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Sunday, December 29, 2013

Sunday Reads - Cows might fly & In praise of micromanagement


  • Why emergency was Fali Nariman's toughest moment. (ET)
  • In praise of micromanagement. (BBC Capital)
  • Why the cult of hard work is counter-productive. (New Statesman)
  • Cows might fly. (Aeon
Year-end bonus: Best photos of 2013 from FP.

Monday, December 23, 2013

The Explainer: The Sri Lankan Ethnic Conflagration - Part I

A few weeks back, I promised the readers of this blog an Explainer on the Sri Lankan Conflict. The issue became topical in the light of the Indian Prime Minister’s refusal to go to Colombo for the CHOGM Summit in November 2013. The GoI stated that the refusal was on account of the discriminatory policies adopted against the Tamil community by the Sinhala-dominated Sri Lankan Government.
In the first of the two-part Explainer on the Sri Lankan Crisis, I will focus on the demographics of the island nation, the genesis and evolution of the conflict between the Sinhala and Tamil communities, and various other contributing factors that contributed to the present critical situation.
The conflict between the Sinhala and the Tamil communities has dominated Sri Lanka’s modern history. Ever since the utterly destructive conflict broke out in the 1980s, it has come to shape and define an entire generation of Sri Lankans. It has also charted every aspect of the island nation’s politics, society, culture and economy.

Demographics of Sri Lanka
The island is home to two major linguistic and religious groups: Sinhala-speaking Buddhists and minority Tamil-speaking Hindus. A good understanding of the demographics and the socio-economic status of the two communities will help us understand better the deep mistrust between the two communities.

The Sinhalese are mostly found in the country’s south, west, centre, and east while the Tamils are found mostly in the north and east of the island. Of the total population of 20.26 million (Census 2012), about 74.9 per cent are Sinhalese (Buddhists), 11.2 per cent are Sri Lankan Tamils, while Muslims (9.2 per cent), Indian Tamils (4.2 per cent) and other minorities make up the rest.

Just about five months after India received independence from British rule, Sri Lanka (called Ceylon at the time) gained independence from the same colonial power. 

Seeds of conflict
There is a well-documented trail of Tamil migration to the island of Sri Lanka. The pace of Tamil migration accelerated in the 19th and early part of the 20th century when the British brought in thousands of Tamil labourers to work on the island colony’s tea plantations. In due course, these labourers came to be known as Estate Tamils. 

This was the classic British policy of Divide and Rule at work: prop up the minority Tamils against the British-hating Sinhalese. This was the British colonial way of negating the economic and political influence of the Sinhalese. As was expected, this large scale migration bred resentment in the majority Buddhist Sinhalese community; they viewed it as British favouritism toward Hindu Tamils at their cost.

Sinhala Buddhists claimed that the Tamils, under the British, received special treatment. This, they say, could be seen, even today in the large number of British-built schools in the Tamil-dominated north and east. With better access to education, the Tamils came to dominate government jobs, especially in the fields of civil service and law enforcement agencies.

Rise of Sinhala Chauvinism   
After Sri Lanka gained independence, an assertive strain of Sinhala nationalism stoked the fire of ethnic division until it all erupted in a major conflict in the 1980s between the Tamils pressing for self-rule and the Sinhala-dominated government.

The genesis of the conflict can be traced to the ‘Sinhala Only’ language campaign in the mid-1950s. As they say, one man’s freedom fighter is another’s man terrorist, so is the case here.

The Sinhala Act of 1956 restricted government employment to Sinhala speakers only. It also made radical changes in university admission rules, which effectively reduced the number of Tamils entering higher educational institutes. The Tamils accused the Sinhala government of being discriminatory by implementing anti-Tamil measures, thus effectively reducing them to second-class citizens. 


Sinhala chauvinism led to large-scale violence between Tamils and the Sinhalese. The spectre of ethnic violence forced the Bandarnaike government to enter into a deal with S. J. V. Chelvanayagam, who led the Federal Party, the main party of the Tamils. The so-called ‘B-C Pact’ provided for equal status to Sinhala and Tamil languages. As well, it released greater powers to the local provincial councils in the Tamil-dominated north and the east of the island.


Other Sinhala parties, in the Opposition, cried foul and played to the Sinhala gallery when they accused the government of a sell-out of Sinhala interests. Renewed ethnic violence claimed hundreds of lives. Fearing a Sinhala backlash, Bandarnaike, a Christian who converted to Buddhism, repudiated the ‘B-C Pact’ in 1958. However, the next year, the spectre of the alleged sell-out of Sinhala interests claimed Bandarnaike’s life when he was assassinated by a radical Buddhist monk.

Fanning the flames
 
Following an agreement between India and Sri Lanka, a number of estate Tamils were disenfranchised and repatriated to India in the 1960s and 1970s. The repatriation was high enough to bring down the Tamil population from 33 per cent to 25 per cent. This severely dented the confidence of the island’s Tamil community. 

Another piece of Sinhala affirmative action reduced intake of Tamil students into educational institutes. For instance, after this, the proportion of Tamil faculty in medical and engineering colleges fell to less than 25 per cent in 1974, from a peak of 78 per cent in 1969. The large-scale settlement of Sinhala and Muslims in Tamil-dominated areas also helped widen the social and cultural chasm between the Tamils and the other communities. 

In 1972, the Sinhala-dominated government made Sinhala the country’s ‘only’ official language and also decreed that Buddhism be accorded the foremost place. In this context, it would be relevant to state that while other religions were to be treated with equal respect, Buddhism would still be the primus inter pares, i.e., first among equals.

Violence of identity    
If you are familiar with these aspects of the Sri Lankan crisis, then you must have heard of the Jatiya Sevaka Sangamaya (JSS).

Jatiya Sevaka Sangamaya (JSS) was a trade union, led by a radical Sinhala-speaking minister. The JSS, a fiercely anti-Tamil outfit, accused the Tamils of controlling all economic power by holding levers of trade and commerce. The JSS’s core belief was that while the Tamils have India to go to, the native Sinhalese have only the island as their home.

Political observers opine that the JSS imparted a nationalist ideological angle to the disadvantaged and marginalised sections within the Sinhala society, who, till then, had only a shaky sense of identity.
It is true that a sense of identity—individual as well as communal—is one of the most fundamental aspirations of the elements of a society. An individual’s identity is defined not just by her personal beliefs but also by her presence in the community. A social and communal (group) identity masks the individual’s (often weak) personal identity; this is especially true of individuals who come from the disadvantaged sections (both economic and social) of the society.
In the light of these ideas, we can understand a basic strain of the Sinhala-Tamil conflict: a majority of Sinhala who opposed the Tamils hailed from socially and economically marginalised sections of the Sri Lankan society. 

End of Part I of The Explainer: The Sri Lankan Ethnic Conflagration. The second part of this Explainer on the Sri Lanka Conflict will appear sometime in the next two weeks.

Sunday, December 22, 2013

Sunday Reads - 790 Not Enough for Harvard & Highest Paid CEOs


This edition of Sunday Reads features interesting stuff related to the world of MBA and management. 
  • Look who Harvard and Stanford B-Schools just rejected. (Fortune)
  • Leadership is about emotion. (Forbes)
  • 10 pieces of advice for aspiring entrepreneurs. (CEO)
  • Highest paid CEOs with MBA. (Businessweek)

Sunday, December 15, 2013

Sunday Reads - The art of dying & A graveyard for homosexuals


  • The art of dying. (Lapham)
  • Inside Navy SEAL Team Six's deadliest day. (FP)
  • A graveyard for homosexuals. (Newsweek)
  • 26/11 & how India deals with terrorism. (New IE)

Saturday, December 14, 2013

Same-Sex Relations: Wither Freedom of Choice?

The Supreme Court verdict on outlawing homosexuality has stirred up a raging debate across the country. While I do not agree with the SC verdict, especially after it overturned the Delhi High Court judgment, I think the SC judges, barring the deprecating moralistic tone, were only stating the current law as it exists. (You can read the SC verdict here.)

Let me cite the provision in Section 377. It talks about
Unnatural offences and lays down that, Whoever voluntarily has carnal intercourse against the order of nature with any man, woman or animal, shall be punished with imprisonment for life, or with imprisonment of either description for term which may extend to ten years, and shall also be liable to fine”.

By the way, what is order of nature? Do not species in the animal world indulge in same-sex relations? I think this phrase 'order of nature' itself is obsolete and may I add, against the 'order of nature'.

I personally think being a heterosexual or homosexual or bisexual is a matter of personal choice; it may not appear to be as simple as liking a particular flavour of ice-cream but don’t you think it is JUST that? What two people do in sex, homosexual or heterosexual, is in the order of things (read Nature), as long as it is consensual. 

However, let me also state that I am against any kind of sexual activity, homosexual or heterosexual, against minors or anything without consent (among adults).

In her incisive piece for the Indian Express, Ruth Vanita, co-author of Same-Sex Love in India: A Literary History', writes that: “The judgment claims that Section 377 only criminalises certain acts, not categories of people, such as gay people. However, if penile-vaginal sex is the only type of sex allowed, gay people are automatically condemned to celibacy. Without citing evidence, the judgment states, "Those who indulge in carnal intercourse in the ordinary course and those who indulge in carnal intercourse against the order of nature constitute different classes." This is incorrect; many heterosexual married couples enjoy anal and oral intercourse (outlawed by Section 377) along with penile-vaginal intercourse. Judges who read the fourth-century Kamasutra will discover that.”

I think it is hypocritical of us, Indians, to link same-sex relations with morality and traditions of this nation. Visual images of same-sex relations (and sometimes, sex with beasts) can be found on some temple walls. It does not mean that some religions approve of same-sex relations. It is just that such carnal relations were pretty much accepted in the ancient past. 

Some of us may not like same-sex relations but then should we turn against those who profess and believe in such relations? Wither freedom of choice? 


Monday, December 9, 2013

Why do we love gold?

Since time immemorial, gold has fascinated Indians. Indians love gold for its investment value (considering the inherent store value and for being a great hedge against inflation/currency depreciation), its cultural significance, and its symbolic value in terms of its demonstrative effect in the society.

But the question is, why only gold and why not any other metal? An interesting article, published on the BBC Magazine website, attempts to answer this important question.
.... [T]hat leaves just two elements - silver and gold.
Both are scarce but not impossibly rare. Both also have a relatively low melting point, and are therefore easy to turn into coins, ingots or jewellery.
Silver tarnishes - it reacts with minute amounts of sulphur in the air. That's why we place particular value on gold.
It turns out then, that the reason gold is precious is precisely that it is so chemically uninteresting.
Gold's relative inertness means you can create an elaborate golden jaguar and be confident that 1,000 years later it can be found in a museum display case in central London, still in pristine condition.
So what does this process of elemental elimination tell us about what makes a good currency?
Read the complete piece here.

Sunday, December 8, 2013

Sunday Reads - Sheila ki Bewakufi & Hack Tibet


  • Nelson Mandela in life and death. (The Economist)
  • Sheila ki Bewakufi. (First Post)
  • An effective eye drug is available for $50. But many doctors choose a $2,000 alternative. (WaPo)
  • Hack Tibet. (FP

Sunday, December 1, 2013

Sunday Reads - Weapons, Espionage, Poison, & Heat

Its nice to be back to blogging after a month. We start with Sunday Reads.

BRIC stands for Brazil, Russia, India, and China while MIST stands for Mexico, Indonesia, South Korea, and Turkey. Here's a comparison between the two emerging groups, from Reuters.


Monday, November 4, 2013

Wall Street Boss & Challenge to Indian Federalism


  • Wall Street boss who was glad to be sacked. (BBC)
  • A world to turn upside down. (Economist)
  • Talk to Iran, It works. (NYT)
  • A challenge to Indian federalism. (Hindu; article by JP on Telangana & related issues.) 

Wednesday, October 30, 2013

Bacha Bazi & Lunacy


We all know a full moon is supposed to bring werewolves and vampires out into the open. Belief in its power to drive us mere mortals a little mad is ancient and widespread. Such notions even gave rise to the word lunacy.
  • Kandahar comes out of the closet. (Free Republic) After you finish reading this old but interesting piece, read this FP article on the issue of Bacha Bazi. 
... the practice of bacha bazi -- sexual companionship between powerful men and their adolescent boy conscripts.
This phenomenon presents a system of gender reversal in Afghanistan.  Whereas rural Pashtun culture remains largely misogynistic and male-dominated due to deeply-ingrained Islamic values, teenage boys have become the objects of lustful attraction and romance for some of the most powerful men in the Afghan countryside.
Demeaning and damaging, the widespread subculture of pedophilia in Afghanistan constitutes one of the most egregious ongoing violations of human rights in the world. The adolescent boys who are groomed for sexual relationships with older men are bought -- or, in some instances, kidnapped -- from their families and thrust into a world which strips them of their masculine identity. These boys are often made to dress as females, wear makeup, and dance for parties of men. They are expected to engage in sexual acts with much older suitors, often remaining a man's or group's sexual underling for a protracted period.

Sunday, October 27, 2013

Saturday, October 19, 2013

Sunday Reads - Nights out in a New Town & Jailed for Miscarrying


Monday, October 14, 2013

The Changing Global Economy

A three-part video series from The Economist on how the world economy has changed since the financial crisis of 2008.



Watch the complete series here.

Sunday, October 13, 2013

Sunday Reads - Kept Women & Tyrant as Editor


  • The Tyrant as Editor. (Chronicle of HE)
  • Portrait of a Hero as a Young Man. (Economist) Please note this short but brilliant piece is a book review.
  • Kept Women. (Aeon) Also read The Revenge of China's Scorned Mistresses. (BBC)
  • China's Real and Present Danger (Foreign Affairs)

Watch this Telegraph slideshow on the cricketing milestones in the career of Sachin Tendulkar. 

Saturday, October 5, 2013

Roger Federer's Advice on Talent, Defeat and Ambition

Roger Federer is one of my most favourite sportspersons. The incredible tennis star is hugely talented yet very very humble. 

I especially like Federer's perspective on work and happiness: "Sometimes you're just happy playing. Some people, some media, unfortunately, don't understand that it's okay just to play tennis and enjoy it. They always think you have to win everything, it always needs to be a success story, and if it's not, obviously, what is the point? Maybe you have to go back and think, Why have I started playing tennis? Because I just like it. It's actually sort of a dream hobby that became somewhat of a job. Some people just don't get that, ever." 


Tuesday, October 1, 2013

U.S. Govt Shutdown and Finnish Saunas

Two serious reads with seriously interesting article. First, non-serious stuff.
  • Why Finland loves saunas. (BBC) Interesting.
Excerpt:

The only Finnish word to make it into everyday English is "sauna". But what it is, and how much it means to Finns, is often misunderstood - and it's definitely not about flirtation or sex.

In a dimly lit wood panelled room, naked men sit in silence, sweating. One beats himself repeatedly with birch branches. Another stands, takes a ladle of water and carefully pours it over the heated stones of the stove in the corner.

  • Absurdistan, D.C.: How Republicans are threatening to turn Washington into a failed state. (FP
  •  Why hitting the debt ceiling is so much worse than a government shutdown. (Slate
Excerpt:

A government shutdown is problematic but decidedly noncatastrophic. Not because the government isn’t important, but because the prevailing interpretation of the law is specifically designed to avoid catastrophe. The debt ceiling is another matter. Nobody really knows what will happen if we breach the debt ceiling because it’s never happened before. And everyone worries that it will be awful because nobody’s created any legal provision for not making it awful. A breach is sometimes characterized as a default on the national debt. But it’s actually weirder than that. (End of excerpt)

A graphic from the Economist on the U.S. government finances.




Sunday, September 29, 2013

Sunday Reads - A Singh and a Miss and Wisdom from a MacArthur Genius


  • No, the fall of Lehman Brothers didn't cause the financial crisis. (Ritholtz)
  • Army's Secret Division would have prevented Samba-like encounters. (Sunday Guardian
  • Wisdom from a MacArthur Genius: Grit, not IQ, determines success. (Brain Pickings)

"The great enemy of the truth is very often not the lie 
 deliberate, contrived and dishonest, but the myth, persistent, persuasive, and unrealistic. Belief in myths allows the comfort of opinion without the discomfort of thought." ––John F. Kennedy 

Friday, September 27, 2013

Infographic: Will Oil Prices Spike?

With multiple crises raging in the Middle East, there are growing fears that energy prices will spike. Will they? Infographic via Visual.ly and Saxo.


Middle East Crisis: Will Oil Prices Rocket?


Explore more infographics like this one on the web's largest information design community - Visually.



Wednesday, September 25, 2013

Anil Agarwal on India's Economic Prospects & MSD's Not Alone

Anil Agarwal is the Chairman of Vedanta Resources. He is nicknamed ‘metal king’ for his ownership of a clutch of metals companies, like bauxite and iron ore. In a free-wheeling interview with the Economic Times, Mr Agarwal ­­­rues that “the world wants India to remain an import-based economy”.

He further says that “India produces 130 MT of iron ore. And they are talking about depletion of iron ore reserves. India has potential to produce 600 MT of iron ore annually. We’ll have reserves for another 100 years at 600 MT annually. That is India’s capacity.” 

As a co-owner of an oil major (in partnership with Cairn), he says that, “We need 20 oil and gas companies in India, but we have only three — Reliance Industries, ONGC, and Cairn. Cairn produces oil at three dollars. Can you believe this? And India imports at 110 dollars a barrel. So, priority to local resources has to be given.” Read the complete interview here.

Also read, ‘India’s realty bubble waiting to burst’, from the pages of the Business Line.

M. S. Dhoni is sporting a new hairdo. There have been several before who have had a “good or bad hair day”. Treat your eyes to this DC slideshow on sportspersons with some real weird hairdos.


Monday, September 23, 2013

When did globalisation start?

When did globalisation start? The Economist tries to answer this important question. Here's an exceprt:

Early economists would certainly have been familiar with the general concept that markets and people around the world were becoming more integrated over time. Although Adam Smith himself never used the word, globalisation is a key theme in the Wealth of Nations. His description of economic development has as its underlying principle the integration of markets over time. As the division of labour enables output to expand, the search for specialisation expands trade, and gradually, brings communities from disparate parts of the world together. The trend is nearly as old as civilisation. Primitive divisions of labour, between “hunters” and “shepherds”, grew as villages and trading networks expanded to include wider specialisations. Eventually armourers to craft bows and arrows, carpenters to build houses, and seamstress to make clothing all appeared as specialist artisans, trading their wares for food produced by the hunters and shepherds. As villages, towns, countries and continents started trading goods that they were efficient at making for ones they were not, markets became more integrated, as specialisation and trade increased. This process that Smith describes starts to sound rather like “globalisation”, even if it was more limited in geographical area than what most people think of the term today. (End of excerpt)

Read the complete piece.

Sunday, September 22, 2013

Sunday Reads - Conflict Minerals & Israel's spies inside Syria


  • Conflict minerals: The minerals inside our electronic gadgets have bankrolled unspeakable violence in the Congo. (Nat Geo)
  • Vandana Shiva on the myths and reality in India's food security act. (AlJazeera

Tuesday, September 17, 2013

The Intriguing Story of a Former Goldman Sachs Techie

Finance professionals, especially of the MBA variety, are fascinated with the Wall Street. High finance is seen as a gateway to stratospheric riches and fast-paced career growth.

It is not just the quant/finance guys who make loads of money on the Street. There are the ‘techies’ who create, operate, and manage the backend operations of computer terminals that enable high-frequency trading, which rake in the moolah. The techies also take home fat salaries and big bonuses.

So, what happens when a top-class techie gets arrested by the FBI after being charged with theft by his former employer, Goldman Sachs?
Source: US News

Vanity Fair
has a very interesting piece on the life and times of Sergey Aleynikov, by Michael Lewis, author of The Big Short and Boomerang.

A month after ace programmer Sergey Aleynikov left Goldman Sachs, he was arrested. Exactly what he’d done neither the F.B.I., which interrogated him, nor the jury, which convicted him a year later, seemed to understand. But Goldman had accused him of stealing computer code, and the 41-year-old father of three was sentenced to eight years in federal prison.

Here’s an excerpt:

And then Wall Street called. Goldman Sachs put Serge through a series of telephone interviews, then brought him in for a long day of face-to-face interviews. These he found extremely tense, even a bit weird. “I was not used to seeing people put so much energy into evaluating other people,” he said. One after another, a dozen Goldman employees tried to stump him with brainteasers, computer puzzles, math problems, and even some light physics. It must have become clear to Goldman (as it was to Serge) that he knew more about most of the things he was being asked than did his interviewers. At the end of the first day, Goldman invited him back for a second day. He went home and thought it over: he wasn’t all that sure he wanted to work at Goldman Sachs. “But the next morning I had a competitive feeling,” he says. “I should conclude it and try to pass it because it’s a big challenge.”
He returned for another round of Goldman’s grilling, which ended in the office of one of the high-frequency traders, another Russian, named Alexander Davidovich. A managing director, he had just two final questions for Serge, both designed to test his ability to solve problems.
The first: Is 3,599 a prime number?
[...]

The second question the Goldman managing director asked him was more involved—and involving. He described for Serge a room, a rectangular box, and gave him its three dimensions. “He says there is a spider on the floor and gives me its coordinates. There is also a fly on the ceiling, and he gives me its coordinates as well. Then he asked the question: Calculate the shortest distance the spider can take to reach the fly.” The spider can’t fly or swing; it can only walk on surfaces. The shortest path between two points was a straight line, and so, Serge figured, it was a matter of unfolding the box, turning a three-dimensional object into a one-dimensional surface, then using the Pythagorean theorem to calculate the distances. It took him several minutes to work it all out; when he was done, Davidovich offered him a job at Goldman Sachs. His starting salary plus bonus came to $270,000.

(End of excerpt)

This is a very long piece but trust me, it is an utterly fascinating and intriguing read. Please find the entire piece here. I strongly urge you to read Lewis’s The Big Short and Boomerang, especially the latter.


Monday, September 16, 2013

Infographics: State of the Indian Economy & Banks

We all know that the Indian economy is in dire straits. The GDP growth for 2013-14 is likely to be lower than expected; this has been confirmed by Dr C. Rangarajan, who heads the Prime Minister's Economic Advisory Council (PMEAC). 

(Read The Explainer: GDP)

I found two infographics on the DNA newspaper site; the first one focuses on the current state of the Indian economy and the second one on the tough road ahead for the Indian banking sector. 







Sunday, September 15, 2013

Sunday Reads - India's code of silence over sexual abuse

  • The Syrian War is creating a massive kidnapping crisis in Lebanon. (The Atlantic)
  • India's code of silence over sexual abuse. (BBC Magazine)
  • The Muzaffarnagar Riots: Meltdown of the Majgar Alliance (The Hindu)
  • What Putin has to say to Americans about Syria. (NYT)

Thursday, September 12, 2013

Black Money Abroad: Can we get it back?

It is common knowledge that wealthy Indians, to avoid paying tax, hide their ill-gotten monies in tax havens abroad. (A tax haven is a country/province/territory with very low rates of tax or no tax at all.) 

According to the latest official data released by the Swiss National Bank (SNB), Switzerland’s central bank, the money Swiss banks owed to Indian clients at the end of last year was 1.42 billion Swiss francs (about Rs9000 crore). This amount is about 35% lower than the 2012 figure of 2.18 billion Swiss francs held by Indians in Swiss banks. Now compare this with the quantum of funds held by Indians in Swiss banks in 2006: a mind-boggling 6.5 billion Swiss francs (over Rs41000 crore).

Please note that this is the illegal booty stashed away in Swiss banks only. It can only be a matter of conjecture as to the total size of the illegal monies kept in secretive bank accounts in tax havens around the world, like Canary Islands and Gibraltar.

As you can see, the amount of black money has been coming down in the last few years. It is likely that Indian account-holders (of black money) in Swiss banks may be withdrawing their monies to deposit them in other tax havens, like Bahamas and Liechtenstein.

One major reason behind this fall is the rise in proactive government action against such black money. The U.S. Government has in the past fined UBS, a leading Swiss bank, a record U.S.$780 million. In fact, to avoid indictment, UBS also turned over names of 4000 American clients who had black money accounts. This also helped the U.S. authorities pursue other banks; it is helpful to know that Wegelin & Co., Switzerland’s oldest bank, with no U.S. offices or personnel, was indicted, which soon led to its closure, ending a nearly 275 year run. 

The SNB figures come at a time when Switzerland-based banks are facing growing pressure from several nations, like the U.S. and Germany, to share client details of their nationals.

It is important to bear in mind one important fact: SNB’s figures (described as ‘liabilities’ of Swiss banks towards their clients from India) do not indicate the quantum of the much-debated alleged black money held by Indians in the safe havens of Switzerland. In fact, SNB’s official figures do not even include the money Indians or others might have in Swiss banks in the names of others.

While the Government of India often talks about unearthing black money held in secretive bank accounts, including with some of the world’s leading commercial banks like UBS, there has been no visible work toward recovering such illegal monies.

Amid allegations of Indians stashing illicit wealth abroad, including in Swiss banks, the Government of India (GoI) has said it is exploring all avenues to recover black money hidden abroad; in case of Switzerland, the GoI has signed a treaty for sharing of information on issues related to tax crimes.

One major reason for the massive fall in hidden wealth is the growing international pressure on Swiss banks to come clean on the name of the clients who have hidden their ill-gotten wealth in those banks.

Source: Satish Acharya
The Economist writes that, “The Swiss government has been seeking an agreement with America that would allow the industry to pay its way out of trouble in one go. Instead, it has had to make do with one covering banks that are not already under investigation, which excludes some of the country’s biggest institutions.

The deal is cleverly structured. Of Switzerland’s 300 banks, 285 will be able to avoid prosecution if they provide certain information about American clients and their advisers, and pay penalties of 20-50% of the clients’ undeclared account balances, depending on when the account was opened and other factors.”

The U.S. Government’s approach toward recovering illegally held monies begets one pertinent question: Why can not the Government of India adopt a similar approach? Why can’t it pursue extraordinary measures to recover the hidden wealth held by Indians, belonging to the political and business classes, in Swiss banks and in other tax havens? If the U.S. and Germany could do it, why can’t India do it? 

A couple of years back the Supreme Court chided the GoI for its evasive action on the recovery of black money. Let me cite some excerpts of the SC judgment on the issue.

“The worries of this Court relate not merely to the quantum of monies said to have been secreted away in foreign banks, but also the manner in which they may have been taken away from the country, and with the nature of activities that may have engendered the accumulation of such monies. The worries of this Court are also with regard to the nature of activities that such monies may engender, both in terms of the concentration of economic power, and also the fact that such monies may be transferred to groups and individuals who may use them for unlawful activities that are extremely dangerous to the nation, including actions against the State.

Source: Satish Acharya
Consequently, the issue of unaccounted monies held by nationals, and other legal entities, in foreign banks, is of primordial importance to the welfare of the citizens. The quantum of such monies may be rough indicators of the weakness of the State, in terms of both crime prevention, and also of tax collection. Depending on the volume of such monies, and the number of incidents through which such monies are generated and secreted away, it may very well reveal the degree of “softness of the State.

“The amount of unaccounted monies, as alleged by the Government of India itself is massive. The show cause notices were issued a substantial length of time ago. The named individuals were very much present in the country. Yet, for unknown, and possibly unknowable, though easily surmisable, reasons the investigations into the matter proceeded at a laggardly pace. Even the named individuals had not yet been questioned with any degree of seriousness. These are serious lapses, especially when viewed from the perspective of larger issues of security, both internal and external, of the country.

“We must express our serious reservations about the responses of the Union of India. In the first instance, during the earlier phases of hearing before us, the attempts were clearly evasive, confused, or originating in the denial mode. It was only upon being repeatedly pressed by us did the Union of India begin to admit that indeed the investigation was proceeding very slowly. It also became clear to us that in fact the investigation had completely stalled, in as much as custodial interrogation of Hassan Ali Khan had not even been sought for, even though he was very much resident in India. Further, it also now appears that even though his passport had been impounded, he was able to secure another passport from the RPO in Patna, possibly with the help or aid of a politician.” (End of excerpt; read the complete verdict here.) 

The SC verdict exposes the hollowness of the government's proclaimed intent of recovering black money stashed abroad. I think it boils down to one simple thing: political will. And as we know, in our country, there is simply not enough political will to punish the law-breakers. What else can we expect from a government which itself in embroiled in a slew of scams and which goes to great lengths to protect its corrupt ministers/leaders/MPs/MLAs? 

Wednesday, September 11, 2013

DCT, MBA Class Profiles & iPhone over the Years

The Economic Times has two interesting pieces: one, on how use of databases for schemes like Direct Cash Transfer can go haywire and two, on class profiles of the MBA classes at the IIMs and the Ivy League colleges, like HBS. For example, engineers make up 90% of the class at the IIMs while just 36% of the class at Harvard Business School are engineers.

Also, check out this Reuters Blog infographic on iPhone sales over the years, with its different models.




Monday, September 9, 2013

Global Financial Crisis: Lessons Learnt?

Its been five years since the Global Financial Crisis began. It has since turned into Global Economic Crisis, dragging several developed nations, including the U.S. and Western European nations, into recession. The crisis has singed even China and India. Prolonged contraction in economic activity led to decline in economic activity, great increase in unemployment and engendered social, economic and political crisis.

While the U.S., after several rounds of economic stimulus, backed by the Federal Reserve and the U.S. Government, is back on its feet, several other developed nations, like Great Britain and France are still not yet out of the woods.

As for the PIIGS—Portugal, Italy, Ireland, Greece and Spain—they are still mired in economic morass. Greece has seen six years of contracted economic activity; its GDP is down almost 22% over what it was before 2008.

So, what lessons have been learnt from the Global Financial Crisis? The Economist is running a five article series on the lessons learnt (or have they have been?). 

An excerpt from the first article: 

Start with the folly of the financiers. The years before the crisis saw a flood of irresponsible mortgage lending in America. Loans were doled out to “subprime” borrowers with poor credit histories who struggled to repay them. These risky mortgages were passed on to financial engineers at the big banks, who turned them into supposedly low-risk securities by putting large numbers of them together in pools. Pooling works when the risks of each loan are uncorrelated. The big banks argued that the property markets in different American cities would rise and fall independently of one another. But this proved wrong. Starting in 2006, America suffered a nationwide house-price slump. 

Fascinating stuff. Read it here 

Sunday, September 8, 2013

Sunday Reads - A Declining Empire & Brainwashed Fandom

From today, almost every day, you will find Readings stuff on this blog.
  • How devotees are brainwashed into fandom. (Outlook)
  • All LinkedIn with Nowhere to go. (Baffler) 


Source: Reuters blog

Sunday, September 1, 2013

Sunday Reads - Why India's economy is stumbling & Microsoft's lost decade


  • Abraham Maslow and the pyramid that beguiled business (BBC)

Saturday, August 31, 2013

10 Things You Should Know - Episode XIII

  • Santosh Trophy, started in 1941, is probably the oldest football tournament in India. It is named after the late Maharaja Sir Manmatha Nath Roy Chowdhary of Santosh, a place located in today’s Bangladesh. The Maharaja, who donated the trophy, was once the President of the Indian Football Association. The runners-up trophy is called the Kamla Gupta Trophy. The third placed team receives the Sampangi Cup; it is named so in the memory of Sampangi, a renowned footballer from Mysore. 
  • You must have seen Hindu sadhus smoking narcotic substances, like charas. Do you know why? Sadhus do it to suppress and eventually destroy their sexual desire and just concentrate on meditation. 
  • Why are apples polished or wiped before eating? This is done to wipe away the devil’s finger-marks on the fruit skin to avoid misfortune. This originates from the belief that Satan gave Eve an apple to eat. 
    Ian Cook, Chairman, President & CEO of Colgate-Palmolive
  • Colgate-Palmolive was formed from a merger of soap manufacturers, Colgate & Company and Palmolive-Peet. Peet was dropped in 1953. Colgate was named after William Colgate, an English immigrant, who set up a starch, soap, and candle business in New York City in 1806. Palmolive was named for the two oils (Palm and Olive) used in its manufacture. 
  • A little note on Dhyan Chand, India’s greatest Hockey player
India’s National Sports Day is observed on the birthday of Dhyan Chand,
Dhyan Chand
nicknamed the ‘Wizard of Hockey’. He was born Dhyan Singh.  He joined the Indian Army at the age of 16. The Hindi word Chand literally means the moon. Since Dhyan Singh used to practice a lot during night after his duty hours, he invariably used to wait for the moon to come out so that the visibility in the field (during his era there were no flood lights) improved. Hence he was called “Chand” by his fellow players, as his practice sessions at night invariably coincided with the coming out from the moon.
In the 1936 Berlin Olympics, Dhyan Chand, who was the captain of the Indian Hockey team, had the distinction of scoring 11 out of 38 goals scored by his side. Adolf Hitler, the Fuhrer, was very impressed by Dhyan Chand’s performance in the final, where India whipped Germany 8-1 in front of 40,000 peoples. At a dinner party after the final, Hitler offered to elevate Dhyan Chand to the rank of a Colonel if he migrated to Germany. Ever the patriot, Dhyan Chand turned down the offer.
In 1956, at the age of 51, he retired from the army with the rank of Major. After he retired he coached for a while and later settled in Jhansi. However, the last days of Dhyan Chand were not very happy, as he was short of money and was badly ignored by the nation. Once he went to a tournament in Ahmedabad and they turned him away not knowing who he was. He developed liver cancer, and was sent to a general ward at the AIIMS, New Delhi, where he died on 3 December 1979.
India’s highest award for lifetime achievement in sports is the Dhyan Chand Award, which has been awarded annually from 2002. Residents of Vienna (capital of Austria), honoured him by setting up a statue of him with four hands and four sticks, depicting his control and mastery over the ball. (I could not find any image on the Web for the statue; hence, I am deleting this idea.) ‘Goal’ is the autobiography of Hockey wizard Dhyan Chand. (Please note that this note on Dhyan Chand has been taken from Wikipedia.)
Want to know the backgrounder to the Syrian Crisis? Visit The Explainer: The Syrian Crisis Part I and  The Explainer: The Syrian Crisis Part II