Tuesday, August 09, 2011


Last week, while at a petrol bunk, in a moment of weakness, I entered my name and my mobile phone number with an attendant there. He lured me into the trap by offering to include me in a lucky draw. I have, in the past, won a suitcase from VIP through a lucky draw. This time, I was hoping for an all paid vacation to Port Blair.

Two days later, a tele-girl called.

"A very good evening to you sir. Can I take two minutes of your time, please?"

"Yes, what can I do for you?"

"You had entered your name in our lucky draw, sir. Do you own a Mahindra four-wheeler?"

"No, I do not."

"Do you own any other four-wheeler?"

"Yes. A Ford."

She must have gasped. A Ford? A Ford? She then dropped the bombshell.

"As a special gesture, we would like to invite you to a membership from Club Mahindra, a holiday..."

I cut her short. "No, I will not be interested."

"Why sir?"

I was floored. How could I answer this question? I had to think quickly on my feet. "I already have a Club Mahindra membership." That was an excellent answer. She waited for a second and threw the next dart at me.

"Sir, in that case, will you refer your friends?"

"No. I don't have any friends that I can refer. If I did refer them, they wouldn't remain my friends."

She thanked me and cut the call.

This seems to be a nice way of collecting phone numbers and addresses. Offer some freebie and idiots like me will give all our personal details. Then, you can resell the database to every tele-marketer.

Seems like a good idea. I should try this somewhere myself and sell them all books.

Monday, August 08, 2011

US credit rating in Tamil Media

Today's Dinamani has an article on how India is in the 14th place of Nations that have lent money to the USA. Though technically correct, the US didn't beg India to borrow some money. US Govt. issued treasury bills and India, along with several other Asian countries, stood in line to subscribe to them. It was not the lender setting out stipulations; but the borrower setting out terms. Countries like China, Japan and India had no other option but to take up these highly rated paper, even though the yield was low because they had dollar surplus. The headline for this story in Dinamani reads: US still owes India Rs 1.83 lakh crore, suggesting that there is a likelihood of US running away without repaying in full.

Dinamalar has a longish article titled US getting hammered, credit rating brought down. The article is reasonably complete but wouldn't make much of a sense to a Tamil reader, as it lacks the context. This is more a news wire story translated into Tamil.

As an aside, Dinamani pronounces Poor correctly, Dinamalar makes it 'puvar'.

I couldn't locate any story in Dinathanthi, which I am looking forward to. Dinathanthi tries its best to make such complex news easy to the lay Tamil reader, with the correct context.

Thursday, August 04, 2011

Land grabbing in Tamil Nadu

The new government headed by Jayalalitha is on an arresting spree. Yet another former DMK minister was arrested today on charges related to land grabbing. Already one former DMK minister is in judicial remand. There are talks of possible cases against MK Azhagiri's wife Kanthi.

Land grab is the easiest way to make money for the politicians. They do this when they are in power. Grabbing government land (poramboke land) without a clear title is the easiest. Then, the acquisition can be legalised over time with appropriate orders. I am not fully aware of the process. I will be grateful if someone can educate me on this.

The second method is legally acceptable but morally repugnant. The Chief Minister uses his discretionary powers to allocate land owned by the government to his chamchas at rock bottom prices. Then, this land is parcelled and resold to developers for a huge profit. This is a widespread issue. Former Karnataka CM Yeddiyurappa is accused of this (amongst many wrongdoings). Jaffer Sait, ADGP (now suspended) of Police and head of intelligence in the previous DMK government has been accused of this. So are several others.

The third method gets into the murkier world of underground. You threaten poor, invalid and meek with dire consequences and take over their land on forged power of attorney documents. The meek will simply suffer. They cannot complain as the police will not file cases against the ruling party goondas. They give up. Ugly though it may be, this seems to be the perennial resource for the politicians.

It is on this account that almost everyone in the DMK and his dog is being accused off now. There have been such allegations against the jailed MP and former telecom Minister A. Raja. Kanimozhi, Rajathi Ammal and their alleged benamis are accused of such doings. As mentioned above, Azhagiri is accused of the same. Almost every single minister in the previous government and probably all the MLAs are accused of this. I am yet to hear of Stalin or Karunanidhi being directly accused.

One of the moves by Jayalalitha widely acclaimed (except by the DMK) is setting up a special complaint cell for this purpose. And the cases are streaming in.

Nobody, except the die-hard DMK cadre, believes that the cases are foisted falsely on these people. DMK leaders are rather talking about inaction on cases related to AIADMK people during the 2001-2006 period. (Surely DMK government should have processed them then?)

Sanctity of the private property is paramount in our modern democracy. No one has the right to take away the land owned by ordinary people without convincing the particular person and paying the right market rates. (Government with its eminent domain is another issue and needs to be discussed elsewhere.) That politicians can easily break this is a dangerous scenario. I applaud Jayalalitha for this aggressive move, even though it has been taken to spite her opponents. This will set a chain of events whereby DMK will prosecute the evil doing of AIADMK in the next term and so on. In the meantime, the civilians will get emboldened to create institutions to prevent such fraud being committed on them by thugs of the political parties.

Till then, we will watch with glee one more former minister going to jail.

Saturday, July 30, 2011

US Debt Crisis

It is generally accepted that nations can have a certain amount of debt in their books. Especially if their economy is growing steadily. What should be the percentage of this debt compared to the size of the national economy (GDP) is a matter of debate.

This sovereign debt is useful, in that it offers a lot of old people an excellent investment possibility. Especially if the debt is from a top-notch country, whose economy is stable, whose paying power is steady, and is rated well by the rating agency. The US was one such. Pension funds normally subscribe to such debt. Countries with excess foreign exchange will subscribe to this. Right from China, Japan, India, Russia and Brazil hold the US treasury bills.

However, US economy has been going downhill. US govt. deficits have been increasing drastically. There are several infographics explaining the crisis very well. This Washington Post graphics shows that for the current year, the revenue deficit for the US govt. will be nearly 33%! That is, for every $3 the government spends, it has to borrow $1 from others. One can look through the spending and see that a big chunk of the spending is in Social Security, Medicare and Medicaid (amounting to roughly 50% of the total spending), another major spending of nearly $900 billion on defense and an interest repayment of around $251 billion.

This level of borrowing is unsustainable. Their existing debt by the end of 2011 will be $15.5 trillion. It is also expected that over the next 10 years, they will have to borrow a further $6.7 trillion. That is, by 2020 (or 2021), the US national debt will be around $22 trillion.

This is a nation, whose financial health is extremely weak. All indications are that it is not going to be fixed even in the coming decade. US debt is likely to become costlier; that is nations that are lending money to the US will start charging more interest, making the interest repayment costs very high.

What could be the alternate solution? Drastic budget cuts (which will sound very republican, but that is the only solution) including in defense (which the republicans don't like), increase in tax rates for the corporates (very democrat-ic) and enforced compliance, more spending in own healthcare infrastructure like Britain rather than the spiralling cost of Medicare/Medicaid etc.

American system of Social Security is too complex. It is not easy to completely dismantly that. These are people who have paid taxes over the last few decades and it is not fair on the part of the government to simply cheat them out of their entitlements. But the government has to work out some deals to ensure that future Social Security payments are not too high; which would also mean that they should probably start charging less Social Security taxes now. Which would mean, they will have to find some other way of increasing revenue, which would mean increasing income taxes. But that may not be sufficient.

Therefore, the federal government should consider imposing a federal sales tax across the country, over and above any state sales tax. Even a marginal 2% across the board sales tax (from cigarettes to liqour, consumer goods to heavy machinery, gasoline to food) will result in substantial earnings for the federal government. It is not clear to me whether there is any constitutional provision that will make it impossible for the federal government from charging such a tax. If so, it is the job of the legislators to amend the constitution appropriately. I can't see any other way out.

Friday, July 29, 2011

BJP and Yeddiyurappa

Why is it so difficult for BJP to sack Yeddyurappa? That the man is corrupt is so obvious. The evidence is mounting. If he is not sacked immediately, then BJP will lose the position it has built in Karnataka. That Yeddyurappa has contributed to that should not be reason enough to stick to him now.

BJP can gain a lot by letting Yeddyurappa go and after 5-6 months call for a flash election with someone else - perhaps Ananthkumar - at the helm and may end up with a better majority that what it has currently.

Wednesday, July 27, 2011

Poor Economics

I am reading the book Poor Economics: Rethinking Poverty and the Ways to End it by Abhijit Banerjee and Esther Duflo. I haven't read a book that has impacted me more. Every page has made me pause and think. There is so much to quote from it and discuss, I will be violating the fair use policy on quotation. Do read this book. I strongly recommend it. Here are couple of paragraphs from the book that I read yesterday:
In a study [in India] designed to find out whether ... prejudice influenced teachers' behaviour with students, teachers were asked to grade a set of exams. The teachers did not know the students, but half of the teachers, randomly chosen, were told the child's full name (which includes the caste name). The rest were fully anonymous. They found that, on average, teachers gave significantly lower grades to lower-caste students when they could see their caste than when they could not. But interestingly, it was not the higher-caste teachers who were doing this. The lower-caste teachers were actually more likely to assign worse grades to lower-caste students. They must have been convinced these children could not do well.
And then, as a continuation,
Children themselves use this logic when assessing their own abilities. The social psychologist Claude Steele demonstrated the power of what he calls "stereotype threat" in the U.S. context: Women do better on math tests when they are explicitly told that the stereotype that women are worse in math does not apply to this particular test; African Americans do worse on tests if they have to start y indicating their race on the cover sheet. Following Steele's work, two researchers from the World Bank had lower-caste children in the Indian state of Uttar Pradesh compete against high-caste children in solving mazes. They found that the low-caste children compete well against the high-caste children as long as caste is not salient, but once low-caste children are reminded that they are low-castes competing with high-caste children (by the simple contrivance of asking them their full names before the game starts), they do much worse.
How do we work towards helping every child achieve its fullest potential? How to we eradicate the ills of a caste system that has psychologically impacted Indians (both "high" & "low" castes) that one's intelligence and ability are linked to the castes in which they are born, even though it has been proven convincingly by scientists that such is not the case?

Tuesday, July 26, 2011

RBI increases Interest rate again

In what is certain to seriously affect the middle class consumers, RBI, afraid of inflation, has increased the interest rate yet again, by 50 basis points today.

My current home loan (which I will be exiting by September 2011) with ICICI Bank, is at an interest rate of 14.25% and that was before the current increase. Not sure, if ICICI will promptly up it to 14.75%. I am shopping around with other banks, and the interest rate appears to be more like 10-10.5% depending on the type of facilities you are looking at. This could also go up by the same 50 basis points.

Surely, there are better ways of handling inflation? Where will this lead us to? Industries will collapse at this sort of interest rate. Middle class will stop buying houses and vehicles. This will in turn affect the manufacturing and white goods sector, and so on.

Raising interest rates has hardly impacted the inflation though. So why do the same thing again and again and hurt the middle class?

Raja's defense

It is still unclear to me what CBI's case is against Raja. If they say that he has taken money from Telcos to give them license without going for auction, then CBI has to provide the proof for the same - money trail, evidence for conspiracy etc.

If, on the other hand, they are showing that his not auctioning the spectrum meant that companies like Swan and Unitech making "profits out of re-selling the spectrum" resulting in loss to the exchequer to the tune of around Rs 22,000 crore, then the case is a non-starter.

Raja's defense yesterday, focused on this very issue.

Monday, July 25, 2011

Interview with Bill Gates on his Educational Philanthropy: WSJ

An excellent interview in Wall Street Journal with Bill Gates:

"I watched the movies. I saw 'To Sir, With Love,'" he chuckles, recounting the 1967 classic in which Sidney Poitier plays an idealistic teacher who wins over students at a roughhouse London school. "But they didn't really explain what he was doing right. I can't create a personnel system where I say, 'Go watch this movie and be like him.'"
Instead, the Gates Foundation's five-year, $335-million project examines whether aspects of effective teaching—classroom management, clear objectives, diagnosing and correcting common student errors—can be systematically measured. The effort involves collecting and studying videos of more than 13,000 lessons taught by 3,000 elementary school teachers in seven urban school districts.
"We're taking these tapes and we're looking at how quickly a class gets focused on the subject, how engaged the kids are, who's wiggling their feet, who's looking away," says Mr. Gates. The researchers are also asking students what works in the classroom and trying to determine the usefulness of their feedback.
 It is important for us in India to carefully follow what Bill Gates is doing in the educational space. Over the last 65 years we have invested a lot in education (not enough, but still a lot). It has not achieved what we wanted.

We need to look at improving the quality of education as much as the quantity of education.

Tuesday, March 22, 2011

AIADMK - DMK final positions

The final positions are out.

AIADMK has booted out MDMK from its camp, as Vaiko, the leader of MDMK has not agreed to the offer from AIADMK. The rest of the alliance partners are intact. So the final tally is:

DMDK: 41
CPM: 12
CPI: 10
MMK (Muslim party): 3
PT (Dalit party): 2
AISMK (Sarath Kumar): 2
Indhiya Kudiyarasu Katchi: 1
Muvendhar Munnetra Munnani: 1
Kongu Ilainjar Peravai: 1
Forward Block: 1

Opposed to this is DMK-Congress-PMK alliance.

DMK: 119
Congress: 63
PMK: 30
VC (Dalit party): 10
Kongu Nadu Munnetra Kazhakam: 7
Muslim League: 3
Others: 2

In my view, AIADMK has a minor edge over the ruling DMK. Congress is the biggest weakness in the DMK grouping. There will be considerable infighting within Congress (as is evident in their not announcing the candidates so far). While there will always be a certain degree of unhappiness in every party for the given seats, it is very important how quickly a particular party chooses its candidates and how quickly they start campaigning in their constituencies.

In the last elections, DMK's manifesto was considered a major reason for winning the elections. One has to see the manifesto along with the usual anti-incumbency combined with a reasonably strong grouping put together by DMK. This time DMK has again come up with a loaded manifesto. The battles are not anymore fought with ideology; it is all about freebies.

Last time it was colour TVs. Now it will be wet grinders or mixie - your choice. And several more. I will write in detail about what is on offer from DMK.

AIADMK has not yet come up with its manifesto. It may not have many freebies in them. It will have to be seen whether people are swayed by the offer a wet grinder or a laptop.

Saturday, March 12, 2011

DMK-Congress: A shotgun wedding

After several days of intense negotiations, some tantrums and a few back room deals, the ruling DMK has given 63 seats (out of 234) to Congress in the coming assembly elections.

This is extraordinary as this leaves DMK only 121 seats to contest. PMK which was earlier given 31 has been downsized to 30. VCK has been given 10, Kongu Munnetra Kazhagam 7, and 3 more to smaller parties. This would mean that even if this combine wins the assembly elections (very unlikely), DMK will need Congress and PMK to form a coalition ministry.

Congress demanded an agreement to form a coalition government before the elections while DMK disagreed with that. But now, de facto, Congress has achieved precisely that.

The 'sell out', as it is seen by the DMK cadre is alleged to be linked to 'going slow' on CBI's investigation into 2G scam. If indeed this allegation is true, the future cannot be bright for the combine.

DMK is between a rock and a hard place. Having tasted victory in securing the seats they wanted, Congress will now continue to tighten the screws, and demand the choice of seats which are considered winnable. This will only result in more consternation amidst DMK and PMK cadre. The end result is a poor showing by the cadre.

At the end of the day, beyond the supposed 'money power' and 'bogus voting' that DMK is accused of, it is the enthusiastic campaign by its supporters that has helped the party and the coalition to win the previous elections. But this time, the cadre do not seem to be happy at all.

On the other side, Jayalalitha has not yet worked out any deals with MDMK, CPI and CPM. She probably thinks they have nowhere else to go, as DMK coalition is complete. So she can play hardball and give these three together around 30 seats and no more. These three, on their own, are incapable of winning a single seat. The communists will probably have the ability to hurt the winning chances of either grouping in 4-5 constituencies.

MDMK's Vaiko is a sad case. He has been loyal to Jayalalitha, who is not known much for rewarding such loyalty. Vaiko has seen his support base dwindle by the year and defections have eaten into his party. He is in no position to negotiate for anything from Jayalalitha. He can consider either merging his party into AIADMK or take a political sanyasa. The communists are also fast becoming irrelevant in a reasonably equitably growing state like Tamil Nadu. Their earlier power bases such as the Thanjavur agricultural delta and Coimbatore industrial region have probably deserted them fully now. Agriculture has dwindled in Thanjavur while DMK, AIADMK unions have replaced the communist power base in Coimbatore.

Back to DMK-Congress. There will be another round of intense feuding, with open dissonance, followed by a few more CBI raids. Then Manmohan Singh and Sonia Gandhi wil appear together with Karunanidhi in a couple of well publicised public meetings. But the frosty relationship will be visible for all to see.

I can't see how DMK alliance will win this time, money, Azhagiri and Stalin notwithstanding.

Saturday, March 05, 2011

AIAIDMK - DMDK: a winning combine?

DMDK has finally done a deal with AIADMK.

All these *K parties are likely to confuse the non-Tamil Indian. But the Tamils thrive on this. The tentative grouping on the AIADMK front is now as follows (as told by a friend):

DMDK (Vijayakanth): 41
MDMK (Vai.Ko): 18
CPM: 12
CPI: 10
MMK (Muslim Party): 3
PT (Krishnaswamy, Dalit party): 2
AISMK (Actor Sarath Kumar): 2
FB (Actor Karthik): 1

They add up to 233. So one seat is still unclear. Deals have been clinched with only DMDK, PT, MMK and FB. Though others have not yet signed the deal, this looks most likely.

Compared to this, DMK has not yet worked out the deal with Congress. DMK cadre are angry with Congress in the wake of the 2G imbroglio. There is a feeling amidst DMK folks that Congress is putting undue pressure on DMK - pressure beyond the normal electoral negotiation such as action on A. Raja and Kanimozhi on the 2G scandal, Shahid Balwa's loan and/or investment in Kalaingar TV, selective leaks from Radia tapes and so on.

Such a marriage made at gun point will not work. They will actively work towards defeating Congress in those constituencies.

On the other hand, the AIADMK-DMDK combine will be out on the streets starting today to canvass heavily. How far will Marans and their TV power come in handy to help DMK is questionable. The patch up worked out between Marans and Karunanidhi family seems too fragile. Stalin vs Azhagiri is another major factor afflicting DMK.

Considering all this, I think AIADMK-DMDK combine will walk away with an easy win.