in reverse now – too much and too fast. By releasing an estimated Rs.300000 Crores within a short span, ignoring the money multiplier effect, and relaxing many rules together – e.g., special finance facilities for NBFCs etc – is the stage being set for the enactment of a desi version of the sub-prime drama? How much of the currently perceived slowdown in our economy is due to our own creation? And, any news about investments for improving our infrastructure?

Corporate Governance, Financial Markets

No, it's not about the Satyam imbroglio; it's about credit rating agencies [CRAs] and mutual funds [MFs]. It's time a new system is put in place to ensure independence of CRAs' job – rating the public issue of debt / equity capital. From the 'issuer-pays' model, we should move to 'regulator-pays' model, ensuring at the same time that there is no patronising of any particular CRA. As for MFs, one cannot fathom why listed companies [are allowed to] invest in them. Two reasons why they should be kept out: one, the companies, especially the listed ones, [can afford to] have professionals to manage their fund flows and to optimise cash flows and two, MFs were conceived as a mechanism to allow retail investors who aren't finance-savvy to reap the benefits of participating in equity markets. One feels that the kind of redemption pressures Indian MFs faced in Oct 2008 could have been avoided, to a great extent, had companies been kept out.

The bottomline is that, instead of being garrulous, our so-called leaders should now take firm action to help India emerge stronger from crises; and the people, too, should take an active and renewed interest in nation-building. Jaago re!!

2009.....

Thus, a new year had dawned, bringing with it hopes - of a peaceful world, betterment in economic fortunes [blame it on the business confidence gone into a tailspin ;)], better work-life balance, and above all, the ability to fulfil promises made to self!!!!

Happy New Year!!!!!

Musings on new FY

A new financial year (FY 2008-09) dawned today, in India. There are hopes as well as fears about the same. How will the new FY pan itself out? Even if one goes by the trend as in previous years, this time around, the scene is a bit confounding and confusing for all stakeholders. The beginning of an FY is important to me on a personal front too, given my job.

 

The thing that is foremost on everyone's mind is inflation. The WPI-based inflation rate is far above RBI's (as well as common man's) comfort levels. And, it is a politician's nightmare, especially when elections are round the corner. For the time being, let us not think about the response - it is most likely to be a rate hike. What could have led to this sort of an inflation?

 

Basically, it's the primary food articles including wheat, rice and pulses whose prices have risen. As a World Bank study put it, the price rise is a global phenomenon and is due to a variety of factors, including higher demand from India and China...

 

What is ailing India's agri-sector? Everyone knows it and it has been very well-documented too.....but no action has been forthcoming from any quarter to reform India's 'core business'. The latest example of inept handling of agri-sector issues is the banning of exports of rice, except the basmati variety. Yes, to rein in domestic inflation, such a measure would be necessary, only as a last resort. Think for a moment about the farmer as a businessman. Would it be fair to dictate to a businessman not to sell his produce at a price it commands, wherever it is?

 

Even more ridiculous happenings are unfolding in Kerala. There is a bumper crop, but there are not enough farm workers available to harvest the same. The CPI-M- affiliated farm workers' union is opposing and resisting usage of harvesting machines. An unexpected and heavy summer rain came and the crop is literally in the water!! Bumper crop is now 'no crop'!!! A few farmers have taken their lives, but again, there are only empty promises. Blaming the summer rain, all ministers are happily attending the CPI-M party congress in Coimbatore and are proudly showing off to the media their latest member - director Mani Ratnam's son!! These are the real Neros of today........

 

The measures announced by the government, ostensibly to combat inflation, seem more like knee-jerk reactions. More concrete measures to set the supply side alright, or rather, to ease the supply-side constraints need to be there - till then, the problem of inflation will surely not go away.

 

When you look at the monetary policy response that is going to be out soon, as I said before, it may be a rate hike and some associated measures; whether it is going to solve it all, one needs to wait and watch. A rate hike will widen the interest-rate arbitrage and put more pressure on the INR. The problem may be compounded due to lack of a developed bond market. More curbs on ECBs are likely and it will affect the corporates adversely. Though the 'India Growth Story' is intact, it may drive down the stock prices.

 

As for financial reforms, it is best forgotten in the new FY. Those opposing reforms now have a 'point' - the reckless lending, complex financial engineering stuff and the consequent slowdown / crisis in the US are now a potent weapon in their hands. Also, elections are coming up and so, reforms, RIP for a year!!

 

The bottom-line is that strong fiscal measures are needed to avert a real slowdown in Indian economy; will they be forthcoming in an election year?

Budget 08-09 - What's the big !dea?

And, Finance Minister P Chidambaram has presented the budget for the year 2008-09. Lots of bouquets and brickbats......yes, but what is the bottom-line?

 

The two things that dominated all discussions seem to be the farm debt waiver plan and the substantial relief for the salaried class..And, therein lies the big idea, at least to me.

 

Almost all people know that even as growth rates are moving up, agriculture continues to be the laggard. Yes, farmers are in distress, the farm sector employs more than 60% of our workforce and with each passing day the farmers are finding it more and more difficult to continue with farming. But, debt waiver is a patently wrong idea in that it sends out a wrong message to the borrowers - "do not repay; the government will waive it" - as well as the lenders (mostly banks) - "Give them loans; we will give it back to you". It may be OK with public sector banks, but what about the private banks? How can the government dictate to them how to lend and waive debts? What happens to the net worth of the banks and ultimately the country?

 

Again, who are going to benefit from the scheme as is proposed? Farmers' miseries are caused, inter alia, due to their borrowals from the informal sector, at usurious rates of interest. But, the waiver announced now does not cover these borrowings. Add to that, there are several "Conditions Apply" tags - you have to be small farmer, having the specified area of land, borrowals upto the specified date, and so on. Doesn't misery / drought strike uniformly? Why these restrictions, then? There is also the news that the bulk of the amount will go to the co-operative banks! We all know the set-up in co-operative banks - it's the petty politicians' goldmine. Rather than letting the money go down the drain, the Rs 60000 Cr estimated as the waiver amount (how did he arrive at that 'magical' figure, by the way?) could be better deployed in developing agri-infrastructure.

 

Again, surprisingly, no resources have been allocated for this plan. The Finance Minister says he is intelligent and that he will soon spell these out. One hopes he does it soon! What about raising the money through disinvestment in public sector undertakings? Go and list PSUs like BSNL, MTNL, LIC and further stake sale of other listed PSUs? After all, Economic Survey also suggests it. Left too will not oppose it! "Disinvestment for farmers' welfare" - this is the 'big idea' for me!!!

 

The income tax incentives, in my view, were long overdue. But, the FM could have hiked the savings limit u/s 80C to something like 1.5 lac. But, the FM seems to have an ace up his sleeve - he may be believing that what he gives away by way of raising the exemption limit and change of slabs, he is going to get it all back (and may be more) once the 6th Pay Commission submits its report and it is implemented!! Another 'big idea'!!

Timeless....but attempting to restart!

There was a time when there was time in one's hands - one could talk for hours on end with friends sitting in front of you or at the other end of the mobile, one could listen to one's fav compositions without any fear of time being lost and most importantly, one could spend as much time as one wanted to dig out the necessary info for one's blogpost and post a post. Wah!! Kya times dhe woh!! But now, 3 months into the first job, yours truly is truly bewildered by the pace at which time is flying away. Yours truly is horrified to find no blogposts being made for a considerable period of time. Most importantly, this blog has completed a year, but there's no time to review and ruminate about the same either!

Rupee continues to rise, stock markets are dancing to some unknown tunes, inflation is low but still a threat, elections to ICWAI council are over with not much noise after that, the government is dilly-dallying with the N-deal, attacks against Reliance Fresh stores in some parts of the country, everything in Kerala is worse than ever, ARR's 'Sivaji' music continues to rock and he completed 15 years in the industry - but, this blog missed all those.....

But now, an attempt is being made from today - to rejuvenate this blog and to continue my ruminations on issues that interest me......

Book Review: Ignited Minds

Being away, off the cyber world, resulted in my not being able to blog...The following is a book review that I was asked to do while being away from home.....At the outset, it needs to be disclosed that I'm not very good at reviewing books; again, the book that I got to review, fortunately (for me) and unfortunately (for the readers and the stature of the book as well as its author) is Ignited Minds, by Dr A P J Abdul Kalam - one of the finest sons of India. This is the first book review I did and yes, I'm loving it, too.....Read the review and give your valuable feedback....All mistakes and shortcomings are mine and mine only.......

//Born in 1931 in humble backgrounds, Avul Pakir Jainulabdeen Abdul Kalam rose to become the President of India in 2002. The post of Indian President got a new meaning during his incumbency. In many ways, he was a ‘hands-on’ President and thus came to be rightly called the ‘People’s Prez’. It’s not that Presidentship alone is his claim to fame; even before assuming the highest office in the country, he had held several high-profile posts in ISRO and DRDO and was also the Principal Scientific Advisor to Government of India, holding the rank of Cabinet Minister. He is the ‘missile-man’ of India and was the driving force behind India’s second nuclear test in 1998. He is also the recipient of the highest civilian award in India, the ‘Bharat Ratna’.

Ignited Minds: Unleashing The Power Within India continues the trajectory of thought taken up in two of his earlier works, Wings of Fire and India 2020: A Vision For The New Millennium. The object of this work, according to him, is to ignite young minds so that India turns into a developed nation by the year 2020. Dr Kalam places enormous trust on the power of India’s youth to make a difference and fulfil his vision of a developed India. The narration is in the first person and the language, simple and lucid for everyone to understand. The book is organized into nine chapters and is peppered with Dr Kalam’s own rich experiences, which makes it all the more delectable.

The book opens with the statements that Dr Kalam makes every youth he interacts with take as a sort of pledge: "Dream, Dream, Dream; Dreams transform into thoughts; And thoughts result in action". In a way, this is the essence of what he wants to convey to his readers and his countrymen at large. He talks about the power of dreams and says that spirituality has to be integrated with education, focusing on self-realization.In the second chapter, he recollects the interactions he had with children in different parts of India. He reiterates the need for the right kind of role models for the youth of India. A role model can provide answers to many questions children have as they grow up.

It is a vision that inspires minds and fires action. In the third chapter, Dr Kalam devotes considerable space to discuss the vision and achievements of illustrious sons of Mother India in fields as diverse as astronomy, mathematics, physics, space science and entrepreneurship. He briefly touches upon the lives of Aryabhatta, Brahmagupta, Bhaskaracharya, Ramanujan, Sir C V Raman, Prof S Chandrasekhar, Dr D S Kothari, Dr Homi J Bhabha and Dr Vikram Sarabhai. He also fondly recalls his association with Prof Satish Dhawan and Prof H A Yefremov and his meeting with the milkman of India, Shri Varghese Kurien. Certainly, all of these personalities have served as role models for Dr Kalam. In this exercise, he shows remarkable awareness about, and respect for all of them. In between, he also shares an interesting anecdote about how he and his team were able to get the necessary space to locate the rocket launching centre at Thumba in Thiruvananthapuram, buttressing the fact that science and religion are not mutually exclusive.

It is then a smooth take-off to the next chapter where Dr Kalam impresses upon the reader, the importance of spiritual development. An important observation he makes here is that the unification of science and spirituality is essential to take the benefits of science and technology to the mankind. He recounts his visits to, and meetings with, Pramukh Swami Maharaj of Swaminarayan Sanstha at Ahemedabad, Dargah Sharif of Sufi mystic Kwaja Moinuddeen Chishti, Mata Amritanandamayi, Ramakrishna Mission, Kanchi Shankaracharya and Sri Sathya Sai Mission and shares his learning and experience from all these visits and meetings. According to him, the vibes and mental peace one gets at these places is one and the same. Dr Kalam says that we must draw upon our heritage and wisdom to enrich our lives.

In the next chapter, Dr Kalam notes that unfortunately for India, historic forces have not given a common memory to all communities by taking them back to their roots a millennium down the ages and that not enough effort has been made in the years since independence to foster that memory. This has led to divisive forces rearing their ugly heads at times. He calls for a patriotic fervor that transcends politics and religion. He cites A R Rahman’s Vande Mataram as an example for this.

In the chapter aptly named ‘The Knowledge Society’, Dr Kalam puts up a strong case for India becoming a knowledge society and regaining the status it had enjoyed in the ancient past. He puts forward the idea of PURA (Provision of Urban Amenities in Rural Areas) for rural development, which is the need of the hour. In the next chapter, Dr Kalam lays down five areas for integrated action viz., agriculture and food processing, power, education and healthcare, Information Technology and the strategic sector. According to him, action in these five areas, properly integrated, would lead to food, economic, social and national security. The rest of the chapter is about how to align and co-ordinate action in these areas for the nation’s development.

The need for value-addition in the activities performed in our country is very well brought out in the next chapter, wherein Dr Kalam cites the case of beryllium diaphragms. This is relevant in current times too, where the rising Rupee has made the stakeholders realize the need for value-addition in our exports. Again, he calls for integrated efforts in mission mode for rapid development. In the last chapter, as in the first chapter, Dr Kalam urges us to dream and work towards making India a developed country. He prays to God Almighty to give us Indians the willingness and ability to toil hard. He ends the book with a Song of Youth, the theme of which is "Small Aim Is A Crime".

In this book, Dr Kalam laments the fact that despite all our skills, resources and talents, we Indians often tend to settle for mediocrity in everything. He also firmly believes that Indians have the potential and wherewithal to rise and realize the dream of a developed India. He has tried to show a way to fulfil this dream, by taking up different themes and tying them together with success stories to serve as motivation to everyone. Through this book, we see in Kalam the ideal Indian citizen – one who is proud of India’s glorious past and traditions and works in the present to make the future bright and exciting. Ignited Minds is a book that should be read by all self-respecting Indians, especially the youth who are the future of India and for whom it has been written. Definitely a must-buy!!//

Organised Retail - Again

Yours truly had written about the sunrise sector of organized retail twice before (here and here). It wasn't a complete account in any case, but what has prompted this entry is the discussion on the same on the Management Accountant Blog and the strike on June 27 by the organization of small traders (the Vyapari-Vyavasayi Ekopana Samiti) in Kerala against the entry of retail giants [Interestingly, the processions by striking traders in Kochi were led by the same {leftist} politicians who inaugurated the new Reliance Fresh stores in Kochi; so much for commitment to a cause!!].

 

The grouse of small traders against organized retail, as outlined before, is this: the small traders will be forced to close shop due to low prices and once that happens, the big malls will start fleecing the customers by charging exorbitant sums. That the small traders will feel the heat of competition is a fait accompli; some of them will have to exit, as has been the experience around the world. The question is, is that a reason enough to resist the biggies. Let's look at it this way: the malls are not manned by robots; they too will be creating a lot of jobs for the burgeoning young population of India. And, more importantly, they will be working in a better environment. Why is everyone talking only of job losses and not about job creation?

 

Again, it is not that there is no way out for small traders - they can come together, form a single brand and put up a fight against the biggies [It has been outlined here and, therefore, is not repeated]. There were reports, some months back, about how some kirana-wallahs in Gujarat /Maharashtra were going about doing just the same. [How long will it take for all to realize that trade unions are not for confrontations with the government / people, but to serve each other for mutual benefit keeping in view the larger interests of the society?]

 

A pertinent point raised here relates to the low scope for tax evasion by organized retailers. Everyone knows that not many traders issue invoices and can well imagine the loss  - of both indirect (sales tax)and direct taxes (income tax) - the government incurs due to this. Thus, the government too will be a big beneficiary of organized retail taking root. Also, since almost all big retailers will be - and can be only - corporate entities, there is scope for ensuring compliance with different regulations aimed at preventing defrauding the consumers. The pet peeve of critics - higher prices due to cartelization once the small players exit - can be addressed effectively through mandatory Cost Audit.

 

Forget the low costs to consumers, forget the benefits that will accrue to the agri-sector; one aspect sorely missed by all seems to be this: the unorganized retail sure provides a lot of employment opportunities, but at the end of the day, it is just that - unorganized. Remember, the trade unions cover just about 10 per cent of the total workforce in India. The rest  - mostly in retail sector - are unorganized; not for them, the employee protection / welfare schemes like PF, Bonus, Insurance, etc. Don't we need to offer them these? Do they not deserve to receive such benefits? In a way, by opposing organized retail, the traders' unions and the politicians who support them are preventing the coming together of the unorganized workers (By aligning with the shop owners, isn't the Left betraying its own cause?). With organized retail, better employee treatment will result and this will help in covering an important step towards a social security cover - at least a semblance of the same, the kind which exists in India now - for all.

 

Finally, the kind of opposition seen now in Kerala carries with it a deep sense of deja vu. It was the same leftist politicians who waged a sort of war against computerization in the late 80s and early 90s, resulting in other southern states prosper in IT business; just a few months back, a bullet was seized from the laptop bag of CPI(M) state secretary - my point is not about the bullet, but the 'laptop'! The same vitriolic spirit was in full display when the previous government sought a loan from ADB; soon after coming to power, the present LDF government silently signed the dotted lines the ADB showed them! They opposed the 'Smart City' project when in opposition and a year later signed the agreement with the same people. Who knows, a few years later, we Keralites may even see a mall owned by CPI(M)!!!!

It Happens only in India

I found a few of the recent happenings to be really amusing....In my view, these kind of things can happen only in India......Read on...

 

The Prime Minister Dr Manmohan Singh, in a speech made at a CII function, asked India Inc to have a check on CEO & promoter salaries. He feels that they are paid in excess of what they deserve! He also came down on conspicuous consumption. More importantly, he said that corporates should show moderation in their pursuit of profits. Really interesting and amusing views, coming as they do from the architect of reforms - L, P and G -  which has made India achieve nearly 10 per cent GDP growth [9.4% in 2006-07], far far above the Nehru rate of growth of 3 per cent! The strong growth India is witnessing now was made possible only because of doing away with the licence-permit raj that was in vogue prior to 1990s. As an economist, the PM should well know that salaries in the corporate sector are a function of demand and supply. Money is a good motivator for most people and higher salaries are to be paid if the companies need to retain people. What is wrong with it? Then again, the message about profit maximization is clearly in line with those 1960s' ideology which totally screwed up India's growth and the ill-effects of which continue to haunt us even now.

 

The PM's message may be borne out of the realization that the 'trickle-down' theory is taking time to work in India. But, take a hard look and it will be clear that development has bypassed only those sectors where reforms were not initiated, most notably agriculture, which employs more than 60 per cent of India's workforce. In fact, no reforms have been undertaken where they are needed the most. And, this inability to call the spade a spade comes with a cost - that of losing elections - as people who are yet to get a taste of what reforms entail, will definitely be wary of them. Add to this the continuous barking by the Commies and their allies who believe in the equal distribution of poverty and it's no wonder that the reformer himself has to take a stance like this. In which other country can you see the PM putting forth such views? It is all the more ironic, since (I believe) the PM himself does not hold such a view!! It is also a pointer to the fact that even after three years in office, he has still not been able to assert himself (Just the other day, I saw on TV a clipping of some public function and you can clearly see that the PM sits down only after Sonia Gandhi is seated. Shameful!!). It's indeed sad to see a fine economist being made to dance to the tunes of petty Leftists and miserable scums like Arjun Singh and TN CM MK.

 

The second development is the Gujjar unrest in Rajasthan which held almost all North Indian states to ransom for 7 days. There were violent protests and it left many people dead. The Gujjar community - which is classified as OBC in Gujarat - wants themselves to be reclassified as STs, since they feel that recently-included-in-OBC-list Jats (who have more members than the Gujjars) will take away a good chunk of reservation benefits. But the Meena community - classified as STs - opposes any such move, as they are afraid they will lose out in the race. Even without going into the causes of this agitation or the merits of the arguments of both parties, it can be seen that this unenviable situation amply demonstrates the pernicious nature of reservation as is being implemented in India. As I have outlined before, 'Caste' is being equated with 'Class'. From Gandhiji's non-violence we have reached the other extreme of indulging in violence to prove a point. When one more caste is considered to be eligible for reservation (on the basis of their political power, what else?), those already in the list will face competition; it is perfectly 'logical', given the way reservations operate in India. Why should there be a hue and cry over that? When will people start appreciating the fact that it is in fact 'economic power' that is important these days and therefore, if at all reservations have to be there, it should be based on objective economic criteria? India will probably be the only country where people fight with each other to be called 'backward'!!

 

Then there is the curious case of a person becoming implicated and later being let off when there is a change in the government. The latest such instance is the one in the Taj corridor case. The case was registered on the directions of the Supreme Court which found there was a prima facie case against the accused. Look what has happened now: UP Governor has refused to grant permission to the CBI to prosecute Mayavati, since he believes there is not enough evidence against her! It is clearly a politically-motivated action, and it becomes even more evident when we read it together with Mayavati's statement about presidential elections. Presumably, to get her support in the race to Raisina Hills, the Congress has soft-pedalled her involvement in the case. Unfortunately, the Governor has again proved that he is just a pawn!!

 

All these happen only in one place in the whole world. It's our India, sadly!!!

Classmates Reviewed

'Classmates' was the one of the biggest hits and the most popular of all Malayalam movies released in the year 2006. Even months after its release, the song 'Ente Khalbile...' was still on the lips of all Malayalees. The movie did very good business in all the centres. It was a bit surprising, since it had no superstars in it. The film, directed by Lal Jose, won praise from all quarters for its screenplay, songs, and not least, the performance of all the actors.

 

The film unfolds with the reunion party - after 15 years - of a batch of final year B Sc Chemistry students of a college, presumably in central Travancore. The reunion party has been organized in the memory of one of their classmates who had died tragically in the college. Each of the main characters has a lot of memories of their last year in college and they all are eager to meet their classmates after such a long gap. The story of their last year in college is told in flashback.

 

So, what is special about the movie? Lots of things, one would say. First, as mentioned above, the film has no superstar, which makes a grand opening near impossible. Yes, it would have been foolhardy and utterly unbelievable if Mammootty, Mohanlal, Suresh Gopi, Jayaram or even Dileep was cast as a college-goer. Malayalees are a lot less tolerant than Kannadigas or Tamilians in this regard; there will be heavy criticism even if the movie does well [A 60+ Rajnikanth being cast as a young guy or a 70+ Rajkumar being cast as a college student are all normal in TN and Karnataka and the films are guaranteed hits!!]. The absence of superstars itself is a big strength for this movie. All the actors - Prithviraj, Indrajith, Narain, Jayasoorya, Vijeesh, Kavya, Jagathi, Balachandra Menon and all newcomers including Radhika - have put in a power-packed performance that is convincing. Full marks to the director for the perfect casting. All of the younger actors now have a rightful claim to the baton held presently by the superstars. In fact, one can go on and on about their performances. The meatiest of the roles of course went to Prithviraj and Narain. As the leftist students' union leader Suku, Prithviraj truly lives the role; his mannerisms and dialogues are all typical of a leftist leader in college. The variations in his tones and body language as when he is leading a march and when he confesses his love are amazing. Narain, as Murali, the peacemaker, singer, the secret lover and the tragic hero steals the heart of all. This role has given him a big break in the industry. Though he'd been noted in his roles as the IPS Officer in '4 The People' and as Ijo in 'Achuvinte Amma', the different appearance he came up with, in this movie and the name change - from Sunil to Narain - seems to have worked magic for him. Indrajith as the college Romeo Pious is hilarious and natural. The chemistry in the movie between him and his real-life younger brother Prithviraj is something to be seen to be believed. Jayasoorya and Kavya too excel in their respective roles. It was truly a mind-boggling performance by debutante Radhika.

 

Coming to music, Alex Paul has done a decent job in the movie. The music is not, in my terms, outstanding; but, it blends well with the storyline and the songs have been picturised well too. However, background score is poor. Even when there is high drama on the screen, the BGM fails to make its presence felt, let alone matching the scene.

 

Editing is strictly OK; nothing to write home about. In fact, it could have been much better, to intensify the drama and its impact on the viewer. Similar is the case with cinematography - nothing much to appreciate; it's just good.

 

The real hero of the movie as such is the story and screenplay. That again is by a newcomer, James Albert. He has cleverly weaved in campus life, comedy, romance, action, tragedy and a murder mystery into the story. The liveliness of college life - student activism, campus love, bunking classes, welcoming junior students, etc - is shown without losing its sheen. The unfulfilled, subtle, unknown-to-others love of Murali and Razia is sure to move everyone, even as it is the high profile love of Suku and Tara that everyone will notice first.

 

For one, the movie can be appreciated better only if one is familiar with the background of the movie - the politically charged atmosphere in Kerala's college campuses, more so in the 1990s. The students unions in the state's colleges - especially the arts and science colleges - are dominated by SFI, KSU or ABVP. It's a no-brainer that the unions mentioned in the movie, SFK and DSU, stand for SFI and KSU respectively. If the DSU leader is shown as a manipulator, the SFK guys too score no better - they leave Suku to fend for himself, even as it was his humble background that led to his joining SFK as a natural choice. If you would notice, there is not even a single shot of these student leaders attending classroom lectures, but there are scenes showing them exhorting students to strike; it tells a lot about the nature of student activism in Kerala and about how the student leaders "study".

 

In my view, this movie is a powerful indictment of student politics in Kerala and the violence that is very much a part and parcel of such politics. Politics in college campuses serves the interest of only politicians; they use the students as pawns in their political game of power-grabbing. Colleges, or for that matter, any educational institution, are temples of 'Vidya' and no other activity should be allowed to thrive there. The earlier the students realize this, the better the future will be for them; nobody other than the students stand to lose from campus politics.

Moments when a smile flits across...

A dear friend of mine wants me to come with a list similar to hers. I was initially horrified!!! This was something I never thought of and had never expected her / anyone else to ask me!! She persisted and I have to give in.....good friends have to yield to such pressures....

Yes, there are some things which result in a smile flitting across my face and what follows is a list of that. This is not exhaustive in any way, just a sample...

• Getting up early in the morning and seeing darkness slowly giving way to light
• Praying
• Whenever I understand a new concept, whether or not related to my field of study
• Being alone and sitting with eyes closed......love it if there is the pitter-patter of rain and any soft song of ARR in the background..
• Watching and getting wet in the rain
• Reading good stories / novels / non-fictions
• Writing a good essay, with some effort put in, in collecting the data; the happiness multiplies if I post it on my blog
• Whenever I'm praised for a good work done, by people whom I respect / hold dear to my heart
• Long duration telephone calls / face-to-face real chat with people whom I consider special
• Being near any water body - any pond, backwater, river, sea
  
  
• Long distance traveling
• Traveling along the Alappuzha-Changanassery road in late afternoons without rain
• My M Com, B Com Final Year and 10th classes - even a mere mention of those well-spent years will do
• Seeing a good song while casually surfing TV channels, only to know later that it's by ARR. (This used to happen before I had access to the Net; not any longer, as I get to know of any releases of ARR or any news related to him much before others including mainstream media do, through ARR Fans Group)
• Watching / reading anything related to ARR - interviews, concerts, award functions
• Catching tunes of ARR being used in other TV programmes / films or songs copied / inspired from ARR's
• Flipping through the pages of my previous years' diaries
• Whenever yet another politician is caught red-handed in his / her act
  
  

Guess this is enough!!! Also got to add that included in the above are things which occur far and between...that's gives them a special charm!!!

Reflections on the Rising Rupee

The Indian Rupee (INR) has appreciated vis-a-vis the US Dollar considerably in the recent period. It has gained almost 13 per cent since July-Aug last year. Even as recently as a month ago, it was moving in the range of Rs 44-45 per Dollar; now it is between Rs 40-41. Who all are happy and who all are worried?

 

The government is obviously happy, for two reasons. One, politically speaking, it gets some bragging brownie points. Though Finance Minister P Chidambaram said, "The government has no view on exchange rates", the ruling class can afford to say that the stronger INR is all due to their 'efforts', especially when elections are on in the all-too-crucial UP. May be, just may be, the guilt of mismanaging the economy in the late 80s and early 90s and having had to devalue INR is still there in the minds of Congress people (Oh, yeah?! You sure?!!!) and the gains made by INR may help assuage such feelings! Second, the government has been able to tame inflation at least a bit: WPI based headline inflation has come down to 6.09% from 6.72%, but is still far too above RBI's comfort levels.

 

Besides all these, a Credit Suisse report released recently has said that the rally in INR has made India a Trillion Dollar GDP economy. India's GDP has been put at Rs 41,00,000 Crore, which at Rs 40.72/$ translates to a little over $1 trillion. With this, India becomes the 12th member of the Trillion Dollar Club, the others being the US, Japan, Germany, China, the UK, France, Italy, Spain, Canada, Brazil and Russia. According to the same report, the Indian stock market capitalization too is closing fast on the trillion dollar level. Music to stock brokers' ears!

 

Another set of people who are rejoicing are the importers, in general and oil companies, in particular. Rising Rupee will help improve their margins. It remains to be seen whether they will pass on the benefits to the consumers.

 

In this context, the role of the RBI is surely worthy of a mention. Though our exchange rate mechanism is said to be market-determined, it was an open secret that RBI discreetly controlled it. All along, RBI used to buy up all dollars coming into the economy and this used to get added to our forex reserves, which recently crossed the $2 billion mark; the Rupee that were issued instead were mopped up by what was called 'sterilization' using government bonds under the Market Stabilization Scheme (MSS). However, many questioned this intervention of RBI and the effectiveness of its sterilization operations. The recent bout of high inflation was at least partly due to this, it was alleged. What has happened now? Though the RBI maintains that there has not been any change in its external sector management policy, the RBI has been conspicuous by its absence from the market in recent times. Is it because it has not enough MSS bonds or is there an ace up its sleeve? No one knows. Also, the RBI has concerns about the quality of the money coming into the country. It is now acknowledged that at least part of the dollar inflows is speculative in nature, called by different names like 'carry trade', 'private equity', 'hedge funds', etc. In a recent interview, the RBI Governor Dr YV Reddy hinted at RBI's helplessness in controlling such inflows which arise from policy flaws.

 

Rising Rupee has implications for India's Balance of Trade (BoT) position too. Unlike most other Emerging Market Economies (EMEs), India has a significant deficit in its Current Account. Coupled with a surplus in the Capital Account, a substantial portion of which is a mere mouse click away from flying out, it presents a tricky situation. The need for export competitiveness cannot be overemphasized. Appreciating INR will make it difficult to achieve the export target of $160 billion laid down in the recently released Annual Supplement to Foreign Trade Policy. Naturally, the exporters are a worried lot. If INR gains, it will eat into their wafer-thin margins and many will be forced to down their shutters. Then again, the sunrise IT sector feels threatened as most of their clients are US-based. Bigger firms which have the professional competence and access to hedging tools are better off, but it is the smaller firms that will be hit hard the most. In this context, the RBI's move to allow companies categorized as SMEs to book forward contracts without any past records of forex trade or any underlying exposure, is commendable. The RBI has also taken measures to ease Rupee outflows. All these have to be supplemented with activities to educate the small and medium exporting units on using hedging tools effectively.

 

Finally, amidst all this is a report (by JP Morgan? I'm not sure) that the INR is overvalued by about 11 per cent at current levels. This complicates the situation. Is the appreciation temporary? Will the Rupee plunge below the 50/$ mark? Only time will tell. Another aspect that calls for immediate attention is the need for cost reduction in all sectors of the economy. Though cost control and cost reduction are essential ingredients for the success of any organization, its significance becomes manifold for export-oriented enterprises, especially in the context of a rising Rupee. It is both an opportunity and a challenge for Cost and Management Accounting professionals. There is this dire need to instill cost consciousness in our economy and the rising rupee is the perfect excuse to initiate a cost reduction drive in all industries and sectors. Cost reductions and innovations are necessary to stave off the challenge posed by other low cost destinations like Philippines.

Misinterpreting Indian Constitution

'Yours truly' is not an expert in the complexities of Indian Constitution. However, that should not prevent him or anyone for that matter from airing one's views on the same. On the basis of this belief, the following is a take on the tendency on the part of some of the stakeholders of Indian polity to interpret the constitution to suit their vested interests.

 

First is about the controversial topic of reservation. The Constitution, of course, provides for reservations for the disadvantaged and backward sections. Take a closer look: does the word 'caste' appear anywhere in the Constitution? No! It speaks of only 'class'. Then who is the 'erudite a*****e' who decided that reservations should be based on caste? Some people say that 'Class = Caste' if caste excludes the well-off within. However, that is a mistaken notion. If the objective is to keep out the well-off, then why is not reservation given on the basis of economic status alone? Even after some 57 years of independence, the quota system appears nowhere close to being phased out. It is to be remembered that even the SC/ST reservations were supposed to last for just 10 years. It was intended that this practice will be reviewed and measures taken to set it in tune with the changing times. Every ten years, the Parliament decides that SC/ST reservations be continued for another decade. When will this stop? True, caste-based atrocities are reported even today from different parts of the country. But that signals the existence of a malaise entrenched far deeper in the psyche of some people. Does reservation remove it? Again, no.

 

It is time we scrapped caste-based reservations and came out with an objective mechanism that takes cognizance of one's social, economic and physical weaknesses to help them realize their true potential. A targeted 'Help & Nurture System' for such people should be put in place. To make use of an analogy, in a 100 m race, the weak people need not be given the option to run just 70 m; they have to be given extra training to run the full distance. More than anything else, it will do wonders to their own sense of self-respect.

 

Second issue is another hot potato, 'minority rights'. The term 'minority right' itself is wrong; it is 'minority protection'. The controversy over this issue has two aspects. First is the lack of a precise definition of the term 'minority'. It is generally agreed that minority-ism is of two types: linguistic and religious. However, the problem is with the level at which we are to assess it - at the state level or at the national level? A minority in a state may be a majority in another. Therefore, logic states that minority status should be assessed at the state level. Another aspect of the controversy stems from Article 30 of our Constitution which provides that minorities will be free to run and promote their own educational institutions, etc. This provision is made to ensure that minorities do not suffer any discrimination in running such institutions and are thus able to protect and promote their unique culture, practices and customs. It is to be remembered that this provision does not give them any special privilege which is not available to others, the majority; in other words, the intention behind the provision is to have the minorities treated at par - not above or below others. However, this Article has now been sought to be interpreted as giving some special rights to the minorities, as if they are free from all rules and regulations. This hots up as a big issue especially when the minorities are perceived to be economically and politically strong, as is happening in Kerala.

 

The bottom-line is that all special provisions made in the Constitution to benefit any group of individuals are ultimately aimed at their economic and social upliftment and preventing / ending discriminations against them. Once this objective is achieved, these are to be scrapped. Again, if the mechanisms to ensure this have not produced the desired results or are proving to be the divisive forces in the country, it is time we revisited them and made them work the way they are expected to. Unfortunately the courage / willingness to do so is terribly lacking in India's political class.

The Supreme Court strikes again

The Supreme Court of India, in its interim order, has stayed the implementation of the reservation of 27% of seats in central government-run educational institutions including the IITs and IIMs. Basically, the SC has agreed to two of the points raised by the petitioners: One, how was the figure of 27% arrived at? In other words, what scientifically-gathered data is there which puts the figure of OBCs at 27% of India's population? Definitely not a 1930 census! Second, why should the 'creamy layer' be given the benefit of reservation? It has also made the caustic observation that the Central Government should not use votebank politics to divide the country. The Government has been given time to come up with supportive documents by August.

 

This interim order is sure to hog the headlines in the coming days. The HRD minister Arjun Singh, who was the man behind this Act, has expressed 'hope' that the final order will be in government's favour. The 'Mandal' man VP Singh has called for a referendum on reservations.

 

Now, a lot of questions remain unanswered. As the Left says, how can the SC which upheld reservation of 27% to government jobs now trounce this? Then again, as one student representative said on one of the TV channels, caste in isolation is not a criterion for determining backwardness. There are other barriers also, like the gender divide, the rural-urban gap, the inter- and intra-regional imbalances which all cumulatively determine backwardness. Just the reason that someone is born into a particular caste does not automatically entitle him to work less than others!

 

A crucial question that everyone conveniently skirts around is this: How effective is reservation / quotas as a tool for the amelioration of the sufferings of millions? Agreed, we need to have an inclusive growth. But, is reservation the only mechanism? No!! Reservation can at best be cosmetic. It does not treat the underlying disease. An analogy comes up in my mind. If two athletes are competing and if one belongs to a backward caste, do we say that he needs to run less distance? No, but we need to give the right kind of nurture and equip him to put up a better performance. One hopes that the SC will give due consideration to all these in its final verdict.

 

The world around us is marching ahead. Also, there are growing inter-linkages between the global affairs and what happens in India. We're no longer an island that we once were under the likes of Nehru and Indira Gandhi. The world does not tolerate mediocrity. It needs fighters. Need proof? Look at India's ignominious exit from the World Cup Cricket. We should not be resting on past laurels, but we need to keep achieving more, small or big.

 

Finally, why did I say that the 'SC has struck again'? Yes, the first time was when it ruled that all laws put under the 9th schedule of the constitution after the verdict in the Kesavananda Bharathi case (1973) are open to judicial review. The said schedule was being used as a mechanism to dodge uncomfortable questions in the form of judicial review. By asserting that all laws are open to question in the court, the SC only reiterated the 'basic structure doctrine'.