State of Indian Economy

Economic slowdown is often cyclic and a fact of life. The economic woes are all pervasive and the root causes commonly fall within select patterns. Individual countries have different problems. However, there is common a shared thread and a select set of individual factors. Identifying the patterns for a specific country will help in putting up a strategy for revival. I have focused on articulating the need for a solution within broader problem space for India, which has fluctuated economically from at risk (2013), expansion (2016) and now again at risk (2019). This blog is not exhaustive and does not go into a detailed root cause analysis or detailed solution building exercise.

In this article, I have identified select solutions that would cater to the existing problems, help boost the economy and address the social issues.

Economic slow down is often cyclic and a fact of life. Slowing down or crash landing of Indian Economy is an increasing chatter on the internet. However, a closer look will reveal that the recessionary phenomenon encompasses most major economies including US, China, Japan, Germany, UK, France, Russia, South East Asia (the so called ‘Tiger Economies’ of 2000’s), Brazil, Turkey and oil rich Gulf Nations. Latin American countries such as Venezuela, Brazil and Argentina are acutely going through this recessionary distress with revolts and change of ruling Governments. Venezuela is undergoing severe inflation called stagflation that is spreading the contagion across the borders. Poland and Canada are amongst the only few countries that are showing flying colors despite the adverse global economic head wind.

Nations such as Pakistan, Sri Lanka and many African countries, especially those who have subscribed to the String of Pearls (SOP), Belt and Road Initiatives (BRI), Regional Comprehensive Economic Partner (RCEP) and the 54 nations of the Africa Continent Free Trade Agreement (AfCFTA) will face a massive financial challenge while servicing the burgeoning Chinese loans. Countries such as Pakistan, are on the precipice of falling into bankruptcy. 

The economic woes are all pervasive and the root cause commonly fall within select patterns. Individual countries have different problems. However, there is common a shared thread and select individual factors. Identifying the patterns for a specific country will help in putting up a strategy for revival. I have focused on articulating the need for a solution within broad problem areas. This blog is not exhaustive and does not go into a detailed root cause analysis or detailed solution building exercise.

Ignored Global Comparison:

In India, private debt in 2017 was 54.5 per cent of the GDP and the general government debt was 70.4 per cent of the GDP, a total debt of about 125 of the GDP, according to the latest IMF figures. In comparison, debt of China was 247 per cent of the GDP. As of October 2018, it stands at approximately CN¥ 36 trillion (US$ 5.2 trillion), equivalent to about 47.6% of GDP. A key gauge of China’s debt has topped 300% of gross domestic product, according to the Institute of International Finance (IIF), as Beijing steps up support for the cooling economy while trying to contain financial risks. China’s total corporate, household and government debt rose to 303% of GDP in the first quarter of 2019, from 297% in the same period a year earlier, the IIF said in a report this week which highlighted rising debt levels worldwide.

In the United States, total non-financial private debt is $27 trillion and public debt is $19 trillion. More telling, since 1950, U.S. private debt has almost tripled from 55 percent of GDP to 150 percent of GDP, and most other major economies have shown a similar trend. Cumulative debt stands at 40 trillion dollars. Comparative figures from US reveal that India is not badly hit, considering the numbers released by the Indian Government are trust worthy and credible.

Let us review select Key Performance Indices (KPI’s) of India’s financial health. Here are few interesting figures from the State Of Indian Economy –

  • GDP growth is at a 15-year low
  • Unemployment is at a 45-year high
  • Household consumption is at a four-decade low
  • Bad loans in banks are at an all-time high
  • Growth in electricity generation is at a 15-year low

The list of highs and lows is long and distressing. But the state of the economy is worrying not because of these disturbing statistics. These are mere manifestations of a deeper underlying malaise that plagues the nation’s economy today. These figures were  published in the Hindu, a very reputed and respected daily. When I share independent data from foreign outlet, those are immediately ridiculed as being ‘biased to damage the growing stature of India’.

I was talking with a building contractor friend of mine who has a meaningful business.  When prodded on his state of business, he said, everything is so dry and no new constructions are taking place. This is not my isolated discussion. Every now and then, I do probe these questions to people across the globe and India happens to be on the top. Below is a list of industry verticals that are not just sluggish but in recession (more than 2 quarters of slow down beyond certain percent points).

 

India Economic Slow Down

Industries Impacted: 

  • Manufacturing
  • Farming
  • Auto
  • Construction
  • Airlines
  • Service industry

Impact Equivalence: 

If you factor in the total percent affected, you will notice a major chunk of population that forms the base of the pyramid, is affected because of the slowdown.

What happens now?

Well, families and business entities are at least losing 34-57% of their revenue. That’s a significant number. Spending goes down and tax collection goes down, tax at the POS (point of sales), tax from earning and tax from business.

  1. Quantitative Easing
  2. Bad Loans or Risk prone leveraged industry
  3. Global slowdown
  4. China – A special mention
  • Quantitative Easing:

Well, let us borrow now at cheaper rate from the Govt, or blow up what is saved in RBI (exit RBI Governors), loan or from outside or print currency.

  • Bad Loans or Risk prone leveraged industry:

We can’t let this to catapult to a state of anarchy. We have to loan where the potential for defaults are high. Banking, Airlines, Telecom ate common examples. These were bankrupt overnight? The most common folks (shareholders) lost the most. Millions of crores of national treasure disappeared in just a fraction of time.

I disagree with “the Hindu” here. Let us understand, corruption was not just prevalent but endemic and all pervasive. Nothing wrong, if Modi tightened the levers. At least he had guts to do that. No one including the system had shown responsible behavior and if Modi has tightened the noose, nothing wrong about it.

I will elaborate the reasons where we are going wrong, needless and pointless to blame Modi for all the ills. Devaluation and GST came at a wrong time that confluencing along a Global slowdown, on which Modi had little control.

  • Global slowdown:

India is not alone. China, UK, Germany, Japan, US, France, Gulf, Russia, Brazil and many Tiger economies (remember the term for ASEAN economies used in 2000) are significantly slowed down.

  • China deserves a special mention:

China is the worst affected with 100s of ‘Ghost Cities’, flailing international trade pacts (CPEC, Asean and The revival of the Silk road) and the flight of money compounded by increasing cost of labor. It is gaining a notorious reputation of creating and exploiting poor nation’s solvency, squashing neighbors and selling obsolescence across the globe (recollect how your electrical and other goods specifically made is China have become durable and short lasting).

What should be done?

First and foremost, Modi has to move beyond strongman to strategist. A nation survives on vision and not just statesmanship. I have identified few areas that will help boost the productivity at the individual level, jump start the GDP and improve the health of the economy.

  1. Foundational Infrastructure
  2. Roads and Railways
  3. Satellite Cities and Telecom
  4. Innovation in Farming
  5. Revamp Agricultural Supply Chain
  6. Environment and Pollution
  7. Sewage and Containment
  8. Social Re-Engineering

India Vision and Strategy

Foundational Infrastructure:

The endemic water deficiency mandates saving water, reviving rivers and building colossal connected canals for transporting water are a crucial and critical need of the growing population. It goes beyond saying that water is required for Agriculture, Industry and daily use. Lack of water will result in immediate and nationwide chaos.

Roads and Railways:

Not Airways or Bullet Trains. Though the road network is improved significantly in the last decade, it is still only sufficient for the next 5-7 years. Cities are still clogged and they will get further cluttered. Roads and rail are required first, that’s how most population and goods move across the nation. Only few travel by Air or Bullet Trains. Remember, those costly built rail networks in Africa that cost their nation a hefty and heavy loan serving overwhelming burden. India should not repeat that.

Satellite Cities with Telecom/Internet:

Creation of satellite cities is a key to decongest and reducing the risk. We live in a connected world and to be on the forefront, Internet and fibreoptic becomes a foundational utility.

Innovation in Farming:

The last time a major innovation was done under Green Revolution by Lal Bahadur Shastri. Thereafter no radical change has been effected in agriculture. Other than small incremental changes to innovation in productivity, least has been done to the farming supply chain. Current risk management is based on disbursing cash to those drought affected (after an increase in suicide rates) or those with inadequate production.

Revamp Agricultural Supply Chain:

Perishable crops are still creating significant damage. Over production is still a rampant issue. Mid and Long term Storage of crop is limited to grains, very few and insufficient facilities exists for increasing the shelf life of vegetables. India has enough space to store Grains though. Value added product infrastructure is significantly missing.

Environment and Pollution:

Everyone has a recollection of the ‘Delhi as a Gas Chamber’ Situation like Delhi are a commonplace across North India. Though a significant stride has been made towards harnessing solar power and unleashing energy from nuclear (rather than coal), India’s dependence on fossil fuel is significant. To move a huge behemoth and diverse country to alternate source of energy, India needs to invest significantly in innovations across multiple sectors.

Sewerage and containment:

This is still a massive problem. Open defecation are a vestige of a long drawn culture. Unfortunately, no institutional efforts have been made to harness gas and manure from human bioexcrements. Name sake potty’s have been built to take time leverage. Both electricity and gas for industrial use can be harnessed from “Gobar Gas” plants. As a child, I still remember we had one GG Plant and it was my duty to buy cow dung on my way back from morning tuition. I would make the slurry and pour in the tank and go to school. That was 1979-80. I promise, GGP will never fall in disrepute.

Social Re-engineering:

It is utmost important for a nation to find and or reinvent its own identity. India is going through those pangs right now. It is at a confluence of several mingling streams. India cannot take recluse to older achievements. If it had the potential in the past for defining humanity, does not guarantee that it will have the same potential to influence the future of humanity or even define the potential of its nationhood. None of these factors discussed above will bring that constant trajectory of intellectual and spiritual achievement. That will only be guided by Social Re-engineering. Currently, society is defined by Facebook and Whats Up University, which in themselves are manipulated to sub serve our inner mortal and material trappings.

Social engineering around several issues is a need of the time. Issues such as existing in a plural world in harmony, acceptance of differing views and debate in moderation, women’s emancipation, abandoning the vestiges of ‘Chatur Varna’, adoption of a true pursuit of logical and scientific belief, bringing the inner layers into the evolving cycles of current times, creating didactic pathways that would support the emerging needs of occupations at an optimal pace  are the need of the time. The list runs long however, not having a vision and a strategy is an absolutely unpardonable excuse for those in ruling the nation.

I am less worried about the current slowdown. Those are cyclic. They will occur as the tides of time will ebb and rise. However, not making concerted attempts in shaping nation building is definitely wrong if not criminal. Accepted that the Economic currents are adverse, however, people demand creative, strategic and effective leadership to avoid stagnation, slowing down increasing headwind resulting in a healthy slow landing of the economy rather than a disastrous landing. Leaders of all hues and color have to collectively dedicate themselves towards these vision, irrespective of their commitment to ideologies, being in the seat of power or having the ability to influence.

A Gentle Request:

If the above makes sense to you, may I request you to spread the awareness. Finally, it is the masses that define the polity and politicians do what is the sentiment. Let us all create that positive and productive virtuous cycle of sentiments.

 

Shashank Heda,

Dallas, Texas

More to write later…

Also Visit – US and the World Economy here https://wp.me/p7XEWW-1A

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I disagree with below Excerpts from The Hindu below –

The root cause of this rupturing of our social fabric is the Modi government’s ‘mala fide unless proven otherwise’ doctrine of governance. The premise of the government’s policy framework seems to be that economic participants have mala-fide intent unless they can prove otherwise. This suspicion that every industrialist, banker, policymaker, regulator, entrepreneur and citizen is out to defraud the government has led to a complete breakdown of trust in our society. This has halted economic development, with bankers unable to lend, industrialists unable to invest and policymakers unable to act.

https://www.thehindu.com/opinion/lead/the-fountainhead-of-indias-economic-malaise/article30000546.ece

 

Are Centrist Mutating?

Recent upsurge in right wing dominated nationalistic sentiments disrupted existing models in several countries. However, an experiment was played in Maharashtra, India that would possibly be a harbinger to an emerging model wherein the marginalized centrist forces may possibly adopt this model and make a comeback.

Reemerging Centrists.PNG

In the state of Maharashtra, all right wing parties (BJP and Shiv Sena) made prepoll alliances; similarly the centrist parties (Congress and NCP) went into a similar alliance formation with agreed common program. However, immediately after the elections, the rightwing alliance broke down and one of the right wing ultra-nationalistic party forged an alliance with the centrist parties to form Government.

To many, this was strange and to the BJP, it was shocking. Political pundits thought it to be opportunistic; however, I differ with the Political Pundits and find it as an emerging pattern. I made attempts at deciphering the dynamics driving the formation of new alliances. Identifying newer patterns in alliance formation does not mean I subscribe to this newer model. Identifying models only help us understand and mature our perspective. It is upon individuals to make conscious choices and influence their polity. The events in Maharashtra may be considered as a prelude to one of these patterns that is likely to influence the formation of future alliances, not alone in India but across the globe.

Saffronization of the polity:

There is a prominent Hindus wave in India. Most so called centrist parties never realized this emerging phenomenon. Here before, safeguarding or protecting the cause of Hindu believers was politically incorrect. However, the majority Hindu population felt that they were neglected. That frustrations. was tapped by the BJP. The centrist parties knew this pent up frustration, despite they kept away from addressing this growing frustration.

Electoral impact:

The electoral results gave BJP a resounding victory. Realizing this, most leaders from centrist parties realized it is time to disrobe their white outfit (a congress era vestige) and wear saffron color outfit.

To Survive, ‘Change is a Must‘:

Simile apart, most centrist parties are now, not averse in taking up the ‘Hindu cause’ for their survival. It will not be surprise to see this becoming a nationwide phenomenon. For the Sena, to avoid being squashed under the umbrella of a nationwide Hindutva outfit was a sure death. To survive, it had to be stronger than the big guy, BJP.

The Vantage Point:

Sena’s survivial sentiment were very well tapped by NCP supremo, and he supported their demand for Chief Ministership and thus widened the rift between the political bedfellows of over 25 years.

For the BJP, a time had to come for separation from Sena and show their might and dominance in Maharashtra. BJP would have diluted Sena inevitably. However, NCP infused and enthused Sena for CM’s position. This hastened the emergence of the two parties diversing and arriving at this crossroads. After establishing themselves nationwide, BJP don’t need Sena to hang on in Maharashtra. Thus not succumbing to Sena’s demands was strategically natural, not a principled stand, neither was it a matter of Amit Shah’s temper.

Congress had learnt it hard-way the saffronization is marginalizing them. It had to change the color of its outfit and an alliance is a step towards that change to win the Hindu heart.

Power Provides Petrol:

NCP stalwart spotted the right time to flex his shrewd muscles. Recent exposure of Praful Patel was a harbinger of the attacks to come. Flexing power and keeping enemies at bay was the crucial need.

For NCP and Congress, staying out of power for a long time meant erosion of their coffers. Ruling a rich state helps to refill those coffers. Strange ways of politics but a political party cannot survive without ruling (and corruption) for long. Both Congress and NCP had to snatch this opportunity.

Thus Saffronization, Electoral Impact, Political Survival, Individual and Coalition Dynamics and the need to recharge coffers dominated the formation of this new found alliance. To me, these are not opportunistic bedfellows. These are emerging patterns of alliances in post right wing dominated world.

(Shashank Heda, Dallas, TX).

Maharashtra: The unravelling of India’s BJP and Shiv Sena alliance

https://www.bbc.co.uk/news/world-asia-india-50402748

Holocaust of Hindustan

We never realized that those residing beyond Hindukush, broadly called as Hindustan is a regional identity of the people comprising a diverse composition of ideologies, culture, rituals, practices in a milieu that accepted the diversity and heterogeneity. Hindustan had gone through 1000 years of atrocities, plunder, and inhumane treatment at the hands of the Arabs, Turks, Monghol and the Persians.

Hindustan tolerated this onslaught and even assimilated remaining residual rulers and their henchmen as part of their character. Gradually, deviations of the new culture had an impacts on the native Hindustani culture and an idea of sovereignty evolved to embrace these new rulers as part of our culture, as part of our nature and as part of our sovereign character.

You all may ask, after all we were a warring faction of several kingdoms, so what is wrong with Turks, Mongol, Mughal or Arabs invading India? Weren’t the Cholas fighting with Cheras and weren’t the Pandians conquering the Cheras? Weren’t the Guptas, the Rajputs and other clans fighting for dynastic control? While I was talking with a small group, in Dallas a few days back, I stated that we were a warring faction of kingdoms but we followed dharma of war, these invaders never followed that dharma of war.

What’s the ‘Dharma of War’?

There are countless examples of princely kingdoms capturing each others and expanding or shrinking as the story (history) of the land unfurled. However, one thing was constant, they followed the rules of war. No fights happened after dusk time, wounded were nurtured and cared irrespective of enemy lines, the losers were no decimated, the women were not robed/raped or even insulted, vulnerable like kids and elders were not touched, property was not destroyed, temples, scriptures and cultures were treated with dignity. There was no forcible conversion, no eviction, no jazia for losers etc. ideologies were untouched. That is the dharma of war (Shashank Heda).

Even in war, they followed humanity. That humanity was a key driving principle. That was a sign of evolution of culture. It was followed almost universally irrespective of region, religion ( Sanatan dharma or Buddhism), time or reason for war.

When these invaders invaded, they were barbaric and rudimentary in the culture and evolution. For those who question the parity of the invaders state versus Hindustan, let me step back and say, thieves plunder the rich, not the nomadic and the poor. That wealth, an an outcome of civilization and culture, formed the reason to attack and plunder.

Let me step back again and add what rudimentary means. Say you have just arrived from a traditional land with rudimentary culture, where women are covered from head to toe and you reach Western Europe or North America, and you see a skimpily clad girl, naturally it is sore and alluring to your eyes. However, those residing here in US, give a damn or turns around and see that skimpily clad girl. her but if that same behavior were to happen in a native land, possibly she will be subjugated to a plethora of maladies depending upon where it had to happen. That’s rudimentary and unevolved culture.

These barbaric Arabs, Turks, Babars and Monghol were barbaric and unevolved people who attacked a civilized evolved land, where the ‘dharma of war’ was laid down as principles. The believed in jungle raj that never knew the principles of war, I call those ‘dharma of war’, the so called tenets that were tacit and spoken understanding before going to war.

We all know that Genghis Khan’s Y Chromosome (and lineage) forms 6% of all Chinese population where his brutal rein rode through. How did that happen? When this trailblazer Mongol started his expedition and captured China, of course he disseminated his DNA all along. Can you imagine the atrocities committed by him? He is the one who converted to Islam after conquering Istanbul (called Byzantinopole or Constantinopole).

Similar brutalities are evident from Latin America, where the Europeans plundered, looted and destroyed the civilization. Europe was then a filthy continent with different diseases like Plague, Cholera, Syphilis and Gonorrhoea.

Most readers are aware of the advanced civilization of the Mayans, Incas and others. This land was invaded by Europeans, who not alone spread the bugs but also killed most men and made a horde of ladies as their harem or concubines. Today, as Latin America stands, very few original ethnicity still remains, most are a hybrid of Spaniards and Mayan/Inca Ethnic stock. They have lost their culture and their religion. Only recently, have they started bringing back their original rituals and ideologies.

When barbaric and immature cultures invade, they pretty much plunder and decimate the niceties of evolution and that’s the story of India. There is one subtle difference between Hindustan and Latin America though, the Hindu story is not as bad as Latin America but India has to stand for its own lost identity and if I reflect correctly, that’s the potent and strong sentiment that is all pervasive. That is the second awakening, the first being the struggle for Independence. The current political dispensation sensed this sentiment and is riding high upon that sentiment.

Glory cannot be just found in history, India will have to toil today to eschew and regain those heights of civilization, sentiment is not enough. Momentum is built with every transaction and every facet is important. That energy is pulsating and palpable amongst the Gen X/Y, everywhere but it needs to be channelized and a milieu created for realization (Shashank Heda, Dallas, TX). That vision to draw a strategic roadmap is being cobbled as yet but India awaits that articulation and the world awaits to embrace the emerging India and comprehend its strength.

The Ailment – 3

This is the prospective Presidential hopeful admitting the ownership of slaves on behalf of his great great great grandfather. This is worth a rad for those liberals who believe in equal rights for all humans and who understand the torment and pain endured by those who went through this ordeal for generations. I sincerely salute such leaders since these are the ones who create the destiny of the country, not the narrow minded partisan polity. We curse US for its progress. US was born from leaders like Beto.

India does have equal opportunities. However, centuries old Varna System has established the practice deep into our genome. We can survive without realizing the oppression of a class. Enshrining the constitutional reforms with protection of this lower class was first corrective step. However, decades of playing politically correct has deprived the true meaning of the benefits of reservation and we have created another creamy layer within those enjoying reservations and ignored a broad swath of society that still is deprived of those advantages for centuries and generations. The malice does not end there, we have simultaneously created a new class of economically disadvantaged folks who were deprived on normal opportunities in the absence of reservations.

Does that mean, we should continue what with the reservations as is or does it mean reservations policies should be modified to 1) bring wider spectrum of people under the umbrage of reservations 2) avoid creating another legacy of disadvantaged class of society deprived of advantages despite merit? Visit my blog on https://wp.me/p7XEWW-16j

Beto, a US presidential hopeful, wrote a piece admitting his parental legacy being benefitted from slavery. Ownership of other human beings conferred advantages not just to Andrew Jasper and Frederick Williams, but to Jasper’s and Williams’ descendants as well. They were able to build wealth on the backs and off the sweat of others, wealth that they would then be able to pass down to their children and their children’s children. In some way, and in some form, that advantage would pass through to me and my children.

That those enslaved Americans owned by my ancestors were denied their freedom, denied the ability to amass wealth, denied full civil rights in America after slavery also had long term repercussions for them and their descendants. The way that fortune was passed through the generations from Andrew to me, misfortune was passed through the generations from Rose and Eliza to their descendants who are alive today. Rose and Eliza were denied their freedom and the benefits that their labor produced; they and their children were then denied their civil rights after the end of Reconstruction; and their descendants endured open terrorism, economic exclusion and racism in the form of Jim Crow, lynchings, convict leasing, voter suppression, red lining, predatory lending, and mass incarceration. Everything their descendants have accomplished in their lives is despite having all of these odds stacked against them.

In the aggregate, slavery, its legacy and the ensuing forms of institutionalized racism have produced an America with stark differences in opportunities and outcomes, depending on race.

View at Medium.com

The Ailment – Part 1

Intelligence (and great analysis) is not leadership, that’s what we have in many leaders currently. We have intelligent self-serving folks, focused on themselves with no ability to risk their own popularity with outcome from a tough strategic decision. These folks are less connected with the root cause rather than the rhetoric and who think the rules don’t apply to them. They maintain and operate through a coterie and bunch of sycophants. Why should a coterie or follower, follow them if these leaders can’t provide them any benefit? That last word, ‘Benefit’ is important. Corrupt leaders know that they need to benefit their coterie, that’s why they encourage corrupt folks under them. It thus forms an ecosystem of corrupt, a self-serving politico-corrupt ecosystem. Thus a contagious bad apple effect percolates within the ecosystem they create.

This four point proposal was after a long reflection of the underlying dynamics of frustrations, prevalent at that time. It was a synthesis after a long deliberation and evaluation of several socially disadvantaged people not getting the benefits. Now, after 34-35 years, we see that ‘Akrosh’, that ‘Udrek’ that resentment so intense. May be something should have been done long back, on lines similar to what I proposed in 1985-86.

Not too long back, during independence struggle, the leaders had the stature and commanded respect from their populace. Their character traits encompassed selfless, dedication and benevolent act overarching all humanitarian pursuits, not withstanding their religious, ethnic or regional affiliations. They had a collective vision and a dedication to drive towards that common shared common destiny. Masses respected, supported and followed these leaders. Remember, revolutions are borne out of hungry stomach or incessant injustice. That hunger and or injustice was pervasive. Masses were looking for someone with those aforementioned qualities. These were not born, not charismatic, but they earned that respect through these traits.

Equality Versus Equity

Tienanmen was quashed because economy and opportunities were booming. People have a certain level of tolerance (also called as resilience), to such inadequacies if they are busy with their lives. Over a period of time, social values degraded and that zest to lead fell to decadence. An element of that vacuum of dedicated leaders was filled in by leaders needing sycophants, because they were intrinsically weak, lacked that innate leadership quality and that organic connect with the masses. These leaders were intelligent though, and let me say, intelligence is not higher education. I have seen visionary leaders and able administrators who had a grasp of the state and benefited the masses.

Unfortunately, Rotten Apples are intelligent

Again, intelligence (and great analysis) is not leadership, that’s what we have in many leaders currently. We have intelligent and selfish folks who are self-serving, focused on themselves (with no ability to risk their popularity and voter outcome), less connected with the root cause rather than the rhetoric and who think the rules don’t apply to them. Why should a coterie or follower, follow them if it does not benefit? That last word is important, ‘Benefit’. Corrupt leaders know that, that’s why they ignore corrupt folks under them. It thus forms an ecosystem where there is a hierarchy of corrupt, within a self-serving ecosystem. Thus a contagious bad apple effect percolates within the ecosystem they create.

This nurtures a system that becomes hollow and eroded inside. Gradually, it becomes a norm, a culture and way of life. We never realize how we landed in this state of despair. I am not very hopeful that any change of political party, banner or face will change anything. It is a system problem and they have to get aligned or be ejected, like an allergen or a thorn, out of body. In a doctors parlance, incompatible organs get rejected. That’s what will happen if a different hue (party, banner or face) will try to do.

An often asked question – can intelligence or education make a difference? The answer is obvious.  I definitely rue the state of Indian affairs. It’s Matrubhumi, a place for identity and despite, a place we unfortunately left behind, but our heart aches and it swells with pride when a rocket is launched or an extraordinary achievement is done.

I can write about the recent demonstrations against reservation (affirmative action), against aggravated nationalism, about religious intolerance, about the current generation as a legacy of our evolved culture. I find current state in ruins but should we be hopeless? Definitely not and if you ask me, why? I don’t have a reason to justify (given the state of affairs) but i have deep trust that India will rise. Time alone is an answer and that we are seeing events in time snapshot, as a frozen frame (in time).  That trust within us and that faith in those founding principles laid by the moldings from Sanatan dharma, will see it rising like a sphinx. Time alone is an answer, probably you and I won’t survive to see that, but that will happen, not with dreamy eyes but a reality and of course, I am not making a prophecy so that also means we have to make concerted efforts in that direction.

That ‘WE’ of Nationhood

That WE is important (that I is very is very dilapidated in front of that WE). That WE include this huge diversity – or regions, religions, ideologies, aspirations, ethnicities etc.). Exclusion is formidable and incompatible to us as a nation. Inclusion is our ethos and when we walk together, we make that WE and a great nation. The path is long but achievable and we are making those strides.

Change is imminent and change is required. We have to dismantle old models, reinvent ourselves and make a gargantuan huge machinery that works in unison, completely in sync. Change to ‘reservation (affirmative actions)’, ‘radical ‘religious right wing’ movement, innovation in farming, creating locally dispersed opportunities (and consequently, labor) are few things that need prioritization.

We are simultaneously beset with several cultural blocks. We lack a concerted national vision, and unfortunately, we don’t realize that our very existence is under that nation. Religion, ethnic, family, regional and language ties come later, after that national vision. Right now, it is reverse, we care for our compatriot even if she/he is corrupt or inapt, we care for our ethnic or religious group  despite knowing those are on flawed grounds, so also, we struggle to oppose kinship. However, we hate a specific ethnic group. We have biases and prejudices and prototypes, and we call them Marwadis or Gujjus etc. That rhetoric has continued to build over the last 70 years. We have to end this schism. That’s just one prejudice.

Affirmative Action – a palpable ailment

We also have to remember, collectively as a society, we have exploited a class or strata and it is our collective responsibility to undo that injustice. If affirmative action was inscribed in the constitution, it was envisioned to bring this huge swath of populace into the emerging sense of nationality. Those who haven’t been the beneficiaries of this action, often insists that affirmative action was planned for only a decade. I often rue, is a decade enough to roll back the changes that have been inflicted for centuries now? I strongly feel, though the vision was carved into the constitution, it was only more a vision and those visionaries lacked creativity in rolling out a plan to understand the dynamics of how it would unfurl over decades amongst the diverse growing masses.

In 1985-86, during college elections, I saw casteism for the first time. Medical College Student elections were contested on caste affiliations, they would call it packing. Like packs of caste based groups aligned to vote as en lot. We were the first batch to start Non-Casteist Panel (NCP before Sharadrao coined that term 🤓). However, I was fortunate to be closer to one of the son’s of a prominent leader from socially disadvantaged class. He and I had open discussions on caste based reservations. I proposed, that’s 1985-86, I proposed below items for changing reservation. I cited his own example.

The Four Point Proposal –

  1. One reservation for graduation, one for job.
  2. If you get the job/education without reservation, that credit can be saved for that individual, which he can enjoy anytime.
  3. Once a family is elevated with reservation benefits, they exhaust the benefits for the next generation.
  4. The reservation percent would stay same, not decrease so that other layers within their society get the benefit.

These four point proposal was a long reflection of the underlying dynamics and frustrations, prevalent at that time. These came as a synthesis after a long deliberation and evaluation of several backward communities not being benefited despite a robust reservation program. Now, after 34-35 years, we see that ‘akrosh’, that ‘udrek’ that resent growing intense. May be something should have been done long back, on lines similar to what I proposed in 1985-86.

Today, we see an all pervasive, festering frustration. Millennia of new generations are born from whom opportunities are not alone deprived but we are creating an schism and a divide with our rigid reservation system Where is this heeding?

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The answers are unlikely to be simple, so also they are unlikely to be acceptable to all. That does not mean we leave those alone, untouched because reworking would land us in controversy. Irrespective of the current ruling regime – Congress, BJP, or any combination thereof, all have decided not to open this Pandora box. They are afraid, the bees would bite most to those who are closer to the reworking the problem. However, as time stands today – no political entity or character has the creativity, ability, capacity or vision to solve this festering problem.

Two mute points of learning from this national affirmative action program –

  1. Good intention are not enough, a leader need to be a visionary to unravel such a deeply impactful program will unfurl over a period of time. Articulate and dynamic leaders are required to unleash and embed a program of such national importance.
  2. Such initiatives should be time bound and change to understand, include and assimilate the diverse needs of times.

Except good intent, both these characters were lacking when these reservations were made. Time and events can’t be undone, however, it is still time to make decisive actions and roll out changes that are commensurate with the needs of current time.

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Updated on May 22, 2019

We are so incorrigible to the core that we hardly want to see a perspective beyond ours if in the process; we have to give away our benefits for the wider good. Such issues are not uncommon in advanced economies; however they strive to find an innovative solution with a sincere intent to benefit those who are at the receiving end.

Citing a recent example from SAT, an exam conducted in US for admission to colleges. Over a period, people have tried influencing and getting the best for their wards but the system has evolved and stopped those mutations.

You might have heard an example of how influential parents bribed their way into prestigious colleges. So also, those safeguarding and defining the system have modified it to provide a benefit to those students who struggle in adverse situations. This is similar to the picture I uploaded in my blog, wherein these new laws are implemented to create equal playing field for those coming from adverse situation.

They call it ‘Adversity Score’ and those students facing such disadvantage get additional scores to make these students stand on the same pedestals as those who are from affluent background. This is worth reading.

Link below https://www.brookings.edu/blog/the-avenue/2019/05/17/students-need-more-than-an-sat-adversity-score-they-need-a-boost-in-wealth/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=72802588

While reservations have created another chasm in the society by creating an artificial class of sufferers, such things can be mitigated by creating a mechanism similar to ‘Adversity Score’ for SAT. However, I am staying away from making any recommendation as it needs a thorough understanding of the root cause. It is upon those who strongly feel the need for change of reservation system to evaluate and come up with an action plan.

McKenna’s Gold and Moral Dilemma

Yellow Metal – From Nanotechnology to Currency Buffer (Gold Reserve)

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For centuries now, we are aware of the value of Gold. Gold Standards have, in fact it has taken a central place in our nomenclature and reference. It is not surprising to see that Gold has made a foray into nanotechnology – from diagnostic tools, to conserving solar power to touch screens and advanced data storage. However, to me, the most influencing impact of gold is the gold reserve, that determines the health of the local currency of that country.

Known Gold and unreported Gold

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Current gold reserves for India stand at 580 tons. India is the largest consumer of Gold in the International market after China. However, it is said that, India has a maximum of yellow metal with its household, amounting to 23,000 -24,000 tons. Countries as close to that value are China and Turkey. Though US has the most amount of gold reserves, standing at 8000 plus tons, it has the least gold consumption amongst the top consumers of Gold worldwide.

If only Southeast Asian countries like India bring the Household Gold on record and to international reserve, it would probably be one of the most influencing factor in circumvent the pressure on the national currency and buffer against the intransigence of fluctuations.

How do we bring the household gold to national reserve?

Of course a change of mindset is paramount. However, more than mindset, much of the gold is from unreported earning. That makes the conversion difficult. However, let us presume, we have the owners ready to declare the Gold. That conversion to national reserve can be on similar lines as holding a piece of land. Once the household gold is considered national reserve, it will be easy to protect that part of the Gold from theft or threat.  It is definitely a cultural change, no one wants to declare the amount of Gold they have, so also, no one wants to declare the amount of cash or other assets they hold. Gold can follow similar lines. We have to overcome the dilemma of declaring Gold.

Why not to expand Gold Reserve?

Expanding Gold reserve will reduce the pressure on the economy and the currency. However, the status quo may be affected because of doing so. Just imagine a currency reversal. Exporter will be significantly affected as exported products would become costly in the international market. However, imports too will be cheap. Products made abroad, ‘Foreign Made’ will flood the streets. Expat dollars flow will be reduced. All these will need a huge modeling to understand the impact. However, it would certainly equalize the value of currency (and efforts) of the common men.

The Ailment – Part 2

 

As per the statistics published by as per the 8th Edition of the Status Paper on Government Debt released on Jan 19, 2019, the latest data available till September 2018, the total debt of the Central government stood at Rupee  82,03,253 crore, the corresponding amount till June 2014 was Rs 54,90,763 crore, the Finance Ministry’s data on government borrowings shows.

While the same white paper also projected the GDP to hit 7.5%. However, the rising GDP is not to the credit of the Government, Federal or State. So, despite the economy expanding, we still see mounting debt. To put it simply – those who are working hard, are truly increasing their output. However, servicing the union is drastically mounting. Let’s review select findings from the white paper.

  1. 35% of the current 82 Lakh crore debt is incurred in the last 4 years
  2. Velocity of debt accumulation was .84% from 1948-2014
  3. Velocity of accumulation has climbed to 1.14% since 2014-2018

 

Not sure if the spike since 2014 can be ascribed to devaluation. However, Its not Modi alone, let’s understand, he could not control the spiraling debt, it has been mounting since last 60 years. We and our media tend to be partisan, never issue based and our partisanship drowns our national interest and what we call as nationalism is actually pseudo inflated nationalism.

This is also a reason for the Rupee to depreciate against internal currency basket. That depreciating Rupee obviously makes imports, borrowing and servicing debts costly. Earlier i shared a clip on farmers loans. Unfortunately, farmer and the poor, who occupy the bottom of the food chain, really get squeezed due to these national macroeconomic malady. The unfortunate truth is that we are caught in the sensational and placating democracy model. This model induces the political dispensation to make concessions that in itself incur spiraling stare support for the masses (to win their votes). Consequently, the lure of power or its sustenance as a ruling party draws us further into this debt cycle which gets exponentially exacerbated with the passage of time. What’s the root cause? Of course the cause and effects are admixed above and the video by Justice Markandey.

Political Servitude to Pseudonationalism and Sensational Politicking.

 

This video from Justice Markandey is old but the facts remain true. We blame China but look at the quality of life, we find wrong when 1 million party workers are punished for corruption (of course there are underlying political reasons too), but corruption is punished, nepotism, communalism all are treated as perverse to the development of the nation. Here, we have pseudo nationalism, pseudo sense of religious identity and pseudo sense of glorious past to cajole us. However, the fact remains that the institutions formed to safeguard the purpose, themselves are under duress from our own sense of tolerance and indulgence. Be it corruption, communalism, nepotism, casteism, favoritism, we have totally devalued and eroded the system with our kind of Governance. Justice Markandey is bold to articulate that pain but rustic and rude to suggest its resolution. The next wave will capture, not our culture but subject us to servile economic conditions due to financial imperialism, mostly from east.

‘Waiting for Godot’ , a play by Samuel Beckett, in which the characters wait for the arrival of Godot (a fictitious character) who is a supposed to be a panacea for their problems. Our 70 year history is no different; we are waiting for the messiah who will help us through this impending economic imperialism. However, like the characters in Samuel Beckett’s novel, we too are engaged in a variety of discussions while we are waiting for Godot.

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India’s debt up 50% to Rs 82 lakh crore in Modi era