Tuesday, June 21, 2016

A Look at Rexit

A day before Brexit, there has been a sharp drop in the number of shrill op-ed's and commentaries on "Rexit" - the exit of RBI Governer, Raghuram Rajan.

Reactions to Rexit have, by now, covered the entire spectrum of reactions and predictions, from the impending collapse of the Indian economy to 'good riddance'. As a man-on-the-street, I have been trying to understand why the governement decided not to extend Rajan's tenure, who, by all accounts seemed to be the perfect man for the job.

So far, the many opinions rationalizing Rajan's exit centred on a handful of points: The RBI governor was exceeding his brief; he was playing to the gallery by taking on the role of a public intellectual and a government functionary at the same time; He was not being senstive enough to the plight of rural India by refusing to lower the interest rates, etc..

Today I came across an entirely new angle presented by Gurumurty. According to him, Rajan, with his Western education did not sufficiently understand the importance of small towns, the unorganised sector. He illustrated this with two examples:

  • Morvi, Gujarat: The town produces 70 % of ceramics, 80% of CFL lamps, and the largest producer of clocks in India. It has the highest per-capita income in the country.
  • Tirupur, Tamil Nadu: Here, entrepreneurs with less than 10 years of formal education export more than USD 4 billion worth of knitwear garments.

According to Gurumurthy, towns like Morvi and Tirupur account for more than 58 million unfunded, unorganised businesses that needed a capital of INR 12 Lakh Crores (USD 184 billion). A new financial architecture called the Mudra Bank, to fund these unorganised businesses, has been stonewalled by Rajan at RBI citing regulatory arbitrage and systemic risk.

Obviously there is more to Mudra than meets the eye. Finance is certainly a problem for SMEs, especially for those located in rural areas where the going rate from local money lenders ranges from 30 to 120 percent. If RBI under Rajan was not too keen on having yet another banking/regulatory body (apart from NABARD, SIDBI and NHB) what were the arguments against it?


* Micro Units Development and Refinance Agency (MUDRA) - wiki - https://en.wikipedia.org/wiki/Micro_Units_Development_and_Refinance_Agency_Bank

* Mudra Bank - Genesis - http://www.mudra.org.in/AboutUs/Genesis

* Unnikrishnan, Dinesh (Firstpost, 2015) -- http://www.firstpost.com/business/mudra-bank-has-an-obvious-risk-of-endorsing-shadow-banks-2189251.html
- National Bank for Agriculture and Rural Development (Nabard), Small Industries Development Bank of India (Sidbi) and National Housing Bank (NHB)

* Gurumurty - http://linkis.com/newindianexpress.com/4AnuK
* Sanjay Baru - Interesting - http://m.firstpost.com/politics/the-numbers-rbi-governor-raghuram-rajan-did-not-get-2014-and-282-2846970.html
* Harish - http://indianexpress.com/article/explained/in-fact-where-raghuram-rajan-may-have-erred-in-policy-2865447/

Sunday, June 12, 2016

Marthanda Varma's Legacy

Padmanabhapuram Palace

A casual visitor driving on NH-47 from Kerala to Kanyakumari (aka Cape Comorin), Tamil Nadu is stuck by two things: firstly, the roads in Kerala are now much, much better, and that despite change in language, climate and topography, close linkages continue to be forged between the two southernmost districts of Tamil Nadu and Kerala.

My last visit to the Cape was more than three decades ago. It was a journey in an Ambassador taxi packed with cousins from Bombay and I have vivid memories of the large ponds and hills along the way, the visit to the Vivekananda Rock and the long line of vendors selling polished sea-shells and packets of multicolored sands.

Almost every accessible site of historical interest seems to have strong connections with one king of Travancore - Marthanda Varma (1705-1758) .

Marthanda Varma was perhaps the most proactive and agressive of Travancore rulers. He had inherited a weak state surrounded by enemies, at a time when the Europeans had just promoted themselves from supplicants and spice traders, to power brokers and conquistadors.

Varma survived numerous assasination attempts before striking back to decimate his enemies, and to make strategic alliances that would make Kerala what it is today.

It was also during Varma's reign that the Padmanabha Swami Temple in Trivandrum became a major repository for state treasure. Recent discoveries put the value of this treasure at more than USD 1 Trillion!

Yet, when you look at the map it is difficult to understand why Varma made his capital city at Padmanabhapuram, a city far from his hilly hinterland in Kerala and one that was vulnerable to attacks from the land and sea.

Perhaps due to this vulnerable location European traders thought it was logical to start their conquest of Travancore from Colachel port. In 1741, Dutch East India Company forces led by Admiral Eustachius De Lannoy landed at Colachel port and marched north-east towards Padmanabhapuram Palace, hoping that a quick, dirty battle would force a surrender leading to a full control over the spice trade.

Vattakottai Fort, Kanyakumari Distt, TN
Unfortunately for De Lannoy, superior weapons and battle tactics were not of much help when the Travancore kind, Marthanda Verma called in reinforcements from his coastal domains. The Dutch army was not only defeated but the captured European soldiers were offered terms which turned out to be a lot more attractive than the incentives being offered by their employer which was also the richest MNC of the time.

De Lannoy became the Chief Strategist of the Travancore army and, over the next 20 years,  went on to oversee the construction and reinforcement of a number of forts Kerala. He was also instrumental in building a defense line that stopped the Mysorean army led by Tipu Sultan from conquering Travancore.

The original question, however, still remains unanswered: Why did the rulers of Travancore place thier capital city so far away from the hinterland?


* USD 1 Trillion Treasure in Kerala Temple - http://www.forbes.com/sites/jimdobson/2015/11/13/a-one-trillion-dollar-hidden-treasure-chamber-is-discovered-at-indias-sree-padmanabhaswam-temple/#4a82c6ab21eb
* https://en.wikipedia.org/wiki/Devi_Kanya_Kumari

Saturday, June 11, 2016

Life in the Paddies

Nostalgia drove me to the erstwhile paddy fields of Thrikodithanam in Kerala.

A few decades ago a river of fluroscent green rice saplings stretched as far as a child's eye could see. Neat fields separated by narrow strips of slushy mud, clear streams teeming with Manatthu-kanni (eyes-to-the-sky) fishes and the smell of overturned earth.

All that has disappeared now. As in much of Kerala, paddy fields have been abandoned, filled-in, turned into tiny parcels of land and sold as residential plots. A little patch that now remains of my grandfather's paddy fields is now home to hundreds of unfamiliar insects.

A ten minute walk along the edges of this wild patch revealed these new inhabitants. What are they called?

Wednesday, May 11, 2016

Cutting out the Middleman

A few years ago, Janagraha, a Bangalore-based NGO, started a website called "I Paid a Bribe". It was a hugely popular initiative with thousands of people logging in to report the bribes they had to pay to get work done at government offices across India.

Thanks to this initiative, finally some real data was being generated on how speed money was changing hands. However, limited awareness of the existence of such a portal, and, limited faith in its ability to curb the menace gives us a picture that may not reflect ground realities. For instance, it is difficult to believe that an overwhelming cases of bribery happen in Bangalore city (8300 cases; 10%), and that it is rare in North Indian cities.

A recent op-ed in the Indian Express by Philip Oldenberg has brought out an aspect which is overlooked in the hitherto black-and-white narratives of bribery and corruption. According to Oldenberg, even if an official is honest, all it takes is a the perception of fallibility, for middlemeen to makes piles of money.

Oldenberg gives the example of semi-literate villages who need to get their land valued by government officials. In the face of paperwork that looks formidable, they turn to the friendly neighborhood "dalal" (middleman) who  offered the farmer knowledge, access, and the willingness to dirty his hands, all for a modest commission, with a money-back guarantee.

"...When the officers of the land consolidation department come on their visits, the dalals would approach them in a semi-public way (with farmers watching), whispering perhaps some innocuous something, to give the impression of having a close relationship."

Then, after taking his "processing fees" from the farmers, he would just run the applications through the normal procedures and get the work done. So even when an honest official does not take bribes, the middleman walks away with all the money, reinforcing the public impression that nothing gets done unless you pay bribes!

Which is the most efficient way to cut the middleman out of the system, and prevent him from muddying the waters?

Perhaps it is worth replicating the models followed by MEA's Passport Offices and the Motor Licensing Offices in Delhi. In 1994, when I submitted my first application for a passport to the Regional Passport Office (RPO) at Bhikaji Cama Place, the whole building was teeming with middlemen. At every step, you would be urged to hire "facilitation services" for speeding your application through the red-tape. And sure enough, those who did not pay up would have their applications rejected for the flimsiest excuses. The cost of not paying a bribe would be widely offset by the time and money spent on making multiple trips to the RPO.

Then, in 2006, MEA brought in Tata Consultancy Services (TCS) to revamp the entire RPO system. And what a transformation it turned out to be! Now TCS manages more than 77 passport centres, and has created an efficient online system that handles 40,000+ applications everyday, and has already issued more than 13 million passports to citizens who never encountered either a venal passport official, or the hazards of dealing with a middleman.

What does it take to build similar, transparent systems for all citizen-state transactions?


* Oldenberg, Philip (2016): Why the AgustaWestland bribery scandal reminds me of Miss Marple, Indian Express, 9May16 - http://indianexpress.com/article/opinion/columns/agustawestland-vvip-chopper-scam-agatha-christie-a-crime-and-a-puzzle-2790835/

* TCS Transforms India's Passport Offices - http://www.tcs.com/resources/case_studies/Pages/TCS-Indian-Passport-Office-Ovum.aspx

Saturday, May 07, 2016

Domino's Hairy Pizza

Q - What is worse than finding a worm in your apple?
A - Finding half a worm!

I can attest from personal experience that this is absolutely true. A few years back, I was biting into a "Maharaja Mac" at the Noida outlet of MacDonalds when I spied something green and wriggly in the lettuce. It was half a catterpillar.

Not too keen on making a scene at the ongoing McD kiddy birthday party, I quietly went up to the counter, showed it to the floor manager. He held my half-eaten burger with an expression bordering on surprise and amusement, confirmed that it was indeed a creature that blended nicely into the green lettuce, apologised profusely and replaced it with a fresh burger.

I have often wondered what would have happened if I was carrying a camera or smartphone, or if I had called my journalist friends before handing in the incriminating evidence against MacDonalds India.

This question was partially answered last week when I had a similar experience with Dominos India. A quiet Friday evening dinner at home was interrupted by a shout from our five-year-old son - "Yuk! There is a hair in my pizza!"

Sure enough, there it was - evidence of a careless, hairy Dominos staffer firmly embedded in the pizza base.

This time I not only had a smartphone at hand but also a WiFi access to WhatsApp and Twitter. First I called up the Dominos outlet in Noida to log a complaint but nobody was picking the call. I sent a message to the manager (+91  99108 29258). This time he preferred to see the message (the blue double-tick!) and not respond.

The response on Twitter <@dominos> was marginally better with some show of concern ("not acceptable!") and a hint of possible redressal.

A week later, I am still waiting for a response from the local Domino's outlet.

India is now the second largest market for Domino's outside USA. Two years ago, it was already selling more than 120 million pizzas every year from nearly a 1000 outets spread across ~200 cities. I guess customer satisfaction is no longer a priority when you are already King Kong in the fast food market.

So there you are - Dominos India now serves fresh human hair with its pizzas. It pretends to be concerned, but, quite frankly, couldn't care a damn.


* Rana, Preetika (2016): THIS IS HOW DOMINOS PLANS TO WIN THE PIZZA WAR IN INDIA, WSJ, 5 Feb., 2016, URL - http://blogs.wsj.com/indiarealtime/2016/02/05/this-is-how-dominos-plans-to-win-the-pizza-war-in-india/

* http://articles.economictimes.indiatimes.com/2014-12-01/news/56614530_1_pizza-india-ajay-kaul-jubilant-foodworks

NOTE: The problem with hairy discoveries is that it encourages you to be more careful while eating packaged food. A few days after the "Hairy Domino's Pizza" episode, I found myself biting into a hairy Spinach Lavash Crisp from "Miss Chhotee's" manufactured in Delhi by India Cuisine Foundation PL.  The strand of long, thin hair was, of course, not among the ingredients listed by the manufacturer. 

Monday, April 25, 2016

All for a Foreign Degree

Over the last fiscal year (2015-16), there has been a sharp increase in the outflow of capital from India. Outward remittances tripled to $4 billion till February 2016.

According to an expert, "Higher limits for outward remittances, stronger domestic economy and also more and more students seeking education abroad could have contributed to the rise in these remittances".

Speculation moved to more solid ground when Amitabh Kant, a senior bureaucrat, tweeted:

Under RBI's Liberalized Remittance Scheme (LRS) 2015-16 has seen Indians spent $362 million on traveling, $875 million in maintenance of close relatives and $782 million on studies abroad, taking the total spending to $3.02 billion. Gifts amounted to $398.88 million in the period

So where are out students headed? According to the latest UNESCO reports, 300,000 students from India go to study abroad every year. A majority of them (56%) head to USA while UK and Australia attract ~ 15% each. The rest go to places where “education is considerably cheaper and part-time jobs are easier to secure.” This included Canada, Ireland, Scandinavian countries, Germany and Italy.

It seems Indian students have not yet started following the "Look East" policy. USA, Australia and Europe seems to be the first priority for full-fee students with a trickle of mostly scholarship-funded ones going to Singapore, Malaysia, Japan and China.


* (ET - 1Apr16) - Outward remittances triple to $4 billion till February' 16 -  http://articles.economictimes.indiatimes.com/2016-04-01/news/71977532_1_remittances-sujan-hajra-kiran-shetty

* BS - http://www.business-standard.com/article/finance/huge-outward-remittances-a-recent-phenomenon-116040400928_1.html

* Mathew, George (FE 21Apr2016) -  - http://www.financialexpress.com/article/industry/banking-finance/200-increase-in-outward-remittances/239136

* (ET-2015) - http://articles.economictimes.indiatimes.com/2015-08-28/wealth/65969493_1_north-india-credila-students

* ICEF Monitor (2012) - http://monitor.icef.com/2012/11/number-of-indian-students-heading-abroad-up-300-over-past-decade/

* An excellent blogpost on life at NUS Singapore - https://mohitagraw.al/2010/05/08/study-abroad-in-singapore-my-experience-and-advice/

* IIE - Project Atlas (2010) - http://www.iie.org/Services/Project-Atlas/India/Indias-Students-Overseas#.Vx3UknqDzIU

* MyCollegesAbroad - http://www.mycollegesabroad.com/country/singapore/cost-of-study/

* HotCoursesIndia - http://www.hotcoursesabroad.com/india/why-study-abroad/all-about-studying-abroad/how-many-indian-students-go-abroad-to-study/

* IDP Education - https://www.idp.com/india/studyabroad/whytostudyabroad

Saturday, April 16, 2016

Delhi Belly +

Last week, I had the most unusual of Delhi Bellies.

As far as I can remember, this is the first time I spent more than 24 hours with symptoms that went way beyond the usual stomach upset. Even after I thought my body had expelled the last traces of a mutton biryani, I continued to double up with a stabbing pain on my sides, moving restlessly from the bed to the floor, to violent bouts of vomiting, as though the body was trying to yank out a knife that had got stuck deep inside my empty intestines.

Finally when we go around to seeing a doctor, this seemed to be so mundane, so ordinary a case that I was out in a few minutes with this Rx in hand:
  •  Esoga RD (Abott) - Enteric coated Rabeprazole Sodium & Domperidone SR Capsules (BB 1-0-0 before breakfast) - ₹103 for strip of 10
  • Taxim-O 200 (Alkem House) - Cefixime tablets IP (1-0-1 after meals) - ₹130/strip
  • Drotin (Martin & Harris) - Drotaverine Hydrochloride (SOS) -
  • Floristore (Zyventus) - Probiotic culture concentrate not less than 2.5B CFU capsules (1-0-1 about 30 minutes after meals)

The relief was almost immediate. That little knife in my intestines seemed to melt away, the vomiting ceased and I was up and about with a few hours.

How did this little miracle come about? What did the pills actually do inside my body?

Domperidone, seems to have acted on the dopamine receptors and stopped me from vomiting while the Rabeprazole Sodium - a proton pump inhibitor (PPI) - reduce the levels of acid in my stomach so that the real hero, an antibiotic named cephalosporin (Taxim / Cefixime) busted the bacteria (most likely Helicobacter pylori) which was the root-cause of the stomach infection.

On the sidelines, Drotaverine Hydrocholoride (Drotin) acting as an anti-spasmodic, helping with the vomit-control mechanisms. It is interesting to know that the same drug is used to 'enhance cervical dilation during childbirth'!

Th last set of capsules (Floristore) contained probiotic cultures to restore the ecosystem of friendly bacteria in my stomach that would have got destroyed by the antibiotics.

Medical science seems to have got the entire game figured out. The experience leaves me wondering how people coped with food poisoning before the advent of antibiotics...and with rising levels of antimicrobial resistance (AMR), who will we cope with bacteria that have learnt how to deal with broad-spectrum antibiotics like cephalosporins?




Delhi Metro: The Odds of Being Intolerant

It has been a while since we saw our celebrities wielding the broom. What has become of the “Swachh Bharat Abhyaan” launched with much fanfare last year? 

Despite all the sporadic campaigns, many of us continues to cringe when we see children toss empty chips packets out of school buses; car drivers deftly opening the door of a moving car, to spit paan on the roads; shopkeepers tossing their garbage right on to the streets, and people nonchalantly walking past piles of litter on the streets. In our feudal mindscape it is still somebody else’s job to clean up after we have had our fun.

Delhi Metro has been struggling with the similar attitudes for more than a decade now. It has been successful, to a certain extent, in persuading commuters to stand in lines while waiting on platforms - especially at large intersections like Rajiv Chowk and Mandi House. Inside the trains, while it has now become rare to find men occupying seats reserved for ladies, and yet, a lot of people do get away with littering, sitting on the floors (especially in-between coaches), and consuming food & drinks on the trains.

I had an experience last week that illustrates something that had escaped my notice – the dynamics of behaviour change in our public spaces. 

On an “Odd-Even” day and I was returning home on the Violet Line of Delhi Metro. At Khan Market, a young couple entered the compartment, their arms overflowing with eatables - two cans of cola, and packets of chips and biscuits. The man got a ladies seat vacated for his friend, and both continues chomping and drinking as the train moved on.
Eating and drinking is prohibited on Delhi Metro. Having seen numerous instances of spilled drinks and discarded food on the trains, I ventured towards the man, apologised for intruding, and quietly requested him to avoid eating on the crowded train and to put away the drinks until he was out of the station.

"Sorry, can't help it", he said loudly, "we are very hungry."

Duly rebuffed, and not wanting to make a scene, I backed off. A few minutes later there was a huge commotion. The fact that a polite request had no effect on the couple seems to have rankled a lot of nerves. A number of passengers had now taken on the couple, and their tone had swiftly moved from polite requests, to expressions of derision, disdain, and anger.

 Now the shoe was on the other foot. Left with no choices, the drinks and food packets were quietly tucked away, and tempers started to cool down.

As I stood there marvelling at the way in which a tired, disinterested group of commuters had suddenly rallied together to keep a coach clean, it suddenly dawned on me that in a city were littering is so commonplace, we often overlook the remarkable fact that that a vast majority of passengers on Delhi Metro do follow the rules. 

In general, there is also an amazing level of toleration for those who break the rules -- until a trigger makes people explode in rage. The incident also reminded me that there is very little visible effort from DMRC when it comes to enforcement of rules and regulations. Never once in the past ten years have I seen anybody getting fined for breaking the rules.

In countries like Japan, eating and drinking is permitted on the metro trains. These are societies that value virtues of tidiness, self-control, and care for the others, a value system is hardwired into children from a very early age. As children turn into adults, it is not surprising to see that they need very little external enforcement of rules. A stage is reached when people not only regulate themselves but also take on the onus of gently reminding others to do so. 
It is time we become more intolerant about the litter and garbage outside our own homes.