Thursday, November 20, 2008

Gujarat & China show the way…!

Gujarat chief minister Narendra Modi recently announced major investments in the state. According to estimates, Gujarat has cornered about 22% of total investments lined up for India this financial year, the highest by any state. Gujarat Government has been able to achieve this feat on account of its good infrastructure and governance. Modi said that his government will continue to spend heavily on infrastructure projects and that the economic slowdown doesn’t trouble him. He said that the heavy infrastructure spending from the government coffers will stimulate growth and consumption in the state. He also announced a loan interest subsidizing scheme for infrastructure projects in the state rather than letting the private sector put them on hold.
China too recently announced a massive $ 576 billion bailout package for the Chinese economy. Looking into the nuances of the package, a major part of it is directed towards building infrastructure which was not planned earlier. The Chinese government surely sees this slowdown as an opportunity to build up on the areas it is already good at. Such a massive unplanned additional government expenditure on infrastructure will give necessary boost to the economy and also help build infrastructure for the future. The government is ready and willing to sacrifice short term fiscal targets for long term prosperity of the Chinese state.
Back to India, after cutting repo rate by more than 2.5 % and infusing about INR 1,45,000 crore in the Indian economy, we are still in the midst of a major economic slowdown. The measure has been effective but not had the desired effect. The government by reducing borrowing costs & making the required capital available to the industry is doing its bit in not letting the private infrastructure projects go out of stream. But the Indian & the various governments also need to gear up their own spending. Such measures will affect fiscal targets in the short term, but go a long way in maintaining the 8%+ growth rate for India apart from promising good infrastructure. Gujarat & China have taken the lead, now India should follow the path.

Friday, November 14, 2008

How Predictions fool us…

India will grow in FY 08-09 at 9%...8%....!! Oil will peak at $ 200 / barrel by the end of this financial year. Indian aviation industry will continue to grow at 30% and will require around 900 new aircraft by 2020. These are just some of the many predictions reached after thorough analysis by some of the most prestigious institutions throughout the world last year. It’s hardly a year and we know how much has really turned out to be true!!
Sure, the economic conditions have gone through a sea change from the time these predictions were made but isn’t the risk supposed to be factored in while making such predictions?? This is truer especially when such predictions are the base upon which huge business and strategic decisions are made by the government, big organizations and also the investors. These organizations stand to lose billions because of decisions made on the basis of such faulty predictions. Most of this is taxpayers and investors hard earned money.
Is it that when the going is good, we tend to accept any rosy predictions that come our way without really contemplating over the basis of such predictions?? Why we don’t take such predictions with a pinch of salt?? Why we lose our rationality during such good times?? Its only know that all the previous predictions are being re-analyzed and new rational targets set, but the damage already done cant be repaired.

Monday, November 10, 2008

Obama inspiring a minority Indian PM?? (Part-II)

In my previous post, I discussed about the agenda adopted by Obama in his election campaign and why India is still not ready for a minority PM or for an open public debate for the same. I also discussed about how media should be more responsible and not promote racial discrimination. In order not to be branded as a pessimist and also to present the other side of the story, let me now discuss the positives that have come out of the election of Obama as the president towards having a minority PM in India.
“If it can happen in US of A, it can happen here in India; if Americans can get over minority and discrimination, so can we and vote for a minority PM”. These are precisely the thoughts invading the minds of millions in India right now. If the whites in America can get over their chauvinism, put development ahead of race and vote for a black president than why can’t we do the same? The election of Obama as president has forced the majority not only in India but throughout the world to think so. It has influenced people all over the world to think beyond racism and to think of development. Since the events in US of A influence the entire world, every moment happening over there is keenly watched by majority all over. Having a minority President in America has definitely made the majority more open towards having a minority leader in their own backyard.
Speaking about the minorities, the election of Obama has given them hope. Obama has inspired the minorities around the globe that irrespective of their race or origin, if one is capable and has the right motives, he or she can & will rise above the grassroots. He has given the minorities the hope that they will not always be discriminated against. He has given millions the hope that change can happen and if there is the will, it will happen. If change can happen in America, it can definitely happen in one’s own backyard.
Finally having a minority president will make the minorities all over the world more receptive towards US of A, change public perception and gain positive image and better relations for America with countries throughout the world. The change is inevitable and the change has finally come.

Sunday, November 9, 2008

Obama inspiring a minority Indian PM?? (Part-I)

The announcement of Obama as the 44th President of the US of A, has fueled considerable debate in India about a minority Prime Minister. Coming on the heels of the successful stint of a minority President, Indians are aptly justified in dreaming so. But are we really prepared for a minority PM? Will the majority accept the same?
It is a known fact that Obama although a part of minority didn’t win US elections because of his race, origin or anything else that can be described even remotely discriminative. He also didn’t win because the minorities voted for him; he won because in addition to minorities, even the majority voted for him. For Obama, his race was never an issue. He fought the US elections on the development agenda highlighting the current economic crisis, the failed bush administration policies, and the two wars. Obama’s race definitely played a role in getting the blacks to vote for him but the whites voted for him because he symbolized hope, hope that the current crisis can be taken care of and US of A will again reign supreme in the world. Obama is also at ease discussing issues of racial discrimination out in the open as was demonstrated by him by comparing himself to a mutt in his very first press conference after being declared the president elect.
Coming back to India, have we really got over caste politics to have a minority PM? The very idea of having a minority PM shows how deep rooted discrimination is in our society. If it had not for the discrimination in India, we would have spoken of having the best candidate as PM rather than thinking of his race or caste or origin. In India, people still indulge in negative voting i.e. voting to keep a candidate / party out rather than voting for a candidate in (Muslims routinely vote to keep BJP out of power irrespective of the credentials of the candidates); people vote for their community candidates although they may be convicts; candidates frequently buy votes from public and honest candidates are forced to opt out of the election process. India may be the largest democracy in the world, but that doesn’t make India truly a democratic nation. Democracy means not only the selection of representatives by the electorate but it also implies that the voting should be fair and not based on any kind of discrimination. So is India truly democratic?
In India, politicians still plan their campaigns around the race or caste to which they belong rather than the development work they have done for the public. People are still discriminated against based on the part of the country to which they belong. In such a scenario, having a debate on minority PM is only fueling further discrimination. Also, media should be more responsible and promote developmental politics rather than discriminatory politics.
Speaking about the minority leaders in India, Mayawati leads the pack with her Dalit development agenda. Mulayam Singh Yadav calls himself the messiah of the minorities. BJP champions itself on its Hindutva philosophy. Congress calls itself secular and devoid of any discrimination but lets North-Indians suffer at the hands of MNS. Bihar politicians were quick to resign from Lok Sabha when Biharis were discriminated against in Mumbai, but were missing when atrocities were being committed against Christians in Orissa. These are a few examples of how discrimination is really deep-rooted in India. Till the time we get over such public show and acts of discrimination, even the idea of having a minority PM will add to further discrimination and encourage more negative voting. Our leaders need to make development the agenda for their election campaigns rather than indulge in any sort of discriminatory or hate politics. Media should also restrain from fueling such discriminatory thoughts in the minds of the India Public. Media should use its reach and influence to help their readers vote for the right candidate and not the caste candidate.

Wednesday, November 5, 2008

Obama: a hero or superhero for India Inc.??

Finally the confusion is over, Barack Obama will be the new US president and the most powerful personality on this planet atleast for 4 yrs to come!! Love him or hate him, but one has to bear him. So what does it imply for India Inc.? for India Politics Inc.?? The questions are many and answers still many. One thing is for sure that the new president cant afford to ignore the mighty strength of the insurgent India. Mr. President for whatever reasons will be a good friend of India but the extent to which India benefits from this relationship needs to be seen...because the devil lies in the details. Although Bush administration was a global failure, it was big success for India..arguably the best US government so far for India. Apart from the Nuclear Pact, it was the Bush administration that in the name of countering terrorism, forced Pakistan to check the rampant terrorist activity on its soil. Bush administration took India-US relations to new heights.
It is quite evident that the current economic conditions will force Obama to adopt short term protectionist business policies in order to enable US Inc. to tide over the current recessionary pressures and also fight unemployment. Also more stricter regulations are in the offing. Indian companies dependent on US for business may suffer in the short term with uncertainty in the long term. Outsourcing will become the culprit once more and some regulations against it are also in the offing. but the finer print will decide the final implications.
For the time being, India Inc. should adopt a wait and watch policy, as even the Indian government will oppose any regulation that might threaten indian industries.