Inflation in India - Analyzing Its Causes

Inflation is all over the news, touching 8.1%, highest in 45 months. Let me analyze the reasons as if I were Sherlock Holmes! In layman’s terms I would say that inflation is high because the demand is exceeding the supply. Either the demand is more than the supply or supply is less than the demand.

First let’s think about the demand side. To reason the causes first let us see what happened in the last one year. 2007-08 the GDP growth rate was at 9%, which is revised from provisional number of 8.7%. Not going into details we may conclude that we as a country prospered quite well. If I say we as a country prospered, I would say people had more money to spend.

Various central government plans like the national minimum wages guarantee program and other constructive work in the rural India has also meant money in the hands of the poor. I am not saying it is bad or they should not have done that but, yes it causes inflation.

Now let us remember what happened in the Budget 2008. Our Finance Minister did a poll gimmick and waived loans up to Rs. 60K crore. To think of the after effects, the farmers who would have saved money to pay back the loans are free to use the money as they wish. Where would that money go oh! Finance Minister? It is used up to buy things. Demand increases.

To look at the supply side, we sure did not have very good monsoons in last few years. Further more and more farmers are cultivating cash crops to make money (and if that goes naught they kill themselves). This means we have less food to eat isn’t it?

Crude is on a mountain climbing expedition and petroleum products prices are at all time highs all most every day. Though the government is cushioning the domestic prices the world market prices are not controlled. This results in higher transportation cost at the least and the imports become expensive.

On the topic of petroleum prices, we all know that government is giving huge subsidies on the petroleum products. How does that help any one? At the end of the day some one has to pay for the subsidy; and to think of it who else but the “Aam Admi”. Government will some way or other will have to raise the money and probably will impose new taxes direct and indirect. So the discount I now get on the petrol and cooking gas, I will pay back as taxes. What actually causes discomfort is the fact that later when they will impose taxes, it affects the poor by increasing the prices of the manufactured goods.

I would have rather like to see the money given as subsidies on petroleum products invested in infrastructure and making the public transport more useable by public. Further the subsidies are working towards subsidizing pollution.

Congress Government came to power by singing the “Aam Admi” slogan. It has been doing vote bank politics all the time, rather than steering the nation on a constructive path. If there are things which are not in ones control one should let it happen rather than causing more problems trying to control them.


Disclaimer: I am not Sherlock Holmes and I did not do well in Economics in my graduation ;).

My BSNL Telephone Connection

On the 2nd April while I was going for a meeting I came across two BSNL technicians working in my colony. I asked them if they could help me me with the long awaited telephone connection. They were very eager to help me out, and came to my place to check the status. They told me that they could give the connection only if they bring a line from the previous lane of row houses, which is what I always wanted. They had to bring the necessary cable to give the connection and said will cost me 1500 bucks. As I was desperate to have the connection and never had the word "bargain" in my dictionary, asked them to go ahead.

I promised to give them a call the over the weekend but never found the time to do so. So they came calling me on the 4th and I gave them a thousand bucks and said will give the rest when I get the connection. Later I came to know that my neighbor paid only 500 bucks to get the work done and he said that he had to pay less because he had applied six months before me.

They then disappeared over the next few days so I gave them a call 9th and they said they had to reactivate my connection as BSNL had closed the case. Anyway they came and gave the connection on the 11th and informed me that the phone connection will go live that evening or the next morning, which never happened.

I being always lazy to do anything, did not even bother to call them and ask why the telephone was not working but one of the technicians gave me a visit to see if all is working. I was not available at home so they left a message on a piece of paper. I called them the next morning and fixed appointment for the 19th. The BSNL technician was promptly came today and fixed it. Actually the telephone connection did go live as they said but the internal wiring in my house was not properly connected. The jack where the telephone instrument cable is fixed was not wired.

So this is how I got my BSNL telephone connection.

Indian Hokey: Died in Santiago Chilie March 9, 2008

Hockey was introduced to India by the Brits as the case with many other games. Indians took to the game and did very well in the Olympics. India won 6 consecutive Gold Medals in Olympics form 1928 Amsterdam to 1956 Melbourne. In 1960 Rome Olympics India had to be satisfied with a Silver Medal, losing to Pakistan in the Finals. India bounces back to win Gold medal in the 1964 Tokyo Olympic Games. India defeats Pakistan in the Finals taking revenge of the ‘60 loss. Since then Gold Medal eluded India till 1980 Moscow Olympic Games. India won the Bronze Medals in 68 and 72. But the worst was 76 where we finished 7th. But 1980 was redemption time where we got the Gold once again after 16 years. This time India face Spain in the Finals. Since 1980 however India had lost the appetite for the Hokey as Indian become Cricket crazy after winning the 1983 Cricket world cup, and in 2008 India fails to qualify for the 2008 Beijing Olympics.

What went wrong?
Indian Hockey teams debacle of in the 1976 Montreal Olympics where it finished 7th was attributed the lack of experience on the newly introduced astro-turf. We were kings of the ground but Hockey takes a new avatar on astro-turf. While the lacked experience on playing on the new truf, which hindered the ability of Indian Hockey internationally. We lost momentum in nurturing talent at the grass root level due to lack of infrastructure meanwhile people lost interest in the game as a consequence of poor performance.

Another reason could be attributed to the lack of preference and coverage by Media and general public. Hokey never got the print space that Cricket got and the fact is Indians favor Cricket over Hockey. The reason why Hockey is regarded as the national game is due to its incredible showing in the Olympics. To date the only gold medals India ever got in Olympics are in Hockey.

Many people blame the management of Hockey in India for the poor showing. Indian Hokey Federation has been under the supervision of erstwhile Super Cop KPS Gill since 1994. It has been reported in the media quoting IHF President : “We do not have an instant coffee machine that you can get results instantly. It takes time to regain your position. We have put the process in place and the results will take some time.” Makes many wonder how many more days one needs, to brew coffee?

Tiger: Big Cat's Days are Numbered

Lion was the National Animal of India till it got independence, since it was part of the Royal Coat of arms for England. That’s why it can still be found on the Reserve Bank of India’s Logo which was incorporated in pre-independent India. After independence of India the new National Animal was Tiger. The logic behind the change was, Lions were only found in some parts of India like Gujarat while Tiger was found in many states.

Tiger is the means of transport for goddess Durga as well as Lord Ayyappa. Whereas Lord Shiva can be seen wearing cloths made of Tiger skin presumably to suggest that he is beyond ne mortal world. Tiger is revered in the Chinese and Tibetan civilizations.

They say cat has Nine lives, but when it comes to Tiger the Big Cat of India, even the single life is not guaranteed.

National Animal of 5 different countries apart from India, Tiger population has come dwindled from nearly 100 thousand (nearly 40K in India) early in the 20th century to just about 5 – 7 thousand in wild currently. Half of the wild tiger population was estimated to be in India. However per the latest Tiger Census recently released by the National Tiger Conservation Authority put the Tiger number at 1,411 down from 3,642 per the 2002 survey. As per WPSI ‘s tiger poaching statistics 832 tigers have been killed since 1944 to 2007 in India.

The main reason for the decline is the $12 billion illegal wildlife products industry. China, Japan and other South East Asian counties keep demanding Tiger products at any cost and India is the largest contributor to the trade. In the international markets Tiger can fetch upto $50,000, the skin alone fetches nearly $15,000 while the bones cost nearly $4000 per kilogram – while the investment in the poaching each tiger is about Rs. 1 Lakh.

Another reason is the never ending encroachment of humans into the Tiger habitat. Take for example the latest news of a Tigress straying into a village in Sunderbans on Feb 18. Thousands of villagers chased her almost killing her.

Government of India had initiated the Project Tiger in 1973 with the main objective of ensuring viable population of Tigers in India. In 2006 Project Tiger was replaced with National Tiger Conservation Authority .Currently the program is spread over 27 Tiger Reserves covering an area of 37761 sq. Km. The tiger population under the Project Tiger shows that Tiger population has increase from 1638 in 1972 to 3773 in 2002. However the latest census indicating the rapid decline in the Tiger population compared to the previous census suggests some kind of artificial inflation of the numbers earlier.

Government of India has enacted the “Wild Life (Protection) Act 1972” with the object of poaching and illegal trade in wildlife in India. As per the Act offences pertaining to hunting of endangered species like Tigers is liable for imprisonment of 3-7 years and fine upto Rs. 10-25K. Since Inception however only 16 persons have been convicted of killing tiger.

References:
Project Tiger
Wildlife Protection Society of India
Wikipedia
Big Cat Rescue

A Status Check on India's National Symbols

In the year 2008 Indian Hokey Team for the first time since 1928 will not take part in the Olympic Games to be held in Beijing, China. Hokey is the National Game of India. This is the darkest days for the Indian Sport in which we were once undisputed world champions from 1928 to 1956.

This news come on the lines of another highly disturbing bit of information that the Tiger population in India has shrunk to all time low of 1411. Tiger is the National Animal of India.


I will on my part do a status check of how the national symbols of India doing these days. The status check follows very soon.

Challenges faced by Indian Software Industry

1. Indian software industry has become expensive due to the rapid increases in the cost for the manpower.These days the salaries of the middle to top management of any organization are comparable to the costs in the developed nations, add to that the salaries of the lower levels such as the team leaders and the developers has also increased at around 10-20% every year. This increase in the salaries with out correspondent increase in output levels per person is eating into the profit levels of the software services companies.
2. Though initially India provided "less expensive - highly skilled "manpower; currently it has ran out of that "skilled" manpower and the whatever manpower is available is either not "skilled enough" or very expensive.
3. Indian Education system is not able to output the skilled manpower in terms of skill level in the numbers required. The quality is sore point when comes to the education. There are only a few Indian universities and institutions which can be regarded of international quality. The better educational institutions are highly subsidized by the government and hence the development of the same has not been as good as it could have been and money making has been the sole criteria when it comes to the private sector institutions. There are some good institutions in the private sector as well but they are as expensive as any in the developed nations.
4. Infrastructure in India has not been able to keep pace with sustained development in the software industry. e.g. the rental in the housing markets have increased nearly 4 fold in last 5 years, however the incomes for these software professionals have not increased in the same proportion. Further added is the traffic levels in the software dominated cities is another example of the bottlenecks in the infrastructure.
5. Due to the high Dollar inflows into the county due to its lucrative stock market return the Indian Rupee has become very strong compared to the Dollar. The government is also not keen to improve the situation due to the high prices of crude petroleum in the international markets since the petroleum products are highly subsidized in India and any weakening of Indian Rupee will add to the subsidy burden.
6. The Eastern European countries provide as much cost benefit as Indians do and they currently are as competitive as Indians are in cost. Similarly other Asian countries are exhibiting better cost benefit advantage compared to Indian Software Industry.
7. The Advantage for the Indian software industry has been its early beginning, and a large English Speaking populations - the highest in the world. But due to the globalization of economy that advantage is not significant anymore. We have Indian software professionals working in non-English speaking countries similarly now manpower from less expensive non-English speaking countries is trying to compete for the big bucks of Software Services Industry.

The National Past Time of Jumping into Borewells

I don't know why, but it seems every month one child at least seems to be jumping into a bore well or other. I wonder why this happens in India, is it because that some time back when a child called "Prince" was trapped in a bore well he had got extensive TV coverage with a News channel beaming live coverage of him inside the bore well. Further New Channles also staged people making prayers at the nearest available Church, Mosque and Temple. Today's incident of a child named "Raj" I believe is a fallout of that TV coverage of News Channels.

India's First Female President

Finally after 60 years of India's Independence India is - most probably going to get it's first Female President. But the fact that she is a run of the mill politician who has a long history of being corrupt - or so does the RBI and others think makes me feel sad. I appreciate the fact that we are finally having a Female as the First Man (opps! should I say the first woman?!); but I would not surely like to see some one with a tainted background to sit on the President's Chair. It is absolutely not acceptable by the common Indian Citizen that a person who has been implicated (even if the allegations are false) in corruption. There is a saying in Hindi "Aag ke bina Dhuna Nahi Hota" (or something like it) ie. there is no smoke without fire; I really believe in it, and think that Pratibha Patil should not be the President of India.

There is another aspect to the whole issue that being the fact that she is a dummy and a doll chosen by Madam Sonia. I am not really bothered about this but what bothers me is that we are going to have a tainted person - again I must say - even if falsely - is not acceptable. No run of the mill politician please.

World Cup 2007 - India Exit

Super 8 system was incidentally was brought into the World Cup because ICC wanted to give the Minnows a chance to play in the big tournament and also give the biggies a chance to have some warm-up practice during the tournament. Minnows were supposed to loose all their group matches and go home before the Biggies start playing in the Super8. But as it turns out, these Minnows are pain in... - you know where! In the last World Cup, Kenya went on to play in the Semifinals. This year too, Ireland and Bangala Desh will play nearly 6 more matches in the Super8 and give ample practice and help the biggies some chance to break all the previous records, that India made in their match against Bermuda, in an attempt to keep our chances alive.

Since we have done it (rather did nothing); i.e. get out of the World Cup competition even before it constructively started; some heads must roll and here is my list:

1. Get rid of Dravid as Captain, he is a good player but he is not a leader. Ganguly should be brought back into the team. Dravid simply does not have the aggression that Ganguly's got.
2. Get rid of the coach. Greg Chappel was hired to see us though the Word Cup. Well! he seemed to be in a hurry. He did all the experiments he wanted, like giving commando training from the Army. At that time I wondered why the commando training, but now I know. It was to help the players when they are back after disappointing the nation.
3. The Selection committee should be scrapped and a new one brought in. It was their duty to select the team that would bring the world cup home. Not to have a dramatic exit from it.

Let's accept it, we are not a sporting county anyway. The '83 cricket world cup was a fluke. It happened because the Indian team was a bunch of cricket crazy people who were passionate about the game and played for sake of the game. They had nothing to loose but they played to win. But unfortunately our current team do not play to win the games, they play so that others will loose. Our current team is buried under their great records, that they are scared to do anything wrong and take risks.

I am disappointed with the result, but having said that, I kind of anticipated India loosing with Sri Lanka anyway. Bygones are bygones lets hope for 2011.

Should stray dogs be killed?

Question: What are these dogs doing around us?
Answer: We humans domesticated them because we wanted them to help us in hunting, later on when the civilizations developed and Humans started to cultivate and no more required the dogs then simply dumped them. But dogs were after all man's best friend. They did not dump us and started living around the human settlements, living on what ever we throw out as garbage.

They effectively clean more than half of the garbage that we Humans produce. If dogs weren't there you can't even imagine what would the cities would be like.

The case in point in B'lore is about the contents of garbage. The dogs were eating meat thrown on the road side. Since it is meat which even makes men become devils (that is why many religions ban eating meat); you can't really blame the poor old dog.

Question: The Population of Human beings is not growing...it is exploding..shouldn't they be killed.
Answer: Well killing is not the answer, is it?

Nandigram Fiasco...Some thoughts

What ever happening in Nandigram is an Irony of shorts. Left has been traditionally first to strike down any sort of Industrialization any where in India, calling it anti-poor. Now when trying to do their bit and they are facing the ire of their people.

Why can't they come to a place where they get the land willingly by the people? - Because the Industrialists want the land dirt cheap and the govt is always there to do their bit to oust the poor people from their farm lands and act as a mediator or dalal.

Industrialization has to happen and it has to happen with the consent of the people living where the Industry is coming up. The people who get displace due to and Industrial project are also an important stake holders it. These are the only ones who got only to loose anything from the project, hence they should be properly compensated.

Nandigram has been a flash point where it seemed that both the public and the administration has been rogue. The public of Nandigram have never bothered to come to the discussion tables and from the beginning tried to resists the project; probably never bothering to know what they are going to gain out of it. The administration also been slipshod in their approach, when thy first issued notification to acquire the land without consulting the public affected by the project.

Suggestions on Education

Quick Facts:

• Population of India: 109 Crore or Say 1.9 billion
• Literacy: 59% (Male 70% and Female 48%)

Resonable Assumption:Functional Literacy Less than half of the literate population. What is Functional Literacy? Less than half of India’s population that claims to be literate, can use the education that they have received in the school.

English as the Primary Medium of Teaching:English should be taught from 1st standard onwards together with the vernacular language. Further education should be either in English or in the vernacular language of choice of the student from 6th standard onwards. The politicians will put forward the following claims against introducing or teaching in English:

• First hurdle in implementation of this suggestion would certainly be the claims of such a move being unpatriotic: Well I wonder, how I become unpatriotic if I studying in English.

• 2nd claim will be that the local languages would become extinct: English has survived last 70 years in India, therefore the local languages would also survive if they need to. Should they become extinct, let them, so have lot many. Only those languages will survive which have the utility to the common people. In this age of Information highway, where all people live in a global village only few languages will survive.

• The history of the people would be lost: We live for the future and not in the past. The requirement of the future is that we learn the language that will provide us employment. English sure has lived upto that requirement. India is now the world leader in the BPO.

Change the way: The education system in India is highly subsidized, how ever the people do not get the benefit of the money spent by the government. Nearly the entire amount spent by the government is lost in the way and do not reach to the intended destination.

• Instead of the government spending the money through its conventional ways, each school should be funded directly from a Nodal Agency.

• Ever school should have a board of Trustees made up of Teacher/Parent association who would govern the school management. The Trustees should have not more than 3 year terms and should not be able to be re-elected to the board. There should not be any participation from any political leaders.

• Every school should submit an annual Zero Base Budget fully justifying the amount to be spent on various activities. The account should be audited.

Let there be no Free Lunch: Only a handful of children in rural India go to the school. One of the main reason is that they are required to work in their parents farms. One more reason is that they see no justification in continuing the education which will not help them in earning a lively hood. And even those who did go to school grow up to swell the vast Indian educated unemployed.

• What we need are schools that are self reliant and would survive on their own. The students need to be taught how to earn a livelihood apart from the regular education.

• The children should be paid for their work in the school and they should pay themselves for the education; then only they would have a sense of self reliance and also would grow up to be educated. They would have a reason for being educated.

• The money paid to the children would encourage the parents to send them to school rather than making them work in the paddy fields.

• These schools should also be funded by the government as discussed in the 2nd point.

Let sports be remunerative:We are a county of more than a billion but we do not have a gold medal in Olympics in last 27 years. The reason for the same is that sports is not remunerative enough for the anyone to seriously pursue it as a carer.

• What we need is a national ranking system for sports persons. Something like the board exams in the 5th, 7th and 10th standards. Based on these rankings the children should be given stipend.

• The stipend should be more than just peanuts; that is, the stipend should be able support a sports person and his family. If the family is not supported, the family would not encourage the child to pursue sports as a career option; specially where the child is from a poorer background.

• Training in sports is expensive. There should be Sports Universities providing World-class sports training. The ranking should continue till one reaches to the University and should continue there also.

• No one should be allowed to have a free ride and continuous competition should be encouraged so that newer sports people can be discovered and to prepare wold-class sports persons.

• Sports should be made compulsory in every school. Govt. recognition should be given only to those schools which produce a specified number of state and district level sports persons. For example at least 15% of the pupils in every school should have participated in the district level sports events and at least 10% should have participated in the state level.