Your Move RBI

The upcoming RBI policy meet will be an interesting one to watch out for. The monetary policy has been quite hawkish on interest rates and inflation targeting of late. Based on their statements after the policy meets, one can understand that the majority of the committee is led by a very conservative mindset that is more concerned about avoiding inflation rather than stimulating growth. With signs of an economic slowdown hitting home, the policy meet may just have come at the right time.

If the government had its way, it would prefer a significant rate cut which would enable higher private investment. Yet, we have seen time and again that the economy does not function that way. It usually takes months before RBI rate cuts are actually transferred to the borrowers and that too in a Rajiv Gandhi style, only 15 paise reach the public for every rupee spent by the government. Banks have had surplus liquidity since demonetization which can be evidenced by low interest rates on deposits. However, banks have burnt their hands and the NPA problem refuses to die down making ambitious lending even more dangerous.

A narrative is being created today that Indian economy is in the doldrums like narratives created before, that of India being intolerant or cow vigilantes and lynching mobs having a free hand. The fact is that when structural reforms like GST and demonetization are undertaken, you cannot expect the economy to absorb it without shocks. The same way that when you are driving a car on the highway and your engine overheats, you can’t expect it to correct itself while you go on driving at 100kmph. The economy needs a start-stop button to reset itself.

Yet, what is important to note is that a stimulus is not the answer to a restart. The government is obviously aware that breaching the fiscal deficit is not the answer to its media-hyped woes. It must therefore hope and rely on a tight-lipped monetary policy committee to provide some easy credit into the market. The MPC on its part must again focus on how its inflation reading has been faulty in the past. Former Finance Minister and full-time critic of the current finance minister, P. Chidambaram has also advocated a cut in rates. Chidambaram actually advocated a 100 basis points rate cut but was quick to realize that the MPC cannot stomach a rate cut so big, lest it be seen as being in bed with the government.

The MPC must not worry about media opinions about its independence or competency. A bunch of arm-chair economists and prejudiced media personnel cannot decide monetary policy at the highest echelons of Indian economics. That a rate cut is required seems to be obvious to the government, but one believes that the MPC would be unwilling to cut rates at two back-to-back meetings even though it may be of the lowest possible number i.e. 25 basis points. 

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Farmers = Money-Guzzling Demigods


India’s agriculture industry has been broken for decades without any sustained reforms being undertaken to improve lives of farmers and consumers. It was expected from the government of the day to undertake structural reforms, seeing as how Narendra Modi has been targeting doubling of farm incomes. However, like past governments, Modi’s men have also sought to target the symptoms rather than the root cause of the disease. The key to the destruction of the farm sector in India has been the loan waivers. Seen as a farmer-pleasing populist measure, loan waivers make little economic sense, if any. The agro industry is broken because of low productivity and disguised unemployment. Farming still employs about 50% of India’s workforce while contributes roughly 13.7% to the GDP as per 2013 estimates. Clearly India needs to transfer this idle labor elsewhere. Farming in India is still largely dependent on rains and other modes of irrigation are vastly underdeveloped. 

Productivity of Indian agriculture is pathetic owing to smaller land holdings of farmers and lack of irrigation facilities. Indian farmers have not been adept at adopting technology which has led to their own downfall. The opposition to Genetically Modified (GM) crops by groups with vested interest and lack of scientific knowledge has vastly complicated the scenario. Changes are required not only at the source but also in the distribution channels which are thronged by middlemen who work neither in interest of farmers nor in interest of consumers. They serve the sole purpose of inflating prices by hoarding and depriving farmers of their rightful share. 

Right from the times of “Jai Javan, Jai Kisan”, India has cultivated an unblemished and untainted image of farmers which is misplaced. Farmers must occupy the same position in the Indian economy as any other worker, professional or businessman. By granting them a noble status and not permitting market forces to have a free hand in agriculture, the governments have effectively destroyed the agriculture industry and doomed lives of farmers to the extent that farmers do not wish their wards to enter the farming industry. Farmers themselves are not beyond reproach. They have done their fair share in tarnishing their own image by destroying crops when a surplus is produced and vehemently seeking bail outs. By persisting with exempting agriculture income of farmers from income tax, they have been granted a superior status and this emotional attachment to farming must end. Are poor people in other sectors less vulnerable and important than farmers? 

The reality is that farmers, constituting more than half the working age population, are far too important a vote bank. This has given them a disproportionate bargaining power. Yet, history has shown that whenever a group of people has been used as a vote bank, they are the ones to have suffered at the hands of the ruling dispensation. By empowering their vote bank, the political party allows them to think for themselves whereas by ensuring the continuation of their poor and downtrodden status, the politicians can champion themselves as their knights in shining armor and peddle votes. Take for example the Muslims, the Dalits and now the Farmers.

The vilest economic decision ever taken has been farm loan waivers. It is the worst form of dole out of taxpayers’ hard earned money. Farmers have learned how to hold the government hostage and seek waivers from them. Not only does this lead to poor credit discipline, it makes banks wary of advancing credit to farmers and thereby makes farmers easy prey for moneylenders. This is why most private sector and foreign banks shy away from lending to farmers but state run banks with their priority sector commitments must undertake this charade. If home owners with their burden of EMI on home loans start committing suicide, will the government start waiving home loans too? Governments have aggravated the issue by not pulling out workers from the agro industry and now these farmers, dependent on rain fed irrigation have no way out when the rain gods fail them. The BJP has not learnt from the mistakes of past and in order to please this massive electoral vote bank has decided to grant such temporary lotteries to farmers. If waiving loans of farmers is acceptable, why not waive other forms of loans like student loans, home loans, personal loans etc. making the list endless.

The sole savior of the farming sector would be a robust manufacturing industry wherein surplus labor from farming and allied industries can be transitioned to a manufacturing industry allowing farmers as well as farm labors a better standard of living. This, coupled with better productivity, can allow a sustained reform of the sector. It can be achieved by instituting better research institutes for this sector, promoting GM crops and building a culture of technologically advanced farms. Also required, is the image revamp of the farming sector and not projecting them as demigods but as a small part of the larger economy. The sector has long escaped free market forces because of the superior status granted to it. Reforms must be made to distribution channels by allowing farmers to sell their output directly instead of through the Agriculture Produce Market Committees, known for their corrupt and inefficient working.

An idea that has not been explored well is corporatization of farms. Allowing corporates to buy huge tracts of land and conducting agricultural activities is a sure-shot way of revamping the sector as it will ensure better productivity, formalizing farm labor and better servicing of consumers. It will expand revenue streams for the government, solve the problem of distribution of the produce, lead to employment of better and superior technology and transfer risk from individual farmers to corporations which have a greater capacity to absorb it. This will however require grand structural reforms to irrigation facilities and allowing corporates to map out their own distribution channels. It will upset several vote banks but in the long run will lead to gainful employment of labor and better productivity thereby forcing the agriculture sector to pull its own weight in the economy. 

Farm loan waivers do nothing but give temporary relief to farmers until he takes a loan again from a government bank that is obliged to grant him a loan; poor rains lead to a crop failure; he defaults on his instalments; farmers join hands and demand loan waivers; governments buckle under pressure because well, farmers are superior to the rest of the populace and our money must always bail them out.

India’s Tryst with Cows and Lynching

The India of the day is viewed by many observers, within and outside the country as a Hindu Pakistan; ergo a nation founded on the false belief of the supremacy of a religion. We are now viewed as violent cow worshipping heathens who will do anything in the name of an animal. The truth though is hidden beneath layers of fiction and prejudices. Multiple new age left-aligned blogs and newspapers have come up that serve the sole purpose of portraying the BJP as a downright communal party for its avowedly pro-Hindu stance and portray Muslims as the victims of Hindu violence post the election of Modi.

There have been attempts to gloss over violence of Muslims against Hindus, as in widespread riots in Bengal, and the role played by other political parties in stoking communal tensions and delving into appeasement politics. The point being that Hindus are no more violent than they already were before the BJP came in neither are Muslims being victimized more than they were before. The public will always react to a narrative that the media creates. Blogs and websites that come up by touting noble ideals of freedom of speech are nothing but openly left aligned mouthpieces that are out to convince you that India has descended into an Emergency and that the nation has been overrun by criminal cow worshippers who will lynch you if you eat beef. By equating a nation that upholds its constitution and judicial values to a nation that has descended into Emergency, the journalists are either propagating their stupidity or are trying to convey their anti BJP credentials.

Fact is that cow-related violence is nothing new in the subcontinent. A vast majority of Indians (93.4 % to be precise) as per NSSO 2011-12 data are non-beef eaters. Cows are revered in Hinduism not only on account of their religious significance but also their economic utility. According to Martin Harris, an American anthropologist, India’s rural economy is dependent on cattle. Cows provide milk, their dung when dried serves as fuel, and they are in Harris’ words “Indian peasant’s tractor, thresher and family car combine”. Cows can survive in drought conditions and are symbols of wealth. More than being a symbol of Hinduism, cows are a source of economic wealth for any person who owns them, regardless of religion.

There have been well documented cases in Indian history of illegal smuggling of cows across state and national borders. It is this illegality that elicits a response from cow worshippers who are often distressed by the hurt caused to an animal they hold so dear, which is noble if done by an American animal rights organization (read PETA) but intolerant if done by poor rural Indians. No one denies that there are cases of violence, but these occur in the garb of cow worship and often called as alleged cow related violence perpetrated by Hindu mobs on Muslims with no hard evidence and only hearsay. Mob violence is an ugly truth in India and by linking it to cows, the media is doing the nation no favors. It is stoking a communal flare that refuses to die down.

What angers the populace is the one-sided reporting and the creation of a larger narrative that looks over other aspects of governance. When riots in Bengal erupted because of a facebook post that Muslims found blasphemous, no one talked about freedom of speech but when AIB puts snapchat filters of a dog on Modi’s image we are well reminded of our constitutional liberties and rights to expression. How come after attacks on Charlie Hebdo, Indians were quick to change their profile pictures to Je Suis Charlie, but at home, the recent riots in Bengal are covered as a conflict between Modi’s man (the Governor of the state) and Mamta Banerjee and not in the nature of violence perpetrated by Muslims on Hindus. How come an attack on Amarnath Yatris or that of lynching of Kartik Ghosh does not invite as much as condemnation from the popular media? The fact that you are sitting there scratching your head as to who is Kartik Ghosh proves the biased reporting. Where are the #NotInMyName protestors now? Are they against lynching in general or against lynching of Muslims only? The nation is no nearer to being a Lynchistan than it was before. The nation is no more intolerant than it was before.

Muslims and Hindus are victims of violence all the same. But by promoting a narrative that India is witnessing Hindu terrorism due to the BJP or Narendra Modi is lynching of the truth.

Why Universal Basic Income

The idea of a Universal Basic Income has been mooted for quite some time across the globe in various forums. So much so that such an idea has entered the public discourse frequently and even the average Joe has an opinion about whether it must be implemented or not. Universal Basic Income or UBI is a form of social security in which all citizens of a country are assured a fixed basic income regardless of their economic or social status.

The recently concluded Economic Survey by the Indian Finance Ministry dedicated a chapter to UBI in which Chief Economic Adviser Arvind Subramaniam talks about deliberating on UBI in India. The fact is that UBI is not new for India. A trial has been successfully conducted in rural Madhya Pradesh. The results so far have been encouraging. Yet, to implement the scheme on a nationwide basis remains a humongous challenge.

For starters, India already has more than 1000 public welfare schemes run under the aegis of both the central and state governments. Although several of these schemes are running inefficiently, abolishing them will be political suicide, even for a politician as popular as Narendra Modi. UBI can only work if these other welfare schemes and subsidies are abolished in favor of the universal income. In the Economic Survey, Arvind Subramaniam suggests a level of $9 per month for every adult Indian as the ideal level for a universal income which amounts to roughly Rs. 600 per month per individual. Subramaniam suggests that this amount, equivalent to roughly 5% of the GDP can be recouped by re-routing money from the numerous welfare schemes.

This brings us to the next problem i.e. should the income really be universal? What sense does it make to pay a destitute homeless man the same amount as is paid to Mukesh Ambani. In fact why even include the numerous people like Mukesh Ambani in the scheme at all? Don’t worry, Subramaniam has you covered. As per his calculations, only about 75% of the populace will be covered under ‘Universal’ Basic Income. However, the Indian state has been historically poor in identifying and separating the poor and needy from the well-off. This has been the chief reason for the failure of the numerous welfare schemes, apart from rampant corruption and red-tape of course.

Yet another argument against UBI is that it promotes laziness or disincentivises hard work. However, one can safely assume that a basic income of Rs. 600 per month is not enough for sustenance but still may be enough to abolish all subsidies and yet ensure that the poor can afford the basic necessities. Several arguments were put forth that such an income might be wasted away on alcohol and gambling. On the contrary, in the trial held in Madhya Pradesh, it was observed that such an income actually empowered women instead of it being a source of misuse in the hands of the menfolk.

The chief benefit of UBI though will be that it would enable the nation to pull a majority of its poor above the poverty line. This achievement is superior to what the governments in the past 70 years since independence have been able to do. On top of that, it ensures that the government’s welfare spending suffers no leakages, thanks to an almost universal Aadhar coverage. The only logistical upgrade required would be an easy access to banking services or greater penetration of digital payments.

By putting money directly into the hands of the needy, the government is eliminating scope for leakage and corruption. It also eliminates the paternalistic role of the government in which it assumed that people were incapable of making decision as to what should they do with their money. The government effectively hands over this responsibility to each and every individual thereby promoting greater freedom and less interference.

UBI promises to be a revolutionary idea, yet it is the immaturity of Indian politics that prevents us from implementing this idea. Such a revolutionary step is bound to ruffle the opposition’s feathers. There are several interest groups who will be negatively affected and who may make it their life’s mission to see that such a step is never implemented. All that matters is the will of the ruling party to implement such a step and for the people to give the government some time before they can reap the benefits of such a bold policy decision.

Demonetization – The Rights and the Wrongs

As the nation comes to grip with the fact that their money has overnight become virtually worthless, one can’t help but wonder about the origins and consequences of such a move. By effectively wiping out 86% of the cash in circulation, the Narendra Modi government has created a cash crunch so terrible that it may take months for growth to bounce back. This is where the media opinion has acted as the executioner by looking at the problem from a short term and naïve perspective, not realizing the wide ranging ramifications it can have.

First of all let’s understand the basic reason for this move. As touted by the Modi government, this move is a fight against black money and fake currency induced terrorism. Note how the Kashmir unrest that was at its peak died down instantly with no purported truce between parties concerned. This is the greatest achievement of this move and some might feel everything after this will go downhill. Now the fight against black money is a lot more complex than any of us can imagine.

It’s been said that the money is not a stock but a flow and this is not an effective way to target black money. However, one must realize the amount of political capital that Narendra Modi has at stake due to this move. This move hits hard at the middleclass traders whose businesses are essentially undergoing a recession as people begin to postpone conspicuous consumption. This is the principal vote bank of Narendra Modi and this move has the ramifications to upset this class and turn them against this government.

If Narendra Modi has effectively gambled on his chances of getting elected again, one must realize the amount of planning and thought that could have gone into the action. The government is not stupid. It has the vast experience and knowledge of the tax authorities and the Reserve Bank at its disposal. It would be childish to assume that the government has no idea about the loopholes in this action. As I hear from the community around me, people with reach have effectively managed to convert this money into gold, real estate etc. Others have found ways through commission agents to convert their old notes into new notes by paying the same amount as they would have if they had honestly paid their taxes before. Therefore, even though they get to keep their money, it is still unaccounted and they have ended up losing as much as they would have if they had been honest about it. Also it can come back to nip them in the bud.

Chances are we shall soon see action against other means of stashing this illicit wealth. If that does not happen, this move could be considered a mediocre success as far as curbing black money is concerned. Then again, politics is a game of optics and illusion whereby Modi is showing that he has the balls to take action against black money whether that happens or not is a completely different issue. This sole display of a 56 inch chest can garner him several followers.

Let us now move ahead to the way this move has been received by the country at large. Several media reports talk of the situation as an economic emergency. Almost all sources of media have decided that this move is anti-people and anti-poor. What they fail to grasp is that while they try to win this battle, the government has already run away with the war. No matter how many interviews, testimonials and alleged deaths are shown, the fact remains that the populace has at large taken this as a sacrifice for the greater good and a large majority has supported this move wholeheartedly in spite of the hardships faced. A major reason for the poor people supporting this move is the feeling of schadenfreude that they get as they for the first time see the rich industrialists running around to save their money.

This brings us to another problem in the Indian economy. The fact that a poor person can experience joy due to the suffering of the rich in spite of the fact that he himself must bear the pain for no fault of his speaks volume about the hatred and dislike of money. If India wants to project itself as a vibrant and open place of business, it must take note of the socialist behaviors of its masses. If the rural poor abhor their richer counterparts so much, one wonders whether we can really industrialize ourselves. What this schadenfreude shows us is that the rural and poor India despises the ugliness of a richer lifestyle and this has proven to be the primary impediment to our growth in recent times. We must shed this leftist idealism and root out populism if we are to realize the dreams of the aspirational India.

Several people have blamed the government for ineffective planning and faulty execution. For this move to have any significant impact, the element of surprise was of foremost importance. If anyone got wind of such a move, it would crash before taking off. Not to mention the government would be unable to postpone it as the common man would have already got an advance warning. By recalibrating ATMs in advance or by bringing about a sudden spurt in printing of new notes, the government would have risked rumors breaking out.

Another criticism is that by bringing in the Rs. 2000 note before the Rs. 500 note, the government made a massive error since no change could be found for the higher denomination note. Yet if you think about it, by printing in advance a radically different 500 rupee note when another note of the same denomination was in circulation, the government would risk rumor mongering. The same cannot happen with a brand new 2000 rupee note. Also, it takes the same time and effort to print a single note, whatever denomination it may be. By introducing a note of higher denomination first, the government can bring liquidity in the market faster as it can print 4 times the value in the same amount of time by printing a 2000 rupee note. So instead of having no money due to ATMs running dry people face only a little hardship because they cannot find change. At least they have valid and legal tender money. As far as the move to introduce a new 2000 rupee note is concerned, even I have my reservations. Although economically it makes sense as the cost of the note will be several times lower than its face value.

Finally to round it out with the medium and long term benefits. Real estate prices are sure to see a drop due to reduced liquidity leading to preference for banking transactions. The economy will definitely see a drop in inflation as people run out of hard cash to make purchases. It promotes and inculcates a habit of engaging in digital transactions for as many people as possible. It also ends up as a valid successor to the Jan Dhan Yojana so if you did not open a bank account voluntarily, the government is forcing you to open one now. Also the money that doesn’t come back to the banking channel effectively reduces the liability of RBI, although I shall not go into the technicalities of it as it is still vague as to whether this can be transferred as dividend to the government or not. Terror funding has definitely taken a hit and the menace of fake currency has been halted.

In hindsight, one must say that this move must have been planned long back. The government started with promoting bank accounts for all, Aadhar cards for all and mobile transactions. The JAM trinity was a precursor to this move and one cannot ignore, that if you had been a part of this, you would not have suffered right now.

Is the NDTV Ban = Abolition of Free Speech?

If you’ve seen the news these past few days, you must be aware about the ban by the government on NDTV’s Hindi news channel. Yet another example of intolerance and an indication of the impending emergency under newly christened, Hindu India. It has been alleged that the government is restricting free speech and by controlling the media, it is restricting free speech in the vibrant democracy that is India. This charge is nothing new for the Indian government; it has faced numerous such allegations in the past over such “high-handedness”. But let’s examine the facts a little more clearly.

ndtv

Diving a bit deeper into the issue, one is forced to ask whether the issue really is about free speech or not? The charge against NDTV India is of causing security concerns by airing live-coverage of the counter terrorism operation undertaken by the Indian forces against the terrorist attack on Pathankot air force base. It is the Cable TV Network (Regulation) Act under which such an action has been taken by the government. The charge that the order was arbitrary seems made up. The government followed due process by issuing a show cause notice to the channel and then forming an inter-ministerial committee to look into the charges. The channel’s representatives were given a fair chance to put forward their case to the committee before such an order was passed.

The first issue at hand is how did this entire issue become about free speech? It is the Indian Constitution that disallows such an act and it is purely related to security reasons and has no relation whatsoever to free speech. NDTV has received support across media circles and the media has effectively changed the narrative by focusing on free speech rather than national security.

NDTV then goes on to argue how information that it displayed was not harmful to national security and was already available in the public domain. It goes on to justify its stand by making petty arguments about how it revealed only vague details and in no way harmed national security. I’m sorry but since when has NDTV assumed the role of the nation’s national security advisor? Since when did we give power to mike-wielding TRP hungry reporters to determine what is and what is not harmful to the lives of the nation’s soldier? If NDTV feels that it has adequately analysed that its disclosures were not harmful to the nation’s security, why doesn’t it approach the honorable Supreme Court and attain a stay order on this ban? If it feels that it is being single out when actually all other channels were displaying the same information, it has all the powers of the constitution (the same constitution that mandates this ban) at its disposal to appeal against this “tyrannical” order by the government.

I doubt whether the government is engaging in a witch-hunt and has decided to punish NDTV just for the heck of it. One must examine the reason behind the constitution of such a law. This law was mandated by the botched up job that the esteemed Indian media did during the 26/11 terror attacks. Terrorist handlers from Pakistan saw the action on live TV and directed the terrorists towards actions that generated panic and positions of the security forces. A local politician trapped in the attack gave a live interview to a news channel thus compromising the hiding position of all those with him.

Such botch-ups clearly reveal that the media is incompetent to decide on whether it conducts itself in a manner that upholds national security or not. There is no iota of responsibility in these so-called journalists and any attack or criticism on their profession is seen as an attack on free speech and democracy itself. If the media desires to be the fourth pillar in the democracy and the upholder of values of free speech and expression, it must look into this word called Responsibility. It is their hunger for TRP that makes them bloodhounds trying to find a story. If the Indian security forces had allowed any reporter to enter the air force base during the attack I believe the reporters would have found a terrorist and interacted with them in their clichéd Takiya Kalam, “Aapko abhi kaisa mehsoos ho raha hai?” If free speech is important in a democracy, a rider must be imposed on its upholders.

The media must understand that it is not above oversight in any case.

How The Third World War Is Likely To Start

The question to be asked about the Third World War is when will it happen and not if it will happen. Because obviously, a Third World War is long overdue. Let’s rewind a little; the First World War started after the assassination of Archduke Franz Ferdinand and other unsolved grievances, the Second World War was a manifestation of unresolved issues from the previous war. So how do you think the next war is likely to start? Let’s chalk out a probable scenario of how such a war is likely to take place.

The most likely scenario in my opinion was pointed out rightly by Mahamandleshwar Swami Akhileshwaranand Giri, chairman of executive council of the Madhya Pradesh Gaupalan Evam Pashudhan Samvardhan Board. So, based on his opinion, the Third World War will start over a cow. I had my doubts about it but acute insomnia over such a dreadful prediction and lot of free time brought me around to his viewpoint. Now, as we all know, in Hinduism cow is a much revered animal and people go gaga over religion.

3rd ww.jpg

Now that we have established that India will play a part in this role, let’s look at the spark which will ignite this war. No prizes for guessing, it will be Pakistan, because Indians lose their shit once we talk about Pakistan. Photos emerge of senior Pakistan politicians and army butchering unarmed Indian cows that have unwittingly trespassed into Pakistani territory and are labelled as RAW spies. Pakistan approaches the UN and releases tapes showing the cows eating grass on their side of the border near Lahore which is apparently a conspiracy to support secessionist movement in Baluchistan somehow. Mahamandleshwar Swami Akhileshwaranand Giri calls for complete boycott of all talks with Pakistan and mobilization of troops.

Donald Trump, the US President will call on Modi and in his trademark style will ask us to build a border wall so Indian cows will not trespass and get involved in this bloody conflict. What follows is a tweet marathon by Arvind Kejriwal in which he blames Modi and the BJP for promoting drug culture in Punjab (by citing Udta Punjab) which led to the cows, who were high at the time, not realizing that they had crossed the border. Rahul Gandhi goes to a gaushala in Punjab and dines with the cows to show his solidarity with their cause. Protests begin across college campuses in India, especially JNU, once Kanhaiya Kumar proclaims that the cows were actually Dalits and the government is not doing enough to protect them. From being a symbol of Hindu Nationalism, the cow has now become a unifying symbol of Indian nationalism. The nation unites as one in condemning Pakistan.

Reports surface that cows across India refuse to be milked until their brethren are revenged. Losses mount on Amul and Mother Dairy. In such a circumstance, the central government has no choice but to call for massive troop movements. India and Pakistan are on the brink of war for the fifth time. China falls behind Pakistan because the Chinese don’t give a damn about human rights, why would they care about cow rights? Organizations crop up around the world (funded by Mahamandleshwar Swami Akhileshwaranand Giri) calling for cow rights. Trump declares support for India because milk from Indian cows helped him ‘Make America Great Again’. Soon enough, American troops began arriving in Mathura to take blessings from Sri Krishna’s cows. “Holy Cow” becomes the war cry of the Indo-American troops as they train together. Other countries also start picking sides and as the first bullets are fired, the world is engulfed in yet another war leading a few people to ask, ‘How much cow is too much cow?’

Where India Shamefully lags behind Pakistan

Of course we know that India and Pakistan cannot be compared, India being this great country viewed as a future superpower while Pakistan being described as a radicalized failed state. However, there is one area where Pakistanis have put us Indians to shame. It is with a heavy heart and genuine shame that as an Indian I have to accept this. Pakistan is better at incubating startups than India is.

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Surprised? Well we have all these great IITs, so many engineering colleges, students etc. We have such a vibrant startup economy with success stories like Flipkart, Olacabs, Zomato, Inmobi and whatnot. Unfortunately, our government is not as supportive of these startups as Pakistan is despite the Startup India program.

You might now start to doubt me and ask “Well where are the statistics?” Unfortunately, no one has yet effectively compared our start-up economies due to their diversity. So here I present to you a comparison of Indian and Pakistani startups for your enlightenment.

Sr. No. Incentives India Pakistan
1 Free Unlimited Finance No Yes
2 Travel Facility Abroad for Business Purposes No Yes
3 Purchase of Devices and Machinery No Yes
4 Tax Free No Yes
5 Active State Support No Yes
6 Training and Development at No Cost No Yes
7 Conferences with Successful Foreign and Domestic Startup Founders at no Cost No Yes
8 Retirement and Family Pension No Yes

 

The above chart clearly represents why Pakistani startup economy is clearly in a much better shape than the Indian startup economy. The blame lies entirely on the Modi government as well as the previous governments for ignoring entrepreneurship and employment generation opportunities for the youth of this country.

India has failed to provide a robust infrastructure mechanism that allows founders to employ their full potential towards successfully converting a startup into a full-fledged business. Moreover the Indian mentality is such that parents would prefer their child to have a stable job with a stable salary rather than to venture out on their own. Since Pakistan’s overall economy is a bust, the youth do not find well-paying jobs and are forced to engage in self-employment which is creating an increasingly wonderful trend in this country of suicide bombers.

Moreover, unlike successful Indian startups, most of the Pakistani startups are involved in exporting their services which as everyone would agree is a lot better than capturing just the domestic market. While this does not mean that the domestic Pakistanis have not been influenced by these startups. A lesson lies here for the Indian bureaucracy and the government to allow a free hand to our startups and take a page out of their books.

Here’s a list of some of the most successful Pakistani startups:

  1. Lashkar-e-Toiba (huge exporter in the Indian market)
  2. Jaish-e-Mohammed (having vast business interests in India)
  3. Jamaat-ud-Dawa (JuD)
  4. Haqqani Network
  5. Al-Qaeda
  6. Taliban
  7. Indian Mujahedeen

While some of them may not have initially started out in Pakistan, they definitively would have failed but for Pakistan’s aid. Shame on India, for discriminating against foreigners; while Pakistan treats them all fairly. Even Indian startups are given adequate funding and machinery by Pakistan.

Yes we suffer from Brain Drain. Here’s why it can be good.

As Indians, brain drain or more euphemistically called human capital flight, is something we come across quite significantly. Owing to our high fascination for reproduction, emigration was always going to be a big issue for us. More troubling is the emigration of a highly skilled workforce. However, such actions are rarely unjustifiable. People leave the nation for better educational and employment opportunities which is their right.

A large number of Indian migrants pick the United States as a favored destination, ‘The land of the Free and the Home of the Brave’. The Indian-American community has established a niche for itself and counts among several model minorities. “A model minority is a minority group whose members are perceived to achieve a higher degree of socioeconomic success than the population average.” It is principally the Indian Americans who are considered to be the most educated and wealthy of the Indian immigrants. And it is this diaspora which can contribute much more to India than it ever can by reversing this brain drain.

Indian Americans occupy chief spots in politics such as Louisiana Governor Bobby Jindal and South Carolina governor Nikki Haley (both of them being the most notable). Indian Americans also occupy key spots in international tech giants such as Microsoft and Google (Alphabet Inc.). A Pew Survey found that the median income of Indian American household is higher than any other Asian subgroup at $88000 against a national average of $49800. We Indians take a lot of pride in throwing around names like Satya Nadella, Sundar Pichai, Indra Nooyi, Nikesh Arora, etc. Yet it is time we ask how most of these IITians can give back to the nation. It is time the Indian American community contributes to India what a robust Jewish American community contributes to Israel.

Being a shade under 3.5 million, the Indian American community has a significant clout in academia and government. Yet just as the Jewish American community identifies solely with Israel, we Indians lack a unifying identity towards India. What works in our favor though is that most of these Indian Americans still have a large amount of folks back home and the Indians, wherever they maybe, pride themselves in having a highly rooted family culture.

It is primarily this soft power which Narendra Modi attempted to target in his Madison Square Garden address. Just like a robust Jewish lobby, the Indian expats must work towards forming an active Indian lobby. While such lobby groups do exist, such as the US-India Political Action Committee, their success has been limited considering the economic might of the Indian Americans. In contrast, Jewish lobbies have significantly influenced American policy making towards benefitting Israel in the Middle East. One cannot emphasize enough how such a lobby can benefit Indian interests now that India is vying for a bigger role on the global stage.

The Indian diaspora abroad can contribute significantly to the Indian economy as well by investing in India and sending back remittances. It is time that the government provides significant incentives to this community to mobilize the soft power it holds such as a dialogue on dual-citizenship for the expats making life significantly easier for them. The time has gone for right-wingers like Subramaniam Swamy to question the patriotism of Indian Americans like Raghuram Rajan. While the nation may still feel let down by the massive scale brain drain, effective lobbying for Indian interests is the best way the Indian diaspora can contribute to our growth story. To quote a cheesy cliché, “You can take the Indian out of India, but you can never take India out of the Indian”.

Raghuram Rajan: The latest casualty of Indian Politics?

As the Indian economy decides to take a leap of faith from the throes of sub-par growth to an era marked by stupendous growth, it is the rock and roll central banker that stands in the way. Or does he?

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Raghuram Rajan, the awe-inspiring central banker is staring at the end of his term in September of this year with no evidence of an extension in sight. He took over the reins at the Reserve Bank of India in August of 2013 when inflation was sky high, growth prospects were well-nigh dead, the Rupee was in a tailspin and our hopes in a revival were as slim as the chances of a Donald Trump presidency. Since then, the wholesale price index has touched historic lows, the nation’s foreign exchange reserves have scaled historic highs and we have seen approval for eleven payment banks. The banking sector is churning for the better and hopes in a revival now look well founded.

It would be stupid to give credit for all this to Mr. Rajan. A lot of the credit goes to the Congress Party and Rahul Gandhi for being stupid enough to not get re-elected and for Modi to just show up on the scene.

Lately though, the Raghuram Rajan fanclub seems to be diminishing with the finance ministry being conspicuous by its absence. The BJP has unleashed its favorite bloodhound on Rajan, Mr. Subramaniam Swamy and I’m pretty sure Rajan’s not one to bite back. If all goes as per plan, Rajan might return back to the University of Chicago as a professor and Modi will get to put in another of his yes-men at the helm of the banking sector.

Mr. Rajan is not your everyday nationalist who is willing to put everything at line for the Indian economy. Yet, who is Subramaniam Swamy to put a question mark on Mr. Rajan’s nationalist credentials. One has no idea how the wheels of governance churn. It is not Mr. Rajan’s prerogative to stay here and fight the current regime tooth and nail. He should and will return to his cushy post abroad once the dust settles over his re-election. The question is, whether Modi and Jaitley want him to stay?

The stock market will show the nation that Raghuram Rajan is good news for the economy once it falls on the day a new central banker takes over. The autonomous Rajan is set to lose his job over his own opinions and refusal to fall in line with the government’s reading of what the economy needs. While disagreements are a good sign and no one wants conformity for the sake of it, but unleashing a hound like Swamy was a low blow from the government. While I derive utmost pleasure from the antics of Mr. Swamy in dealing with the Congress party, employing such tactics against a non-political technocrat who the government badly needs depict a lack of sensibility on the part of the government. It is unreasonable to think that Swamy is acting on his own motion. What has happened here is a tacit signaling from the BJP central command that Rajan is persona non grata and his handling of the economy is not in line with the government’s. To be honest, Rajan has had his job longer than Jaitley and Modi have and it was Rajan’s actions that have brought about a principal change in the banking sector and the economy at large before the Modi-Jaitley duo got a look in.

If Rajan decides to stay after the Swamy-show, it will be out of his big-heartedness. All that is possible if only the government realizes that Rajan is an integral part of India’s rise to being the next economic superpower and it is the combined efforts of a Modi-Rajan duopoly that will be required and not to forget an absolute absence of our left of centre friends, i.e. Congress, Kejriwal, Nitish, Mamata and whosoever harbors Prime Ministerial ambitions in the current political scenario.