PC - The man for the job

India's problems are plenty and security related are none too insignificant. Sky rocketing prices, falling living standards, and the rest may bug us, yet our security is of utmost importance to us. We don't want to be victims of terrorism and violence, be it from across the border or from inside. It's all the same and terror has only one face. It is in this context that the role of home minister in a government (both central and state) assumes greater significance. Preventing and countering terror through various modes rests on men wielding the home baton. Today I read an article at OutlookIndia about P.Chidambaram, calling him a controversy man. Comments to the article are interesting too. Read it here.

UPA preferred the Dhoti clad Chidambaram to the Suit changing Patil in the aftermath of 26/11. There was a huge expectation as he reluctantly took over charge. Foes and friends (does he have one?) alike, admire his intelligene yet differ on the efficacy of his actions. Many would not tolerate his demeanour and rightly or wrongly he is labelled as an arrogant intellectual. But then we ordinary men and women of India wouldn't bother with that label as long as he ensures internal security. We would even happily call him that if gives us the security we want. On this front, I must say, and many would accept (in normal territories in India), he has been delivering well, since that fateful day in November two years back at Mumbai.

Chidambaram is always a man on mission, be it finance or at home. He has no two ways about it. His way is his only way. He is a 'Flint' as Outlook called him. Hard to break, hard to remove and could be heavy to bear. As long as he is on the right mission, all around him will benefit and clap. When he is not right, people around him could do nothing but rumble. They can't stop him, at least that is what the media has made me believe.

He is facing the brickbats from the media, from his own colleagues in the ministry and party on quite a few issues. Operation Green Hunt is one, opposition to Chinese telecom imports is another and perceived behind the role in skittling Indo - Pak talks is another. He is perceived to be on the 'RIGHT' mission by left wing ideologists and sympathisers both inside and outside the Congress Party. Also his role in his earlier avatar as the advocate of Sterlite (Minerals major) has muddled the minds of his opponents who chide him for the Operation Green Hunt.

I see his point in being wary of Chinese telecom imports. I am with him on this, let Jairam Ramesh focus on environment and global warming debates. Calling a spade as spade is not diplomacy but diplomacy for decades hasn't worked with Pakistan. As one expert named 'Raza' put it in a 'Times Now' show, 'stop talking with Pakistan till they act'. If PC intently played a role, well then I am not complaining. All this talk of Pakistan itself is a victim of terror won't wash here. They are victims of their own terror cousins whereas we are victims of terror sponsored by ISI and Pak army. There is a hell lot of difference here.

Naxalism is a terror but then guns alone cannot silence it. It may at best squeeze the throat of naxalism but how longer can one do it. You will loosen your grip when pain raises in your wrists and hands. Government and the home ministers will have to come up with a genuine effort to end naxalism through talks after a bilateral ceasefire. Above all the Government must respect the aborigines, their rights of the land before allowing its corporate Czars a piece of their land in forests to mine, mine and mine. Government and the Naxals must come out in open and try out a genuine solution. This is where PC has probably got a big role to play. He must shed his guns alone policy and do some walk the talk.

As far as PC as home minister, despite his shortcomings, he is probably the right person for the tough job. I would settle for a hawk home minister and a liberal external affairs minister with a counter balancing Prime minister. We have the first two but not sure about the counter balancing one.

Green slaying on the way to development

Those green trees won't be there by next week

That's a lovely view of trees lining up on both the sides of the road, it will be a thing of the past- not any more in cities. This is a picture of a section of Mettupalayam Road (NH 86 or something) in Coimbatore. This road leads to Ooty. Now the government is broadening the road into four lanes and hence are cutting the trees. Earlier they did it on Avanashi road (NH 47) in Coimbatore. That was when the many buildings that were standing on that road for decades came to our view. One such building had been constructed by GD Naidu and the front wall of that building bears the words "Construction is for Destruction - G.D.Naidu". How true is it?

We are destroying nature to construct a concrete world, unmindful of the consequences and the perils to which we put our future generations. Who cares? We need the comfort of our cars, bikes and we have no time to wait for the few extra minutes to accommodate nature alongside us. Green is slowly going out of our view in our cities.

I was driving down this road yesterday and captured a last glimpse of this splendour before it is brought down by men with their axes.

RBI and its role in Indian economy

Few weeks back a friend of mine posed a question on RBI and asked what do they do? I told him they regulate banking and financial markets. I am not sure that answered his query but then he was not interested in knowing beyond that. Today I read an article in Knowledge @ Wharton about RBI and their role in compensation of top management of banks, including private and foreign banks in India. They are intervening in order to ensure compensation packages of top executives in banks are not encouraging risky investments / lending. This is something that derailed many banks in the west in the past year. Some words of praise in that article kindled my interest to post here on RBI and their role in ensuring relatively peaceful economic life of India.

RBI is responsible for the monetary policy of Indian economy. It has a mandate to contain inflation. They set base interest rate, influence money supply in the economy, set various reserve ratios for banks, intervene and support Rupee in the foreign exchange market, regulate and guide functioning of banks, financial institutions and non-banking finance companies, set lending norms, set risk weightages for various bank assets, etc. The list is too big to remember, for me, and fill here. Let me, in a nutshell, share here, the major role of RBI and its contribution to our economy.

Banks borrow money (through deposits and other modes) and lend money. Money borrowed is their liability and money lent is their asset. Their return from lending should be higher than the cost of borrowing so that they meet their expenses and then make profits. Naturally banks would want to acquire assets that promise more returns. Remember, higher the return, higher will be the risk associated with it. With more exposure to risk, a bank's financial stability is threatened and their ability to repay their lenders is cast a shadow. RBI steps in here and curbs certain types of asset acquisition by banks. Besides it also assigns a risk weightage to each type and class of banking assets. An asset carrying higher risk weight would require a bank to maintain higher capital while a low risk weighted asset wouldn't put much stress on the capital of a bank. This is to ensure that a bank provides for more capital when it goes for more risky assets. Though this is a global practice, risk weightages for various asset types are fixed by individual central banks (like RBI). RBI is one of the earliest central banks to increase the risk weightage of real estate assets (lending to and investment in real estate) and that promptly preempted over exposure of Indian banks to real estate. It is real estate investment bubble that swallowed many banking monsters in the west. Hope I come out clear in my explanation here.

Bank also invest besides lending. Some times it is easier and safer for banks to invest say in government securities and bonds than lend. This, if excessively done, will stifle economic growth as business won't get enough money. RBI, according to situation, dabble with interest rates to discourage or encourage banks' lending and investment activities. Also it ensures country's primary sector, agricultural, gets enough funding support by fixing a minimum limit (a % out of total lending) for primary sector lending. It also plays a vital role in financial inclusion of rural areas.

Banks cannot deploy all the money it borrows as it would affect its liquidity and financial stability. But then not all will retain enough resources to support its customers and lenders. To ensure banks maintain enough cash balance and also sufficient amount of liquid assets (assets that can be converted into cash on quick notice) it sets, adjusts and mandates banks to maintain Cash reserve ratio (CRRs) and Statutory Liquid Ratio (SLRs). These are set in accordance with prevailing economic condition.

RBI plays a major role in Rupee exchange rate. It intervenes in the foreign exchange market to curb speculation effects on Rupee. But there is a general feeling in the import lobby that RBI mostly acts in the interest of export lobby than in general interest.

RBI annually audit banks and financial companies for compliance with their rules and guidelines on functioning and various norms. Through this they ensure banks and financial institutions comply with rules and guidelines set in the interest of monetary stability of the nation.

Related Link

1. Making Management Pay: Reining in Excessive Risk at India's Banks

A Sun of our own...

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See the flicker? It is our own artificial sun, a first step towards the creation of a mediated climate that fulfils "...the metabolic and physiological requirements of a human being in an environment partially or completely removed from earthly influences"

In case you are haunted by the spirit of scepticism, here's more-

"...i-weather makes it possible to live in a situation completely removed from natural locations by producing an artificial circadian rhythm synchronised to match the inner cycle of the human hormonal and endocrine system. In the absence of the natural terrestrial cycle of day and night, it becomes apparent that this inner cycle in fact lasts around 25 hours, and that body temperature, the alternation between sleep and wakefulness, and the accumulation and secretion of substances such as cortisone and oligopeptides, all depend on it. i-weather.org has therefore put together the first specifically human climate."

If your work forces you to sit glued to a monitor, with the natural light of day and night closed off and replaced by the electric glow- our blog is the place to be- we are health-friendly.

Thanks to iweather.org, where you can copy the javascript and add it to your blog- can't get easier than that, right?

Do drop in now and then, the lights change in our blog, and to remind you that we mean business, we go into flashy flickers when you least expect it.

Have a rocking time.

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Wealth, Greed and Misplaced priorities

Image Credit - www.oecd.org

In a span of 24 hours I came across two articles forwarded to my email id by Baskar. Both are disturbing and at the same time intriguing. They are disturbing because both touch upon the powerful and the super rich and how they manipulate the rules and the world to get even richer, all under government supervision. Intriguing because why on earth people owning yacht's, islands etc. would want to benefit from what governments earmarked for needy and how are they so insensitive to people lives when it comes to money.

The first article exposes the big black hole in American farm subsidy and how the super rich (likes of Rockfellers, Ted Turners etc) make the most of it. Between 1995- 2006, American government had spent $200 billion in farm subsidy and nearly 75% of it had gone to the super rich of America, who own farm lands. This besides the tax exemption they get from agricultural income and holdings. The word subsidy rings words like needy, for public benefit, support, protect in my ears. On what count the super rich deserve to avail farm subsidy, earmarked for true farmers? A billionaire worth $200 billion, availing $54,500 per annum as farm subsidy is a clear indication of a rot in the system. If this is what we can expect from America, just think of India and other developing countries.

The second article brings to light the effect of speculation in commodity derivatives. What effect? Death by starvation of millions of children in under developed and poor countries. This besides the impact on poor in all countries. Commodity derivatives came into existence with a purpose. It helped farmers and processors of commodities to hedge their risk of exposure to changing prices of commodities. On the other end it also helped buyers of these commodities to hedge their risk in fluctuating prices. Only when it moved beyond protecting real risks that the problems started. As long as real risk was hedged (involving farmers / processors, buyers of commodities) prices reflected expected supply and demand. But nowadays, irrespective of supply and demand it is the amount of investor (note, not farmer or buyer, investor) interest in a commodity that determines prices of commodities.

Speculation, where people without any risk in commodities are allowed to buy and sell commodity derivative products, is the main culprit of rising prices of commodities (Wheat, Coffee, Pulses, Wheat, Cotton, Oil etc) worldwide. Commodity exchanges nowadays primarily serve the interests of greedy investors more than needy farmers and buyers. The article linked here clearly establishes the link between speculation and price rise in commodities. Though it is organisations like Goldman Sachs that deal in commodity derivatives, they do it for high net worth individuals.

The wealthy wants to become more wealthy even if it means death of children in some East African nation. Many of these people can spend million a day for their lifetime and yet remain wealthy, without any additional income. A mere concentration on their businesses and their primary line of activity would ensure excellent growth of their wealth. Why on earth these rich people want to make profits in a market that acts as a barometer for commodity prices? It beats my understanding. May be the gambling pleasures. How else could this be explained. This world, its institutions, systems and the very structure of governance of the world (barring few countries) is made to make the rich richer and poor, poorer.

The least one could do now is to stay away from agents / brokers who chase us to invest our hard earned money in commodity derivatives.

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Further Readings of the Curious cases of the Literati..

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Further progress on Curiosities of Literature by John Sutherland-

There is something primitive about my taste- the second chapter is about heads, lungs, hearts and bowels, and I found the passages about the excretory functions interesting-

-that Henry James was sent to a grand tour of Europe to ameliorate his constipation - more here at Project Muse

-the quote from The Miller's Tale

"leet fly a fart,
 As greet as it had been a thonder-dent"

-the possibly apocryphal story of the bargeman who owed up to the act when Queen Victoria broke wind on boarding his barge- the bargeman was knighted for this act of nobility

-and above all- this passage from John Aubrey's Brief Lives-

This Earle of Oxford, making of his low obeisance to Queen Elizabeth, happened to let a Fart, at which he was so abashed and ashamed that he went to Travell, 7 yeares. On his returne the Queen welcomed him home, and sayd, My Lord, I had forgott the Fart.

Government Servants would love Recession

I was checking BBC business website and the words "Why recovery can be bad for you - and recession good" under the title 'Recovery hurts' caught my attention. Intrigued, checked it to learn what the author says. After reading the article I was wondering, what would be the response of a person who lost his job in recession. This post resulted as a consequence of that thought.

In a recession, demand drops, causing drop in supply and with it taking down the price level. As a result inflation comes down and approaches '0'. A lower inflation means higher real income. You will have more disposable income. Also the government will cut taxes and private sector will offer discounts and other offers. All in all your cost of living will come down. So yes 'Recession' is good.

In Recovery, government will cut populist measures, increase taxes, tighten money supply, demand picks up, prices start to climb and the overall inflation will rise its head again. Your disposable income will shrink. Cost of living will go up in a recovery. Cost of living in growth will be higher than cost of living in recession. So why recover? Why should we fight hard to recover? That's a funny thought.

If recession continues, businesses will close down, jobs will be lost and there will be no income leave alone shrinking real income. Recession is good for those who earn; not for those who don't earn. Recovery may be bad for those who earn; not for those who don't earn. Recovery creates jobs, fills more pockets, spikes up demand, cause higher prices and higher cost of living.

Economic growth brings more people on par with you. Recession causes more people on par with you to vanish. With less on par with you, your life improves and with more on par with you, your life becomes difficult. But all this is true only if you remain where you were. If you catch up with growth opportunities in growth periods and hang on to your place in recession, your life will always be bliss, economically.

I am sure you are not wondering where the government servant comes in here. :)

The Pleasures of Literature

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I am reading "Curiosities of Literature" by John Sutherland.

Samuel Johnson is quoted as saying,

"Some people have a foolish way of not minding, or pretending not to mind, what they eat. For my part, I mind my belly very studiously, and very carefully, for I look upon it, that he who does not mind his belly will hardly mind anything else."

I sent a part of this passage as sms to some of my friends- one of them replied with no mean guilt, "I think this is meant for us- we need to be careful".  But Samuel Johnson is not asking us to diet. He is  boasting that he took greater care to eat more, not less,  for Boswell writes,-

"When at table... his looks seemed riveted to his plate; nor would he, unless when in very high company, say one word, or even pay the least attention to what was said by others, till he had satisfied his appetite, which was so fierce, and indulged with such intenseness, that while in the act of eating, the veins of his forehead swelled, and generally a strong perspiration was visible."

How times change- we are all gluttons now, and when we hear mind what you eat, we think we are asked eat less, not more: our enjoyment of eating is now tinged with the guilt of abusing our health: food itself has become a forbidden fruit.

Elsewhere in this chapter, which is all about the pleasure of eating as described in literature, Sutherland quotes a curious passage from a short story by Guy de Maupassant: two strangers, one of them a young man, travel together- he helps a lactating young woman rid herself of the pain of lactation- the passage goes,

"Il se mit a genoux devant elle; et elle se pencha vers lui, portant vers sa bouche, dans un geste de nourrice, le bout fonce de sons sein. Dans le mouvement qu'elle fit en le prenant de ses deux main pour le tendre vers cet homme, une goutte de lait apparut au sommet. Il la but vivement, saisissant comme un fruit cette lourde mamelle entres ces levres. Et il se mit a teter d'un facon goulue et reguliere."

Not having the confidence that I could learn French to decipher the meaning of this passage, which Sutherland promises is voluptuous and icky, I turned to Google Translate:

"He began his knees before her and she leaned toward him, carrying to his mouth in a gesture of nurse, after dark in sound. In the movement she made by taking his two hands for towards this man, a drop of milk appeared at the top. He drank it eagerly, seizing a heavy fruit this udder between these lips. And he began to suck a greedy and lawful manner".

Such are the pleasures of literature.

The Trees and Plants of His Home...

A poem I liked, and tried to bring over to English - Eppothum Pen.

An enmity has survived for two generations
between siblings.
The Men, when they come against one other,
throw a glare, and turn away.
The Women pass by,
their heads bowed down.
And the Children, when there is no one to note,
Share among themselves looks
that none recognise.


Enmity...
whether with purpose or not,
has in its branching hands,
flowers,
the sweetest of the fruits
that there be,
and for the father's rocking chair,
a shade
it extends across the partition wall:
the trees and plants of his home.

-Poem by R. Anuradha

(image credit: eyefetch.com)

Cloudy, breezy, pleasant and that's Coimbatore today

It is that time of the year when you love to take your bike out and roam around the city. It is pleasantly cool and breezy in Coimbatore. Droplets of water from the sky makes the experience even more enjoyable. You would just want to drive, drive and drive. That's how pleasing south west monsoon is for Coimbatoreans. When the monsoon arrived this year it brought the temperature down to comfortable levels. Evenings were cool and Day's were slightly warm (early 30's in Celsius). We even experienced few days of monsoon rain, early in the month. But none of the days were as good as it used to be, but today. May be the trees cut and ever increasing noise of gushing engines is constantly pushing up Coimbatore temperature and monsoon itself is a victim of global warming.

Today was one such day, I was craving for weeks now. I did not feel the need to switch on the ceiling fan in my office. But I did not realise how good the day is until I went out in the evening. What a fantastic feeling it was? Absolutely pleasant and brilliant. I am not done with it yet and would probably go out in the night to take it in more. I don't know whether it will return tomorrow. There were times when a day like this used to repeat for close to a month. But the times we are living in, exploitation of the environment, careless attitude of people has made days like today a luxury and dare I say, a rarity for us Coimbatoreans.