Tuesday, July 21, 2009

Let the brothers fight

Has there been any controversy bigger than the feud between the Ambani brothers? I doubt it and I give full marks to the brothers for their impeccable record of figuring in the newspapers for all the wrong reasons. The bone of contention now, is the pricing of gas. The 'Big' Ambani (the smaller one) as he loves to call all his brands by that name, for instance the Big entertainment, Big cinema, Big TV and so on now alleges that his real big bro is playing spoilsport in keeping his word on the gas agreement that they had signed during the peace process when their fight came out in public in 2006. He spared nobody as he went on to allege that the government is backing the big brother instead of being neutral.

The bureaucrats wasted absolutely no time in giving interviews to news channels on how the brothers should touch their mother's feet and bury the hatchet and all. But I say lets cut the crap. But whats wrong if these brothers fight? I have absolutely no problem if they do. Their fighting does more good than bad to the millions of shareholders or the aam aadmi. Confused? Let me explain.

Whenever the brothers go to court or give statements in public, the stock market reacts to each and every petty issue. For instance, On 15th June 2009, the Bombay High court ordered RIL, a company owned by the elder brother to sell natural gas to RNRL, a company owned by his younger brother for a price which was 44 percent less than that set by the government. The share market reacted similarly and the little bro's company's share price jumped 24% while big bro's company's share price fell by 8%. But after a week, everything was normal for both companies. Investors started buying both shares and they corrected. All the events in the past have followed the same trend.
The good thing is that the share prices of the companies owned by the brothers seem to correct way too fast compared to other listed companies.

We must not follow the adage- 'Don't take risks in a stock market'. What we should do is pile up shares of all the companies owned by the brothers and wait for them to quarrel. If the brothers couldn't bury the hatchet in the past four years, they never will. The animosity will not mitigate. When you are assured of controversies every year, then why not take risks to capitalize on them? Keeping in mind the average time the Indian court takes to give justice, I believe that it is a good idea to do so. So go ahead, open DEMAT accounts, buy Reliance shares, wait for a controversy and make money! With the brothers, It is that easy. Long live the brothers. Amen.

Saturday, May 23, 2009

Where did Advani lose it?

The election results are out and it is music to many ears as the congress led UPA is buckling up to form a government for the second time in a row. The prime minister has come out in public and acknowledged the hard work done by Rahul Gandhi in campaigning for the party. Many people believe that Rahul is walking in the footsteps of his father. His remark after the party's commendable performance in UP was exactly what Rajiv Gandhi had said after the historic 1984 elections. It is good to see that the congress have found a new messiah in the form of Rahul Ganhi.

This is where LK Advani's campaigning comes into picture. He kicked off his campaigning way before the Congress had and he was the undisputed Prime Ministerial candidate of the NDA. Yet, his party's performance was worse than that in 2004. The vote share has diminished dramatically. Anti incumbency, which was a trump card the BJP tried to play, failed miserably. Many political strategists drew similarities between campaigns of LK Advani and Barack Obama. While one of them pulled off a historic victory, the other was made to bite the dust. Where did Advani lose it? The answer is simple and straightforward. We Indians, are habituated to copy stuff. Be it a formal letter to somebody or a tv show that is popular in the west, we always try to copy stuff, maybe off the internet or from something existing physically. This is exactly what Mr. Advani or his "advisors" have done. They have seen that Barack Obama reached out to the people through a website of his own. Then they said to themselves, "Hey, why can't we do the same?". Soon Advani came up with a website and an advertising campaign titled "Determined leader decisive government". The problem here is that neither is Advani a determined leader nor is his government decisive. Barack Obama had associated himself with many key issues like healthcare, employment and tackling the economic recession. He also gave a gameplan of how he would tackle those issues if elected to power. Advani on the other hand had no such gameplan. The party manifesto only underlined the problems without mentioning about the solutions to them. He thought that the Indian population was stupid enough to believe in what he had to offer.

The other area where Advani failed was in personality projection. Obama was clean and was a fresh face to the American elections. Advani on the other hand was involved in the demolition of the Babri Masjid and has no ideology of his own. He is stuck between the Devil (RRS' ideology) and the deep sea (BJP). He has been in politics for so long that the people are bored of him and his speeches. What the BJP needed was a rejuvinated leader like Obama of Rahul Gandhi for that sake.

In my opinion, I think Advani should quit active poilitics and try to assume the role of a patriarch in the BJP. He should learn from Vajpayee, who gracefully exited active politics after his loss in the 2004 elections. Its time for him to pave way for the next generation leaders like Arun Jaitley to move up the heirarchy. I agree that becoming the PM was his dream. Unfortunately he couldn't cherish it. But he now has a chance, that of guiding a leader to become the PM and he will certainly derive more pleasure out of it.

Sunday, March 15, 2009

No more poor turnouts

Its election time again! But wait. Is it something to cheer about? We all spend ample amount of time in criticizing the politicians and their policies but prefer to stay at home rather than going out to vote. One question that each one of us needs to ask oneself is 'how many times have I cast a vote?' I am sure a major chunk of the people who have answered this question will figure under the head 'never'. Before this 'never' becomes 'never-ever', its time for us to act.

India proudly calls itself a nation that renders IT services to the world. However, I fail to understand why IT has not been used where it matters the most, i.e. in the day to day activities. Why don't we come up with mobile voting? I completely deny the fact that Indian people do not want to vote. They are only too lazy to do so. We have practical examples from everyday life which affirms that people do believe in voting. People vote for their favourite singer in Indian Idol through their mobiles. They also select their favourite 'dancing jodi' in Nach Baliye. They readily vote Yes/No when a news channel throws a question at them. If the people can do all this by spending Rs. 5 per SMS, won't they do the same with something as important as the General Elections? All we need is a foolproof system in which every person who registers himself for voting gets a username and a password which he/she can use to cast his vote either through his mobile or on the internet. India has in a way revolutionized the voting system by incorporating the Electronic Voting Machines (EVMs). The most developed European countries and even America have not done away with the traditional paper and stamp method. It is high time to go a step further and show the world how technology can be used for the welfare of the society.

India has one of the poorest turnouts when it comes to voting. Many of the so called "political pundits" do not cast their votes. The typical voter turnout in our country has always fluctuated in between the 55-60% range. It means that almost half of the population in our country does not vote. There is no single reason for not voting. It is ironic to note that a majority of the non-voting population is the middle-class. But lets face it, whats in it for them?

The lower strata of the society is often given money by the political parties. In some cases, the parties also arrange for their transportation. Thus they have nothing to lose in this case. They are being paid for casting votes.
The upper class of the society, like the lower strata, has nothing to lose either. When a person like Anil Ambani turns out to vote sweating in his jogging tracksuit, along with an entourage of bodyguards, hundreds of photographers snap his pictures and he wastes absolutely no time in making gestures. Therefore a person like Mr. Ambani gets a lot of publicity for casting his vote.
Both the top and bottom sections of the social pyramid are thus benefited by voting. The middle class on the other hand gets nothing out of a vote. This should be exploited. The middle class is the one which is most affected by the day to day decisions made by the government, be it a hike in the fuel and gas prices or the increase in the reservation quota in educational institutes. Unlike the upper and lower classes of the society, a person belonging to the middle class regularly pays taxes.

How can we improve the voter turnout in the traditional voting procedure? I think the Election Commission can play a big role in addressing this issue. The EC needs to come up with a business plan which would incentivize the middle class to come out and vote. An average middle class person doesn't vote because there is nothing in it for him.

If the EC comes up with a unique proposal wherein every person who turns up to vote gets a free gift, I am sure most of the middle class youth (age group 18-25 years) will turn up to vote. The free gifts may be in the form of pizza coupons, music world coupons or coupons of apparel stores. This way we can rope in the youth of this country belonging to the middle class. The EC in turn can repay the companies by providing them with advertising space at the poll booths. The coupons must have expiry dates and must be made valid only on the purchase of a minimum amount from the specif outlet.

Next we have people belonging to the age bracket of 26-60 years or the working population. These people will be unperturbed by the notion of free coupons and it would take something more than free coupons to lure them. If a provision is provided wherein every person who turns out to vote gets benefits like discounted interest rates for home or car loans from Public Sector Banks. Giving a premium rate of interest on fixed deposits in banks and post offices is another option. The benefits should be increased when a person repeatedly turns out to vote in every election that is held. Some constraints will have to be placed so as to check that the benefit is not misused by the public.

I agree that a decent amount of money has to be shelled out to incorporate the above ideas. There is nothing wrong in it though. It is taxpayers money being used for the welfare of the taxpayer himself. Isn't that the ultimate aim of any country?

Tuesday, March 10, 2009

The Kashmir problem- A layman's view

Ever since I seriously started reading the newspapers, which is about 10 years back, I've almost always noticed the word Kashmir in bold. Be it for militant attacks or for the Indo-Pak peace process, Kashmir always seems to pop up. Talks have been going on since 1997, with the Agra summit being the highlight of the peace talks. Even after a decade of talks, we still haven't arrived at a conclusion about what has to be done with Kashmir.

Though there is an outrage regarding the invasion of a part of Kashmir by Pakistan, our feelings somehow soothen when it comes to China invading Kashmir. Aksai-chin, which was a part of J&K is now controlled by China. Yet Aksai-chin gets no mention in the newspapers or the other forms of media for that matter. Why doesnt the government of India hold talks with China regarding the territory that has been illegally occupied by it? Why don't we keep nagging about China's invasion of Aksai-chin to the international community the way we do with the PoK?
The answer is simple. India feels that it is superior to Pakistan and inferior to China. This argument was proved in the Sino-Indian war in 1962, in which the Indian army was humiliated. However, India has enjoyed better results in the wars with Pakistan.

The facts above do not answer the question- What should be done for Kashmir?
There are three choices that we have. Number one, J&K becomes a part of Pakistan. Two, J&K becomes an independent country, and three, J&K remains as a part of India.
Though some people in Kashmir might agree to the first proposal, it will have its own repercussions. The people would become a part of a highly unstable country, both politically and economically. A vast majority of the population in Ladakh are Buddhists, who will openly object to any such proposal.
The second alternative seems highly unlikely too as it requires both Pakistan and China to give up their territory of Kashmir. The independent country, if formed, will be landlocked and will be dependent on its' neighbours for trade, which again is a problem considering the blockage of the route during the winter season.
The third alternative seems to be the most viable one. The recent democratic elections in which people turned up in large numbers, clearly justifies this. But Pakistan and China will not bend when it come to surrendering the illegally occupied land.

The two countries had approached the United Nations in this regard. The UN passed a resolution that Pakistan must immediately vacate all the territories that it had illegally occupied. The second part of the resolution states that the self-determination of the people in that region (Kashmir) must be taken into account.
India cannot expect much from the US. America is too busy trying to eradicate the Taliban and will be least bothered about the Kashmir issue till it manages to clean the Taliban mess.
Since Pakistan has clearly violated the first part of the resolution, India can play tit-for-tat. We need to understand that what has been lost has been lost. It can be gained only by tactical means. Our country spends crores of rupees every day in keeping the soldiers on the border; yet there are infiltrations by the militants. If India can build a wall, similar to the great wall of China, along the LOC and the remaining part of the Indo-Pak border, a few problems can be addressed. Though it will be costly to construct a wall on such a terrain, it will be cheaper when you consider the huge amounts that are spent everyday in safegaurding the borders. Though this idea may sound very strange, I believe this is the only way to go. When a decade of talks could not solve the problem, we cannot be very optimistic.

Thursday, March 5, 2009

Who should we thank now?

There is no doubt that the global recession is worsening day by day. Some banks in the US and Europe have filed for bankruptcy and many are on the verge of it. The recession has had a domino effect and countries across the world have felt the pinch. Asian countries like China and India, which were praised for their fast economic growth, have failed miserably this time around. A simple example to show what the current scenario is like: During the heydays, the entire world was sitting pretty on top of a Tsunami wave not knowing what is about to come. Now, after the wave shattered, everybody on top got shattered as well.
This makes me think, Is India very badly effected?

Leading economists across the world wasted no time in giving us different sorts of predictions about when the world will get out of this mess. A few of the optimistic lot feel that by the end of 2010 we should be back to normal. The pessimistic economists on the other hand feel that the worst is yet to come. When I read their columns in the newspapers, I get confused.
I have an opinion that India has not been effected by the recession to an extent that it could have. This can be attributed to the stringent measures taken by the RBI under Dr. Y.V Reddy. Nobel economist Joseph Stiglitz recently said that if America had a central bank chief like Y.V Reddy, the US economy would not have been in such a mess. His other measures like increasing key interest rates periodically also helped in stabilizing the economy. In contrast, his counterpart in USA kept the key rates low enough to keep the subprime bubble developing. Even today the interest rates in the US are being reduced to near zero levels. During his tenure as the governor of the RBI, he took a number of measures so that Indian real estate market stays healthy. He put a number of checks on banks to de-risk their exposure from the property sector, including increasing the risk weightage for the bank’s lending to the realty sector. He was one of the few people who could see the ill effects of directly lending money to real estate firms. We can clearly see the consequences. Share prices of the realty firms have plummeted within one year. DLF, UNITECH, SOBHA developers and many other realty sector firms have seen the red for the past one year.

There is more. I think we should also thank the Left government for tirelessly keeping the economic policies of the finance minister under check. Preventing the government from allowing FDI in various sectors is a big achievement for the Left parties.
Just imagine what would have happened if there was FDI in Agro-sector, the retail-sector and so on. The consequences would have been far more serious. Farmers commiting suicides to unemployment being created in the retail sector are just the big icebergs that our TITANIC ship has averted.