Wednesday, 18 January 2017

Jallikattu Ban Protests - The Human Sea at Marina

The question is simple. There are a few articles in the Indian Constitution. With regard to Jallikattu, I will categorize them into two groups, the first group supporting it, the next group opposing it.

Group 1. It says, because Jallikattu is a tradition linked with religion and which had royal mandate in the past, it can’t be deemed illegal.
Article 51A(f) - to value and preserve the rich heritage of our composite culture
Article 29(1) - Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same
Article 25 - Freedom of Conscience and Free Profession, Practice and Propagation of Religion
(1) Subject to public order, morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practise and propagate religion.
 (2) Nothing in this article shall affect the operation of any existing law or prevent the State from making any law—
(a) regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice;
(b) providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus.
Article 13(3) - In this article, unless the context otherwise requires law includes any Ordinance, order, bye law, rule, regulation, notification, custom or usages having in the territory of India the force of law; laws in force includes laws passed or made by Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas 

Group 2. This group asks us to show compassion to all living, and making state laws illegal, which contravene central legislations. Note that Jallikattu act was declared as in contravention of Prevention of Cruelty to Animals Act.
Article 51A(g) - to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures;
Article 254(1) - (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause
( 2 ), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void
Article 21 - Protection of life and personal liberty No person shall be deprived of his life or personal liberty except according to procedure established by law

Added to this, there is this Congress mischief of banning bulls in performances. This is what resulted in scrapping of Jallikattu Act under 254(1).

If, two sets of articles in Constitution completely contravene each other, which one will take precedence? Who will decide that?

Now, look at what’s happening in Tamil Nadu today. The whole state is up in protest. This is the first time I have seen people coming out in numbers in the IT corridor. I myself have seen more than a thousand at a single protest site and there are at least 4-5 major protest sites. It’s not that these people are vagabonds trying to hog some limelight. They are college going students and job holders who have got very less time to spare. Estimates are that there are above 60000 people on the Marina beach. Government has declared a holiday for schools and colleges tomorrow.
If the state is up in arms in such a way, it simply means the something went wrong. Why are the people of the opinion that the courts erred?

The argument put forward by PETA is,

Jallikattu exploits bulls’ natural nervousness as prey animals by deliberately placing them in a terrifying situation in which they are forced to run away from those they perceive as predators. As PETA India has documented in Animal Welfare Board of India (AWBI)–authorised inspections, the bulls become so frightened by the mob of men who participate that they slip, fall, run into barriers and traffic – and even jump off cliffs in their desperate attempts to escape – frequently leading to broken bones or death. 
As can be seen in the documentation, jallikattu participants purposely disorient the bulls by forcing them to consume alcohol; twist and bite their tails; stab and jab them with sickles, spears, knives and sticks; cause them intense pain by yanking their nose ropes; and punch them, jump on them and drag them to the ground. 
PETA India has also documented that during races, bulls run because people hurt them. They’re hit with everything from bare hands to nail-studded sticks, and their tailbones are broken at each joint. This is as painful to the bulls as it would be to us if someone were to break our fingers joint by joint. 
In bullfights, the round ends when one of the frightened and injured bulls manages to flee – or is killed. 
Participants and spectators are also at risk. From 2010 to 2014, media outlets reported that there were some 1,100 human injuries and 17 deaths caused by jallikattu-style events, including the death of a child. The actual number is probably higher since many injuries likely weren’t reported in the news.

If this is not true and exaggerated, where are the counter arguments? Were they forceful enough to put forward their view? Or it is just a whimper as a formality? Now the question is this. Jallikattu is a traditional event. If there are some random and unplanned mishaps in it’s execution, do you plan to regulate it? It looks like Tamil Nadu government formulated some rules to regularize it, including health checks for both the contestants and the bulls, number of participants against a bull. PETA argued, people are not following the rules. Let’s say, if people are not following road rules, will you ban the roads? Or will you enforce a regulation? That is where the crux of the argument lies. Based on some random accidents, you cannot ban a sport. You will have to regulate it and make it workable. There are some arguments over selective breeding(only the bulls which stand untamed after the bout are considered for breeding increasing the vitality of the race) and the arguments over milk(casein argument) and the likes.

Greenpeace is charged with denting India’s development in the name of disturbing ecological balance(their success rate in India vis-a-vis the globe is an indication of that). Caesin argument over PETA is also of the same league. Is there any truth in that? If yes, what are we going to do?

The situation, as it stands today, is thus. There is a Supreme Court judgement which people are not happy with. People are not happy with the government’s efforts in this regards. But, fortunately, the anger is against PETA, which people feel, manipulated the court to give such a judgement. Something needs to be done, and done fast to assuage the public anger. The courts and the governments should command respect and authority from the people. They cannot be slighted and that’s for India’s good. It’s upto them to decide what to do.

PS: An interesting discussion over PETA’s arguments.

Tuesday, 10 January 2017

Indira is India and India is Indira - How Good are the Economics?

Discussing about the abolition of Privy Purses, I started looking into the impact of those momentous economic policies of Indira Gandhi during the period 1969-1973. The major ones of them are below -

1. Abolition of Privy Purses
2. Nationalization of Banks
3. Nationalization of Insurance Firms
4. Monopolies & Restrictive Trade Practices Act
5. Foreign Exchange Violations Act

Did they do good or did they do damage, we don’t know.

Let’s talk about just two persons who are impacted because of this - Maharani Gayatri Devi of Jaipur and JRD Tata.
The total expense to Indian government on privy purses was 4 crores in 1970. For whatever reasons, ranging from the royals supporting Swatantra Party to socialist equality, Indira Gandhi forced her way through with scrapping of the recognition of the royals. May be, it’s fine. But, just look at one scenario. Indira Gandhi can call Maharani Gayatri Devi stating, the government is planning to setup a new paper factory; can you use your contacts to get some money? A factory providing jobs to many just vanished because Indira Gandhi ensured that Gayatri Devi will never help her.
The Governement nationalized New India Assurance, which is still, one of the main general insurance firms of India from Tatas in 1973. MRTPA ensured that the Tatas can’t expand or acquire new companies. And FERA ensured that Tatas can’t invest overseas. Any business venture by the Tatas will be at the expense of the government permissions - a classic case of License Raj. After losing his brain child Air India, and after losing out this badly, will JRD Tata support government’s projects with full zeal?
Same goes for the banks. May be, they helped increase rural footprint. But, they were also used as agents to fund unprofitable enterprises, shooting up NPAs like anything.
In one fell swoop, Indira Gandhi has alienated all those with money and power. And not forgetting the fact that income tax in 1973-74 was an exorbitant 97.5%, this forced all the expense to sit on government’s shoulders, for which, again, nationalized banks were used.
To do justice, there were some acquisitions like the oil majors resulting in the creation of BPCL and HPCL which are doing reasonably well, even after all the competition from the world.
Whatever Indira Gandhi’s government did, may be, they ran the show for a while. But, was the show draining on the nation? Looks so because we had to go for a massive deregulation in 1991. And what have these given to us now? Some examples
1. Naxalite movement turned strongest in Bastar and Kanker. By killing the king of Bastar and by alienating that of Kanker, government removed the most prominent voices which those innocent tribals listen to.
2. ICICI bank is the third largest in India, far bigger than the nationalized banks like Andhra Bank
3. Same goes for ICICI Prudential, which is the third largest.
Tatas acquired Corus, Rosneft acquired Essar, Toyota does business in India and no one challenges Microsoft’s monopoly.
The reality is that whatever Indira Gandhi did, most of them are overturned by successive governments. So, what are her economic successes? And what are her mistakes? And, even today, can the mistakes be corrected?

Monday, 9 January 2017

Jallikattu - Worth the talk?

Well, on one side we have those omnipresent animal rights activists who prefer animal rights over everything else, a commendable job, if it doesn’t cross the borders of rationality and on the others, who are directly impacted because of that. Before jumping into the topic, there is this news of some villagers killing dogs in Kerala and it created a huge ruckus. The issue has become some dangerous there that there is no way forward except to sterilize or slaughter. With no resources to sterilize, what other option have the people got? With dogs hunting in packs everywhere and with them attacking the weak and infirm, can anyone even think of morality? What takes a precedene there - animal rights or human comfort? Well, I have a better option - we can catch all these strays and dump them in the areas where these animal rights activists live. Are they OK with that? Or, is it that personal comfort precedes someone else’s discomfort?
Well, then, about Jallikattu. It is a traditional Tamil sport where a person tames a bull. These animal rights activists have approached the Supreme Court and got it banned. And a Court doesn’t have any eyes and ears, it has only facts. Fine with that, going by the fact that you are hurting bulls both physicaly and mentally, you can ban it. PETA said,

Terrifying and injuring bulls is abuse, not sport, and this combined with the injuries and deaths of people common at Jallikattu events puts a bloody stain on India's reputation in the eyes of the world.

But, then, slaughtering them for food, is it fine? Kamal Haasan questioned the same today.

If you want a ban on jallikattu, let’s also ban biryani

That, even, is not my argument. My problem is about what a farmer told.

Jallikattu inspired people to hold onto their bulls. Farmers provided extra care for the animal since the bull represents the pride of their family and community. If the ban continues there will be no incentive to hold on to the bulls

This is where my problem is. No one in the area where Jallikattu is practised uses oxen for farming. Banning Jallikattu will remove the only reason why people are not sending calves to slaughterhouses - they have got a reason to incur this expense with zero returns. Well, if milk is the only reason why the oxen should survive, you can always use artificial insemenation and for that, you don’t need that many oxen. And with that, we will be seeing magnification of genetic faults resulting in new health complications. That is what my problem is, with this decision - ban it in the name of animal rights, fine. But, will you help support the survival of the breed? Or is it my problem to help ensure the breed’s survival?

Monday, 2 January 2017

The Salaried TDS Class - The Milking Cow of India

Lets face the truth. No individual in India pays income tax except that micro minority who are salaried employees and who pay taxes through TDS. Statistics show that for the year 2014-15, the total tax assessees in India are 3.91 crore out of a population of 125 crores, making them to be around 3%. Of these, 2.97 crore earning less than 5 lakhs can be discounted as tax payers. The real tax paying salaried class is in the range 10 lakhs to 50 lakhs and that constitutes around 30 lakhs of assessees (I would rather have the range from 7 lakhs but due to numbers lacking, I will confine myself to 10 lakh). Anyone above this, they are either into business executive cadre whose salary is tagged to company performance or entrepreneurial. Anyone below that range pays not that much of tax allowing them not to feel the pinch. Now coming to that 30 lakhs who are in the no man zone. Paying about a quarter of India’s net tax collection, they are the actual milking cow of India with no voice whatsoever. No one covets them as vote banks because they are migrants and are not the vote bank. No government thinks of their welfare because they are not poor. They exist only for one purpose - pay taxes honestly so that government can spend that money on welfare elsewhere.
But, we are missing one very important thing regarding them. They are the real highly skilled workforce of India. It’s because of their services, the wheels of the economy run. Their education and social stature is sufficient enough to influence the masses around them. They are apolitical, they are patient and they think of the society more than others because a considerable part of them came from the lower echelons into that category. A housemaid believes her employer more than Modi. Take one simple example - the application BHIM. Modi is campaigning for it. But, whom will people listen to and trust? It’s, ironically, these 30 lakh people only. If they like that application, others will follow suit - may be we don’t know what’s good in it; because he liked it, it should be good. It is that class of people who subconsciously teach discipline to the society. Masses follow them and try to emulate their habits. Anyone above them fit into the mould but they are more insulated from the society.
They are the ones who make educated comments in online forums and help mould mass opinions. And note, Kejriwal comes from the same class and he is but an example of how dangerous this class can be and how tough it is to cow this class. And by virtue of being the capable of migrating out of the country, rubbing them the wrong way can lead to severe brain drain, potentially irreplaceable.
Forget about the chest thumping, what are they getting in return from the government? A big zero except occasional tax slab changes. 30 lakhs is not such a big number to provide some special incentive. May be, quotas in schools? May be, exemption from some sort of taxes and cesses? May be, rebate on loans? May be free entry into some locations like ASI monuments? Recognise them and motivate them, they can do wonders for the country.

Thursday, 22 December 2016

SARFAESI Act - Totentanz for Article 370

Supreme Court recently gave a judgement over applicability of SARFAESI Act in Jammu and Kashmir and Hurriyat is planning to start a protest over this. Well, may be, it won’t because of the double whammy of demonetisation and support of lawyers who will be staring at contempt of court. Let’s see how the things play out.
As to the issue in hand, SARFAESI act, passed in 2002 gives the banks right to seize the property of a loan defaulter and dispose it off in manner it feels fit through a dedicated tribunal. The background of the noise created is this - SBI moved to seize the property of a few defaulters in Jammu and they moved to the High Court stating that, SBI, being originated outside J&K, doesn’t have any right to hold property in J&K and that the notice issued should be trashed. Basically, what they said was, I will take a loan against a surety, I won’t pay the loans and I won’t let you have my property. In such a case, why would any bank be interested in giving loans in J&K? J&K High Court upheld the petitioner’s view that SBI can’t own any land in J&K and hence, can’t seize the land. It also said, the bank can approach to the problem using existing laws. 
SBI, naturally, went to Supreme Court. Well, Supreme Court royally trashed the High Court judgement. Some of them may be sourced from older judgements, but below is the main crux of what Supreme Court said - 
  1. J&K is an inalienable part of India and J&K Constitution is subordinate to Indian Constitution, not equal. J&K doesn’t have any sovereignty whatsoever.
  2. Any laws passed by Centre, if it clash with state government laws, the state government law will have to give way
  3. Anything which is not in the state list of J&K in Article 370 becomes the property of Central Government. Traditional view held is that anything which is in Centre’s list will become the property of state and that anything passed by Indian Parliament will have to be ratified by J&K Assembly.
Obviously, this will rankle Kashmiri separatists. It looks like, to mollify them, J&K government came up with a proposal to create an entity which handles loan defaults which will contain J&K Bank as the major shareholder. This makes the entity a J&K based one and it can seize the property in place of non J&K banks. How much support will centre give to such an entity, I seriously don’t know.
Now, look at the scenario. There is a defaulter and the bank seizes his property. As far as I understand, according to the act, it should be sold only to a person in J&K. This raises two questions -
  1. If there is no buyer ready to buy, what will the bank do? Can it say, since no person in J&K is ready to buy, I will sell it to an outsider? May be, the act, now, says the buyer should be a J&K resident only. What will stop the Parliament to modify it to open the property to the whole country?
  2. After all, a bank like SBI is a wing of Central Government. Can the bank transfer property to Central Government? Now, what happens if Central Government maintains a huge list of properties in J&K, mainly in the Valley and pump in Kashmiri Pundits which these separatists opposed tooth and nail?
Can these separatists accept either of these? Another interesting side effect of this judgement is that property ownership in J&K is cut down by loan defaults. Similar unrelated laws can be used by the central government to make Article 370 completely meaningless. May be, that’s from the geopolitical aspect, but the ground reality is that with banks having an option to address loan defaults, the incidence of loans in J&K will increase, and along with it, entrepreneurship and job creation potential.

Friday, 16 December 2016

Bidi-Cigarette Divide as an Economic Indicator

I was going through an old article in Hindu over the statistics of liquor consumption and smoking in India. The data can be used directly to gauge the economic standing of every state in the country. I won't give much weight to liquor because toddy and mahua are not just a mode of inebriation, but are cultural aspects in areas like Telangana, Orissa or Chattisgarh. However, this data points to one aspect - more rural life and non availability of change. Looking at the comparision between bidis and cigarettes, this is more pronounced. Unlike liquor which is more to do with cultural background, this is an indication of poverty, backwardness and availability. As like always, we see that BIMARU states lead the bidi smoking India. If this is the real scenario, massive investment in correction of the way of life in those states is the only way of forward to take India forward.

Consumption per capita per week   Toddy &
Country Lqr (ml)
  Beer, Foreign Lqr &
Wine (ml)
  %Quality Liquor   Bidi (Nos)   Cigarette (Nos)   %Cigarette
Gujarat   53   3   5.36%   24.1   0.2   0.82%
Rajasthan   80   43   34.96%   49.8   0.7   1.39%
Uttar Pradesh   34   5   12.82%   26.1   0.4   1.51%
Haryana   89   43   32.58%   40.4   0.8   1.94%
Dadra & Nagar Haveli   2,533   498   16.43%   29.5   0.6   1.99%
Madhya Pradesh   133   12   8.28%   31.8   0.7   2.15%
Chhattisgarh   120   27   18.37%   9.6   0.3   3.03%
Uttarakahnd   38   43   53.09%   40.6   1.4   3.33%
Punjab   141   50   26.18%   14.5   0.5   3.33%
Tripura   163   2   1.21%   80.8   2.9   3.46%
Chandigarh   37   42   53.16%   22.5   0.9   3.85%
Himachal Pradesh   149   73   32.88%   42.9   2.3   5.09%
Daman & Diu   252   1,079   81.07%   4.3   0.3   6.52%
West Bengal   74   12   13.95%   41.4   3.2   7.17%
Odisha   146   20   12.05%   6   0.5   7.69%
Karnakata   23   102   81.60%   21.1   2   8.66%
Bihar   266   17   6.01%   2.6   0.3   10.34%
Assam   304   19   5.88%   11.8   1.6   11.94%
Delhi   55   86   60.99%   11.9   1.7   12.50%
Maharashtra   65   19   22.62%   4.7   0.7   12.96%
Tamil Nadu   20   85   80.95%   12.3   2   13.99%
Andhra Pradesh   561   104   15.64%   16.5   4.4   21.05%
Andaman & Nicobar Island   656   532   44.78%   12.1   3.3   21.43%
Meghalaya   74   49   39.84%   28   8.2   22.65%
Jammu & Kashmir   32   7   17.95%   14.3   4.7   24.74%
Nagaland   159   23   12.64%   12.7   4.2   24.85%
Arunachal Pradesh   749   346   31.60%   6   2   25.00%
Manipur   155   6   3.73%   10.5   3.8   26.57%
Sikkim   41   307   88.22%   5.3   2.3   30.26%
Jharkhand   320   14   4.19%   1.2   0.6   33.33%
Puducherry   154   144   48.32%   5.1   3   37.04%
Kerala   94   102   52.04%   8.9   6.4   41.83%
Lakshadweep   0   0   0.00%   9.9   8.3   45.60%
Goa   47   108   69.68%   1.4   1.9   57.58%
Mizoram   29   2   6.45%   9.8   28.8   74.61%

Sunday, 20 November 2016

Demonetisation - Everything good, but what can be better?

Did the demonatisation gamble work? As what Arun Jaitley put, When currency replacement takes place, initial inconvenience takes place, but there is not a single major incident in the country, there are no riots in India which in itself is a proof of success of the execution. Did it achieve it's goals? May be. There are a thousand good things which can be said because of this - normalcy in Kashmir, lesser incidence of robberies, cash surplus with banks and projected lower interested rates. There were some pain areas like the stock market, market areas and real estate, but we will have to wait and watch to understand what's happening in those areas.
India is too huge a country to handle. Probably, never before in world history, people more than 100 million queued for anything which is not an election. This is a sort of scenario, which no amount of planning would have made it watertight in execution. The only thing is a decent execution plan and a steeper learning curve. But, is the curve steep enough? It's but a matter of conjecture. A few points below, would have made the life easier for the government and the people and have made the transition smoother. How many of them are practical and how many or not, how many I missed, it's for the more competent to decide.
1. The difference between 100 and 2000 is very huge. Making a transaction of say, 800 rupees is a very tough task for both the seller and the buyer. 500 should have been introduced before 2000 rupee note. Or is it that 500 is stopped to avoid any leakage of information?
2. The government should have thought about cross bank deposits. Had this been effected somehow, the lines would have been cut down drastically.
3. Instead of taking a paper form and updating the currency note numbers on that, every bank/post office should have been provided a portal to enter the details regarding the transactions. This will help reduce conversion multiple times and FICNs.
4. The government itself should have created an app showing the real time cash status of every ATM. This shouldn't have been a crowdsourced, private initiative.
5. Instant account openings and deposit should have been thought about. After all, what is needed is an Aadhar linked fingerprint scanner.
6. Cooperative Bank issue was unwarranted. When all the banks were closed on 8th, a sweep should have been initiated all over the country to collect all 500 and 1000 rupee notes stashed with the banks, counted and shredded at a consolidation point, may be in every district. When you force everyone to start with a clean slate, past dated transactions wouldn't have happened and we would have seen much more points for exchange.
7. Instead of forcing the hoarders to destroy their currency, a provision for anonymous donation to a select welfare funds like PM Relief Fund should have been provided. That will force governments to jack up the reserves without they being used anywhere.
8. Recaliberating the machines should have been done at a faster pace. Or rather, a plan for construction of new machines should have been initiated as a part of the same program since most of the ATM machines we have today needs to be replaced in the near future.
9. Is it worth investing effort to take down those who still hold paper currency in old notes? After all, it is going to be a scrap of paper if not deposited.