Resolving global imbalances aka currency manipulation

Some time in the future

The Obama administration is increasingly signalling that the US will not continue to be the world’s consumer and importer of last resort. The clearest statements came last month from Larry Summers, White House economics director, in a speech at the Peterson Institute for International Economics and in an interview with the Financial Times. The US, he said, must become an export-oriented rather than a consumption-based economy and must rely on real engineering rather than financial wizardry.

This long-run vision for US growth entails greater exports and probably a smaller current account deficit than where it is now (about 3 per cent of gross domestic product). Although Mr Summers did not and could not say so, the vision will require an end to the remaining overvaluation of the dollar.

Put starkly, Mr Summers has stated that China can no longer behave like China because the US intends to behave much more like China. The world economy cannot have two, or even one-and-a-half, Chinese growth strategies from its two most important economies. Which will prevail? (via Fred Bergsten & Arvind Subramanian: Resolving global imbalances).

In the last 50 years, the US dollar has swung from being grossly overvalued to slightly overvalued. The inertia of the Bretton Woods system has kept this overvaluation going. How has this benefitted the US?

It has allowed the US to use its overvalued (and over-printed) currency to buy vast tracts of the world economy. And now having captured these segments of the world economy (especially raw material sources), with an over-valued currency, it will achieve two objectives.

The US is in no position to pay off its nearly US$4 trillion, it owes the Rest of the World – equal to about 1 years GDP (my estimate, in PPP terms). This kind of dollar devaluation does three things at one stroke.

Kojak Haircut Series – A Greenspan-Bernanke Production

One – It reduces the real value of its debt. The Chinese, the Rest of BRICS and the Others need to be paid a lot less in the future. (as pointed out earlier in various posts linked here.) Two – It makes US exports artificially competitive. (as pointed out earlier in linked posts). Three – The US competitiveness will be anchored to assets purchased with over-valued dollars.

Readers can take courage from the fact that each such ‘process’ gives the US lesser returns and fewer options. The Law of Diminishing Marginal Utility. Or in plain language ‘crying wolf’ often never paid off.

But the smart answer is to go out and buy one kilogram of gold. If each reader of Quicktake and 2ndlook blogs were to do this, the world would become a safer and fairer world in the next 10-20 years.

Swear!

ILO and Indian Government partner to train domestics

The first requisite of a good servant is that he should conspicuously know his place. It is not enough that he knows how to effect certain desired mechanical results; he must, above all, know how to effect these results in due form. Thus wrote the legendary academic Thorstein Veblen in The Theory of the Leisure Class, that superb treatise on the effect of wealth on behaviour. “Any departure from these canons of form is to be deprecated, not so much because it evinces a shortcoming in mechanical efficiency, or even that it shows an absence of the servile attitude and temperament, but because in the last analysis it shows the absence of special training.”

… a couple of weeks ago it appeared Delhi had taken Veblen seriously. To ensure that such a lacuna should not reflect on its image as the capital of an economic superpower in the making, it launched the programme for skill development of domestic workers, a programme to turn out trained housemaids for the rich and the burgeoning middle class. And in this endeavour, it had impressive sponsors: the International Labour Organisation (ILO) no less, the Union Ministry of Labour and Employment and the Delhi government, all under the umbrella of the high-sounding National Skill Development Programme. (via Latha Jishnu: The commons and the classes).

This may yet come to pass!

The next great ‘revolution’ in Indian economy after the BPO revolution is being scripted by the ILO and the Government of Delhi under their Chief Minister, Sheila Dikshit. They are going to train domestics and ‘upgrade their skills. With this ‘revolution’ India’ can become the global source for ‘true’ coolie labour – a source for domestic for any country in the world.

Apparently, colonialism never died. We now just have Brown masters instead of White masters! What a waste!

Of course, like Latha Jishnu (the author) of the article points out, no one is really interested in ensuring that all Indians go to equally good and high quality schools. Because then where will and “how would one get the endless flow of domestic helpers”.

In search of post-racial fiction

Elephants in the room!

The Help has its heart in the right place, and its “White” imagining of the Black women’s voice springs from an authenticity which only a personal experience could have supplied. In a moving afterword, Stockett reveals how she never understood the silent suffering of her own Black maid until long after her death which happened when Stockett was 16.

However, the book must be accused of borrowed characterisation. Consider Aibileen who matches every stereotype one may harbour about Black people, not seeing the irony of her observation when she meets one of the White kids, now grown up, she tended to:

“And how I told him don’t drink coffee or he gone turn colored. He say he still ain’t drunk a cup of coffee and he twenty-one years old. It’s always nice seeing the kids grown up fine.”

This description, and many such, made me uncomfortable, because they play into the mythologised image of the long-suffering Black — the gentle sacrifice, the immense capacity for self-denial. Why are Blacks, unless they drive the plot, so devoid of ill will in novels about racism? How does Aibileen stand being good to the children she raises, knowing fully well that they will grow up to become dyed-in-the-wool racists? (via In search of post-racial fiction).

This observation I like. Elephants in the room! Very similar to the myth of the ‘non-violent struggle for Indian independence.’ I wonder how much this works.

When tribal women came out and take on the might of the Indian State, one thing you can be sure of! India(ns) does not believe in non-violence – at any cost. There is point beyond which, Indians will not look at the cost and price – but only the value.

Lalgarh proved that!

Tirupati: Pujary steals deity’s gold to marry kids – The Times of India

Chief priest Kattu Venkata Ramana Dikshitulu of Lord Sri Kodanda Ramaswamy temple in Tirupati admitted to the crime after TTD officials grilled him on finding the two necklaces — a ‘Lakshmi haram’ (490 grams) and another weighing 540 grams — missing during an inventory.

“I know I have committed a crime. I have three daughters and poverty forced me to do this,” he said. The priest had pledged it with a pawnbroker and borrowed Rs 9 lakh a decade ago. The pawnbroker (Kamadhenu & Co.) are also being quizzed by the cops. (via Tirupati: Pujary steals deity’s gold to marry kids – Hyderabad – City – NEWS – The Times of India).

TTD is now run by the Government of Andhra Pradesh. I have no clue, and never been able to understand what the Government is doing at the TTD! Since, when is this a matter for the Government to manage! And just why is a ‘secular’ Government of the Republic of India running, managing, controlling religious institutions!

They have no role to play in the private and religious lives of Indians! End result – reduce temple priests to such a situation! Abominable!

Get out and get going, GoAP!

New Evidence for Silk in the Indus Valley

Indian silk industry was not a case of ‘industrial espionage’ from China – as alleged. It was homegrown!

New Evidence for Silk in the Indus Valley

Archaeometry (reprint) 2009

Silk is an important economic fiber, and is generally considered to have been the exclusive cultural heritage of China. Silk weaving is evident from the Shang period c. 1600-1045 BC, though the earliest evidence for silk textiles in ancient China dates to a millennium earlier. Recent microscopic analysis of archaeological thread fragments found inside copper and steatite beads from two important Indus sites, Harappa and Chanhu-daro, have yielded silk fibers, dating to c. 2450-2000 BC. This study offers the earliest evidence in the world for any silk outside China, and is roughly contemporaneous with the earliest Chinese evidence for silk. This important new finding brings into question the traditional historical notion of sericulture as being an exclusively Chinese invention. (via Irene Good | Papers | New Evidence for Silk in the Indus Valley – Academia.edu; with a thanks to ‘galeo rhinus’ for this pointer).

Indian silk

India has two indigenous silk worms – one in the North East, which produces the Tussar silk. And the other is the one found at the Deccan plateau – which produces the Mysore silk. Both these are different from the Chinese silk-worm.

It has long been believed by Western historians (and their Indian chelas), that nothing good could have come out from India – except the zero!

To anyone, who has dealt and understands Indian silk would have realized that Indian silk industry was not a case of ‘industrial espionage’ from China – as alleged. It was homegrown.

This recent find proves just that.

Coming next …

And there is more, where this came from! Indus Valley happens to be oldest, abandoned site that the West has discovered. What about living cities – where people have lived for more than 5000 years. Western diffidence about Indian history is well grounded. It has the ability to blow apart all their constructs.

And that can be a cause for real worry!

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Targetting Yeddyurappa

At least the Times of India is targetting Yeddyurappa

Addressing a press conference after a day-long meeting of the chief ministers convened by the government, Home Minister P Chidambaram said the central government is considering establishment of regional intelligence centres (RICs) to train personnel in intelligence gathering and analysis in view of the grossly inadequate training facilities at present.

He said the states also proposed central procurement of weapons, continuation of the modernisation of police forces (MPF) scheme and a more effective instrument to expedite the road building programme in border as well as Naxal affected areas.

Noting there were 230,000 job vacancies in the constabulary when the last meeting of the CMs was held in January, Chidambaram said the situation had improved and now the number had dropped by almost two-thirds to 150,000. Efforts were also under way to recruit some 84,000 personnel, he added. (via The Tribune, Chandigarh, India – Nation).

Targetting Yeddyurappa?

While the nation is worried

So, while the nation’s chief ministers were in conference on the terrorism issue, the media was fed with such photographs. On two consecutive days, the Times Of India carried these two photographs. These photographs are no accident.

I am sure all Chief Ministers must have had their forty winks. As anyone can imagine, in public life, sleep is a luxury.  ‘Someone’ had to instruct the photographer(s) to target Yeddyurappa – and ‘catch’ him, when he is catching his forty winks.

The media is playing games

The media, (at least some sections) are targetting the ‘new star’ in the BJP firmament. After all who would have imagined even two years ago, that BJP will single-handedly capture a Southern state. And I am sure the BJP national leaders had little role to play in the BJP win in Karnataka. These attempts to ‘take down’ a new ‘star’ in the BJP firmament, points to media’s complicity in these political games.

Shame on you Times of India.

‘We needed to make a demon of Jinnah… Let’s learn from our mistakes’

Could Advani have made such a misstep ...!

How seriously has India misunderstood Jinnah?

I think we misunderstood because we needed to create a demon.

We needed a demon because in the 20th century, the most telling event in the entire subcontinent was the partition of the country.

Your book reveals how people like Gandhi, Rajagopalachari and Azad could understand the Jinnah or the Muslim fear of Congress majoritarianism but Nehru simply couldn’t understand. Was Nehru insensitive to this?

No, he wasn’t. Jawaharlal Nehru was a deeply sensitive man.

But why couldn’t he understand?

He was deeply influenced by Western and European socialist thought of those days. Nehru believed in a highly centralised polity. That’s what he wanted India to be. Jinnah wanted a federal polity.

Because that would give Muslims the space?

That even Gandhi understood.

You conclude that if Congress could have accepted a decentralised federal India, then a united India, as you put it, “was clearly ours to attain”. Do you see Nehru at least as responsible for partition as Jinnah?

He says it himself. He recognised it and his correspondence, for example with the late Nawab Sahab of Bhopal, his official biographer and others. His letters to the late Nawab Sahab of Bhopal are very moving.

(via ‘We needed to make a demon of Jinnah… Let’s learn from our mistakes’).

A ‘victorious’ Congress, ruling for most of the 60 years of post-colonial India, had three clear propaganda imperatives.

The Masters Glee - Confusion of Indian Independence

1 – TINA, There is no alternative

They needed to prove that it was only the Congress which could ‘take on’ and  ‘defeat’ the ‘glorious and the mighty’ British Empire on which the sun never set. The logic went, “what could India(ns) have done without the Congress”. This thinking went deeper and dirtier, when a certain Deb Kant Barooah, declared “India is Indira and Indira is India.”

Similarly, Congress decided to re-write history and take all credit for the departure of the British colonialists. Contributions of leaders like SC Bose was ignored or the importance of the February 1946 joint action by the Indian Armed Forces against the colonial forces, was minimized to the ‘Naval Ratings Mutiny.’ Leaders like VD Savarkar (the first to write a non-colonial history of the War of 1857), or Shyama Prasad Mukherjee (the founder of the Jana Sangh-BJP) was dismissed as fascism.

Fact is, that Britain was bankrupt and could not hold onto India. Fact is, that for a 150 years – from 1797-1947, many rebellions, wars, individual hits were made against the colonial British Government. The myth of non-violent Indian freedom movement, served both colonial and Congress interests. It showed the British as ‘civilized’ colonialists – and the Congress as ‘enlightened’ leadership. Just like most Western literature caricatures African-American characters as hard-working, humble, docile, placid, obedient, gentle!

2 – If you don’t have an enemy, create one!

The Congress needed to create an enemy. A demon, who they could blame, use, abuse – and Pakistan fitted the bill perfectly. A failed state (!), a hotbed of terrorism – and to top it all, an Islamic State. What more could the West-Congress combine ask for?

Easily slipping into colonial legacy of ‘divide et impera’, the Congress went onto a disastrous foreign policy trail of Hindi-Chini bhai bhai. A solid realtionship with Pakistan would have,  arguably, saved Tibet from the Chinese maws – which Nehru’s foreign policy predicated.

Basking in the 'glory' of Western approval

3 – Craven desires

To gain Western approval, acceptance, favours, privileges et al.

Consider the English language policy of the post-colonial Congress Government. It has massively subsidized English education in India so that the children of the elite could ‘escape’ to the West. The demeaning ‘population control theory’, the English language education – all, a result of this need of the Congress Party.

The deliberate colonial distortion of Indian history continues unchecked and unhindered. You only have to read Congress Prime Minister, Manmohan Singh’s speech at Oxford, praising the Raj,  while receiving his honorary doctrate, or Chidambaram’s decision to end “abject poverty” in India that he seems to “have known for 5,000 years.”

Coming to the BJP

When Advani goes to Pakistan and praises Jinnah, it cannot be an accident, or a slip of the tongue. It had to be a deeply thought out, well considered move – one can say, after watching Advani for nearly 30 years now. The man does not go out and missteps so wrongly. The ‘Advani-Jinnah-comments-fracas’ was for media consumption – and BJP party workers. If Advani wanted to re-write history (about time too), that was one way!

And if there were any doubts, then Jaswant Singh’s book, seals the argument.

PS –

1. Dutifully, within 48 hours, the BJP decided to ‘expel’ Jaswant Singh from the party, for his pro-Jinnah book on 19th August, 2009.
2. Gujarat Chief Minister, Narendra Modi, promptly banned the book, in Gujarat. I see good sales for Jaswant’s book – and rehabilitation of Jinnah in India, BJP willing.
3. On 23rd August Arun Shourie, ‘tore’ into the BJP leadership on the subject of Jaswant’s Singh’s book. India Today reported that he said, “Jaswant Singh’s book is a scholarly work. It deserves to be read,”, criticising the party for pulling the Jinnah remark out of context of the entire book.
4. One day later, on 24th August,  KS Sudarshan, the former head of RSS weighed in on Jaswant Singh’s side. It was reported that

“Jinnah had many facets. If you read history then you will come to know that Jinnah was with Lok Manya Tilak and was totally dedicated to the nation. And when Gandhi started the Khilafat movement, with the idea that currently we are opposing the British and if Muslims join in then their support will help gain independence. But at that time Jinnah opposed it saying that if the Caliph in Turkey has been dethroned, what has India got to do with it. That time nobody listened to him, which saddened him. So he quit the Congress and left for England and only returned in 1927,” Sudarshan said.

5. On August 26th, 2009, newspapers reported that in response to BJP’s Jinnah-offensive the “Cong threatens protests against attack on Nehru”. Additional reports, stated that the “Cong(ress) plans defend-Nehru movement”. Manish Tiwari, the Congress spokesman rationalized that, “approval of Jinnah could easily come from the BJP-RSS leadership because “they had no role in the freedom struggle”.
6. On 30th August, 2009, a former general secretary and vice-president, Pyarelal Khandelwal, wrote a letter suggesting that

“Jaswant Singh’s expulsion should be taken back and the matter should be discussed with him in a respectable manner to resolve the problem,” the letter states. “The case gives the impression that while acting against the senior leader some party leaders had a well-planned intent to corner him and they showed too much haste,” Khandelwal says in the letter. It would have been proper and in keeping with the party’s image if the controversial portions of the book had been seriously discussed before taking action, as was done “in the case of Arun Shourie where a lot of patience was exercised”. Khandelwal also suggests that had Jaswant Singh himself kept the party view in mind and sent in writing details of the book before its release or discussed the issue with the appropriate people in the party, this situation could have been avoided. “The discipline of the party could also have been kept intact,” Khandelwal said.

7. On 5th September, that “though BJP has expelled Jaswant Singh from the party, its parent organisation, Rashtriya Swayamsevak Sangh (RSS), has invited his son Manvendra Singh to its national meeting in Mumbai.”

On Independence Day, ‘harassed husbands’ to demand ‘freedom’

A ‘progressive’ and ‘free’ India has decided that men are evil – especially husbands. Discriminatory laws lay the burden of proof on husbands and their families, including women, on the basis of a wife’s complaint..

Times of India was not far behind

All the four groups are working for equal rights for men and women in India. We feel that in many instances, the Indian law is biased when it comes to husbands, as it often favours the wives. Be it in the case of custody of children for divorced couples or false allegations of domestic violence and dowry harassment, the law generally takes the side of women, without listening to the side of men,” said Kumar.

“However, we would like to clarify one thing. We’re no women haters. This is about equal rights of both men and women,” said Kumar Jahgirdar, founder of CRISP.

In order to prove that harassment of husbands was prevalent, Kumar cited the latest report of SIFF on suicide rate of men across India.

“Around 1.2 lakh (120,000) harassed husbands in India have committed suicide in last four years,” SIFF’s president claimed. (via On Independence Day, ‘harassed husbands’ to demand ‘freedom’).

Can a judicial gavel breaking down shackles | Image source & courtesy – znn.india.com dated August 16, 2009

A ‘progressive’ and ‘free’ India has decided that men are evil – especially husbands. It has enacted discriminatory laws, which lay the burden of proof on husbands and their families, including women, on the basis of a wife’s complaint.

Considering the disproportionate amount of NGO activism on this law, it raises questions about the motives and funding of these NGOs. In case you have not already guessed, the biggest source of funding for these NGOs is the West.

Mid-day’s fatuous coverage

The Odious Section 498

Possibly the best ‘example’ of post-colonial legal thinking is the Section 498. A retributive, revengeful law (patterned on Western legal models) is now undermining the very structure of Indian society – marriage. Section 498 has has taken away marriages from the social domain into the legal sphere.

From being contributory, accommodating, religious and life long, Indian marriage system is becoming extractive, adversarial, contractual, legal and short term. Some in the West do see the value in the Indian system – but India seems to think that West is a way out!

Another Mid-Day attempt

On September 5th, 2008, the Times Of India reported that the Indian Government may review the section 498 law. The report talked about how

“For long, voices raised against the anti-dowry act were dismissed as those belonging to men desperately trying to retain their dominance over women. But now, an increasing number of women complaining against misuse of the act has forced the women and child development (WCD) ministry to initiate a review of the controversial legislation.

The government’s turnaround comes after an increasing number of complaints came from women themselves — mothers-in-law and sisters-in-law who ironically have fallen victim to the misuse of the two laws.

The statistics are telling. Raksha, an NGO working on marital harmony and child welfare, has analysed figures by the National Crime Records Bureau to deduce that 1.2 lakh women have been falsely implicated under 498A.

‘‘Every 21 minutes, an innocent woman is being arrested. While the number of arrests under 498A are increasing every year, what is not being considered is that the conviction rate in these cases is barely 2%,’’ Anupama Singh, Raksha spokesperson said.

Another ‘cartoon’ from Mid-Day

Media and academia

The media looks at these ‘battered’ husbands in a amused manner – as the recent media coverage of the Shimla conclave demonstrated. The only newspaper which toned this matter objectively was the Deccan Herald of Bangalore. Most newspapers had amateur cartoonists trying to raise a laugh – some of which are linked to this post.

Of course the English language media raises no questions about the agenda of these NGOs, the sources and their activities.

Makes one think!

Related Articles

• Gender justice, interrupted (thehindu.com)
• Viral: Why it is hard to date women in India (ibnlive.in.com)
• India Ink: Where is India’s Feminist Movement Headed? (india.blogs.nytimes.com)
• Former Odisha minister Raghunath Mohanty’s son arrested for dowry harassment (ndtv.com)

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‘IT players failed us in financial inclusion drive’- says the RBI

The rich target the poor ...

The Reserve Bank of India (RBI) has accused IT giants of being indifferent towards the cause of financial inclusion in India. “The scale of business in financial inclusion is so big that we need participation from big IT companies,” said KC Chakrabarty, deputy governor, RBI, speaking on the sidelines of a financial inclusion seminar organised by Skoch, a consultancy firm. He added lack of interest and involvement by big IT companies was making banks’ endeavour of financial inclusion unsuccessful.

According to Mr Chakrabarty, involvement of big IT companies was important to bring down the transaction cost. (via ‘IT players failed us in financial inclusion drive’ – The Economic Times).

How India missed out …

Due to our well-cultivated tunnel vision about English language (amongst many other things), India missed out on Japanese investments, technology and business. Indian loyalty to English language exceeds the loyalty of the British themselves to their language – and we refuse to see how this affects us.

Reforming Indian education

India urgently needs to put more languages in lingual-education basket – instead of putting all our eggs in the English language basket. We can’t do business with the French or Germans, Spanish or the Arabic speaking world. The Chinese and Japanese are out of bounds to us – as are the Swahili and the Bantu.

The Indian language basket also calls for diversification. India needs to learn more foreign languages. But with our bankruptcy of ideas on restructuring Indian education system or the vested interest banging begging bowls in front of the Indian tax payer!

The Indian software ‘success’

The great ‘software’ success story is actually two countries – US and UK who give between 70%-80% of Indian software business! This is coolie labour! We are missing out on the massive Japanese, French and the Spanish markets because we have not invested in those foreign languages. Same story in Europe also – major opportunities overlooked and ignored. And we have missed out on computing in Indian languages, because we have not invested there either. So, RBI’s peeve is right – but the solution is somewhere else.

Is it due to the apparent Indian decision to tie its future to the sinking ship of the Anglo Saxon Bloc?

Is India becoming an oligarchy

How Big Business and Big Government combine against the aam aadmi, the common man.

Organized crime

analysing a set of figures: the number of billionaires per trillion dollars of GDP for the major countries of the world. Heading the list is Russia with 87 billionaires for its $1.3 trillion of GDP. Coming second is India which has 55 billionaires for the $1.1 trillion of GDP that it generates. Why should this be worrying at all? After all, we did have a booming economy in the last few years. But some perspective would help to see this in the global context. Brazil, which is often cited as an example of very high income inequality, has only 18 billionaires despite a greater GDP than India, while Germany, boasting three times India’s GDP and a per capita income that is 40 times India’s, has just about the same number of billionaires.

For Rajan, who headed a committee on financial sector reforms in India, the numbers are alarming: “Too many people have gotten too rich based on their proximity to the government. If Russia is an oligarchy, how long can we resist calling India one?” It is his contention that reforms have created new sources of rents for the establishment, specially from the allocation of scarce national resources. This means that barring a few exceptions most of India’s billionaires have been created through sweet deals in land, mining, coal, oil and gas. (via Latha Jishnu: It’s a stink and a powerful one).

With concentration in power comes lack of responsiveness! | Image Source & courtesy – Times Of India, cartoon by Ajit Ninan on 27 Dec 2009 | Click for image.

Concentration Of Power

How does one measure concentration of power.

Today the most popular method is the Fortune /Forbes /Businessweek  /FT 500 listing of Top corporates. These listings demonstrate that half the world’s economic output is controlled by about 25,000 individuals. Add another 25,000 politicians and bureaucrats. We have about 50,000 people managing the lives of 5 billion people.

Read this with the faceless corporate entity aspect, hiding behind legal facades, banks of call centers and telephone operators, off-shore locations – and the opacity becomes more worrisome.

What is happening in India

Out of the 30 current Sensex stocks, which make up the Indian Benchmark Index, 15 started off as SME (small and medium enterprises) 25-50 years ago. These organizations today are lobbying (successfully) to ensure that other SMEs do not challenge and compete with these large corporations. Indian policy makers, apparently, cannot learn from successes.

Democracy is a tool that finally lays blame for the crimes of the polity at the feet of the victim | Ajit Ninan cartoon | 2009 Apr 28 The Times Of India Bangalore | Click for image.

And what you think is a right move …

On the other hand, limited liability companies have created a huge debt mountains. What about expanding liability, instead of limited liability. While LLCs can have limited outward liability, they can create unlimited inward liabilities – in the way of debt, bonds, debentures, notes, paper, et al.

These two elements, limited liability and a separate legal entity, have made these Frankensteins different from any previous association of businessmen. The legal structure of corporations allow actual owners to hide behind a legal façade, without liability. These corporations have access to large amounts of fiat currency. Old debts are repaid by taking new debts. Competition is killed by raising entry barriers – which is again done by accessing huge amounts of debt. Some of this borrowings are irredeemable – and called equity.

Limited liability of the shareholders has meant that various stakeholders usually have little or no recourse – when things don’t pan out. Some stakeholders (usually shareholders and management) have access only to an upside, other stake holders, actually, finally take the risk. Such companies resist any attempt at accountability.

It is this ability to evade ethical practices and issues that differentiates these corporations from other business enterprises. From the massacre of millions of Indians during the 1857 War (by the East India Company), the many regime changes that corporations have pushed, the record of these organizations has been far from average.

A collusive polity, allied with State-funded media and academia, combine against the common man, the aam aadmi. | Cartoon by Ajit Ninan; source – Times of India; on 10 Apr 2009 | Click for image.

You surely know this …

A favorite scam in the Indian mobile phone industry is to activate services that the customer has NOT asked for – and start charging him for it. It then becomes the customer’s responsibility to discontinue these services. If the customer does not pay the bill, his name gets reported to CIBIL, a credit bureau – which will make it difficult for the customer to access other credit services in future.

If he pays the bill , the telecom has succeeded in the scam. The effort required to discontinue these services, in many cases, is seemingly higher than the charge for these services – about Rs.20-30. (40-50 cents per month). The scam becomes outrageous when you multiply this amount with the number of subscribers – at last count nearly 40 crores (400 million).

Stop this swill

The Mobile Recharge Scam

The same scam makes an appearance in mobile recharges. In most circles, especially Mumbai, customers have no way of knowing how and where their money has gone. Hiding behind walls of call centres and IVR machines, telecom companies in India are working hard at keeping customers in the dark.

In the mobile recharge system, an additional victim is the retailer. 2%-4% of pre-paid recharges never reach the consumer. The retailer refunds the money to the customer. In many cases, the reimbursement from the telecom company never reaches the retailer. What is the retailer commission for these recharge services. 2.5%-4%. What are the number of recharges which don’t reach the customer – 2%-4%.

It so turns out that the retailer ends up subsidizing the mobile phone companies by providing these services to the telecom customer. A similar story is playing out in credit card businesses, banking and unsecured loans.

Big Business and Big Government

They are both on the same side. Fighting the two Goliath is equally impossible for Desi Ram or Indy Joe. The outrage against these scams is building up – and will damage the faith that the Indian has in Indian business.

A word of advice

They are working hard to lose the trust that the average Indian has for Indian corporates. Stop all these wasteful CSR swill and propaganda – and just get your members to work their businesses cleanly. That itself will be a big enough CSR for Indian industry.

I doubt if India and Indians need or expect more from businesses – BIG or small.

The largest employer in India is the SME sector

And the BJP does not talk about the SME at all. Just like the Congress is not bothered about them at all. Save the big industry. There is space for big industry and India needs big industry too. The big moneybags call the shots, in both the Congress and the BJP. So, any belief that any one is any different is all wrong. They are more or less of the same agenda.

Shallow thinking

Both have the same limitation in the thinking – set by the external agenda and vocabulary. The difference is language. Congress swears by India (a Latin name of Bharat) and BJP swears by Hindustan and Hindutva (a Levantine name for Bharat). Both miss out on the Bharati nature of people.

No talk of Third currency

Neither (the Congress or the BJP) has the imagination or the strategic depth to think out of the Western box. They are all trying out the same tired Western cliches of IMF and World Bank reform – which is going nowhere. It is the IMF and World Bank which keep the Third World poor and backward.

Sad.

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• Reports: India seizes $44m guarantee from IMI (haaretz.com)
• China: India ‘not rival’ after launch (cnn.com)
• Vodafone Threatens India With Arbitration Over Tax Issue (voanews.com)
• The feeding frenzy of kleptocracy (thehindu.com)
• India may see internet boom by 2015 – report (blogs.ft.com)

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