"An Economic Strategy for India' - Some Thoughts

The report "An Economic Strategy for India' co-authored by some eminent economists including our former RBI Governor, Mr. Raghuran Rajan, has rightly suggested that our political establishment should desist from resorting to farm load waivers for political gains.

The report has endorsed the Telangana model of upfront cash support at the time of sowing -the Rythu Bandhu scheme as cure to farm distress, and handing out Rs. 4000 per acre to land-owning farmers.

Based on this limited information as reported in the newspapers, my thoughts are as follows:

a) Recent show of strength by some farmers who marched to Mumbai and Delhi, demanding loan waivers, is a matter of concern. But then what really are the concern areas, did those farmers participating in the march really represent the true nature of our agrarian distress and to what extent, and above all, would a single loan waiver for these very farmers cure all ills plaguing our agrarian sector? These questions need to be evaluated and brought to public discourse for an informed debate on the policy measures required for turning around our agrarian sector,

b) Telangana model has been feted by authors of this report. It would be worthwhile for our policymakers cutting across political ideologies,to institute a comprehensive study on the efficacy of such a measure, especially on the marginal farmers, who are most in need of remedial solutions,

c) Has any public sector bank or any financial institution done even a sample study on those farmers who have availed of loans, to verify if the amounts so disbursed to them have been spent judiciously and for the intended purposes? If so, what have been the findings of such a study?

d) How the farmers in Telangana deal with crop failures on account of various reasons, and what is the support mechanism evolved by the Telangana government for the same?

e) And finally, one of the key problems afflicting the agrarian sector is unfavorable prices for produce when compared to the price paid by the final consumers for the same produce. This needs to be fixed, and among the suggested of measures include breaking of the monopoly of APMC to procure agricultural produce, besides encouraging the industry to join hands with our farming community to ensure a win-win-win formula, that is a formula, which is beneficial to farmers, industrialists, and the final consumers.

All these are of tall order indeed, and would need the foresight of a statesmen at the helm of affairs, to take bold decisions for the benefit of our economy as a whole, key to which lies in our agrarian prosperity.

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Kartarpur Corridor event at Pakistan

In diplomacy, optics play a key role in forming overall perceptions of the intended audiences. And where optics are concerned, the historic Kartarpur Corridor event at Pakistan, was nothing short of a disaster.

No doubt Navjot Sidhu shares a good personal rapport with Prime Minister Imran Khan, and no one should have an issue if he wishes to take some credit for this historic event. But then, when our Union Cabinet had appointed two of our Union Ministers to grace the occasion, due importance should have been given to them. Imran Khan should have reserved his niceties for Sidhu to a low key, as he was on a private visit.

Secondly, let us not forget that this event was close on heels to the 10th anniversary of Mumbai attacks, and the perpetrators of such heinous attacks are yet to be brought to justice in Pakistan. How could an aide of one of the masterminds - Hafiz Saeed, was allowed to make an appearance and shake hands with Gen Bajwa? This optic has its obvious conclusions.

There is no point issuing such statements like, "If India takes one step forward to improve bilateral ties, Pakistan will take two", when actions and words in such an event were in stark contrast.

And at the very least, Sidhu should have politely countered his friend Imran Khan, that neither was he keen to contest elections in Pakistan nor was he aspiring to be our next Prime Minister right now. The fact that he did not do so, clearly puts a question mark on his intentions.

Going forward, let us remain optimistic about Prime Minister Khan being able to deliver on his intentions to mend fences with us. But at the same time, we also need to remain on high alert all the time to guard against any nasty surprises, as has happened in the past.

Finally, if by appointing Sidhu as our goodwill ambassador to Pakistan can make all the difference, then so be it.

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RBI and Finance Ministry

If the RBI's mandate is to ensure monetary stability, and Finance Ministry's mandate is to ensure fiscal stability, then can the monetary and fiscal stability co-exist without RBI and the Finance Ministry going hand-in- hand? Typical example, under normal circumstances, high taxes and less government spending should lead to lower interest rates to ensure the overall economic growth does not suffer.

Yes, there may be healthy differences between the two depending upon overall situation prevailing in the financial system as a whole. But at the end of the day, the Hon'ble Finance Minister is an elected representative of the people of India, and is answerable to our Parliament.

Thus, the top leadership of the RBI needs to be sensitive about the concerns expressed by the Hon'ble Finance Minister, and work out amicable solution/s to address the same.

High Oil Prices and Weakening Rupee- Options for India

The continuing mayhem in our stock markets, mainly due to sanctions on Iran by the US, resulting in higher crude prices and weakening rupee, needs to be viewed from the prism of wider geo-political implications. That this mayhem does not mirror the strong fundamentals of Indian economy at present is beyond doubt.

That higher crude prices driven by OPEC is not in the interest of even the US, is reflected by the following tweet from President Trump in April this year:

"Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea. Oil prices are artificially Very High! No good and will not be accepted!”

While abrogating the nuclear deal with Iran, as negotiated by his predecessor, President Trump made it clear that he was open to another such deal with Iran which according to him was just and fair.

Now, an opportunity for India in this crisis. We should:

a) Form a grouping of major oil importing countries as a counter to OPEC. The key objective of this grouping should include - setting an upper band of crude oil for OPEC, actively supporting each other to reduce dependence on oil imports from OPEC, and aggressively working on increasing the usage of alternative fuels and and associated technologies, besides assisting each other in oil exploration projects. Such a grouping is likely to have its impact on OPEC, by reducing their scope of maneuverability in raising oil prices. If nothing else, it is at least likely to bring differences of opinion in OPEC which is not a monolithic entity, and

b) Having good relations with both US and Iran, we should work aggressively on back channel diplomacy with both, to arrive at a win-win nuclear deal, which will assuage the concerns of Trump administration on the deal entered by Obama administration. Yes, this may mean tweaking some clauses of that agreement over which Trump administration has concerns. This would necessitate some quid-pro-quo by the US as well, but that would be in the its interests as well, if unlimited transfer of incomes from major oil importing countries including the US, to OPEC via reduced oil production and high oil prices has to be kept under check.

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Imran Khan's Intentions

Imran Khan's intentions are fine indeed where Indo-Pak relations are concerned, and as it is believed that he has the backing of Pakistan Army, we can draw some comfort that our bilateral relations can see much needed improvement.

Not too long ago, General Bajwa too echoed similar sentiments where our relations are concerned.

But, if history is any guide, then while we can remain optimistic but without letting our guard down.

The Simla Agreement of 1972 can serve as a reference point. That no one in Pakistan even mentions about it today, should say it all. Why can't Imran Khan make a mention about it boldly?

Then, can't forget the over-optimism created in the media when our then PM Rajiv Gandhi visited Islamabad for SAARC summit in 1988, and was welcomed by his counterpart PM Benazir Bhutto. Their youth and charm created so much of hype out here, that it appeared "no-brainer" that all was great with our bilateral relations. That a year later, terrorism raised its ugly head in Kashmir with able backing from Pakistan was a rude jolt for us.

Other rude jolts were to follow :

* the famed bus ride by our then PM Vajpayee in February 1999 was followed by Kargil war,

* the hijack of IC 814 in December 1999 saw the release of Maulana Masood Azhar who was granted shelter in Pakistan,

* the over-hyped Agra summit in July 2001 was followed by an attack on our Parliament in December that year,

* Impromptu visit by PM Modi to Islamabad was followed by Pathankot terror attack etc etc

Above all, no one knows if the perpetrators of Mumbai attacks would ever be brought to justice.

In a nutshell, our approach vis-a-vis Imran Khan's government (assuming he is sworn in as PM) should be one of cautious optimism, without letting our guard down, or once again engulfing ourselves in "smoke screens" created by our own illusions.

New Disruptions by Reliance Industries

Reliance Industries Ltd's 41st Annual General Meeting, has put not only the telecom, but also e-commerce, and home entertainment players on notice.

While the likes of Airtel, Vodafone, Amazon, Walmart-Flipkart, Netfix, and other smaller players in such segments are likely to up the game with aggressive strategies to further consolidate their respective positions, the key strategy for RIL would be to get the first mover advantage in 5G connectivity, besides fixed broadband fibre connectivity to reach millions of households, not only in metros but in tier 2, 3, and 4 cities as well.

The state-of-the-art IT infrastructure with focus on data analytics, artificial intelligence, supply chain management systems, and customer relationship management systems are the critical minimum requirements, as RIL transitions from a mainly B2B entity to a B2C entity.

Further, the transition from an oil and gas behemoth to a telecom and e-commerce conglomerate is going to be big challenge for the third generation Ambanis, who will need to change the culture at RIL to meet the aspirations of the bright talent needed to spearhead such a massive transition, which would be the key to such a transition.

Now, the million dollar question is, "How long can the Walmart-Flipkarts and Amazons keep bleeding themselves just to keep their market shares?"

While RIL is a public listed company, is sensitive to the expectations of its shareholders, and norms of corporate governance, the e-commerce biggies are not so transparent in their financial disclosures as of now.

And finally, it has set its sight on education, healthcare, and education as well, courtesy 5G related technologies. What's left for others?

ICICI Bank-Videocon Controversy

If ICICI Bank was just part of a Rs 40,000 crore loan extended to Videocon by a consortium of 20 banks, then why is the focus just on ICICI Bank? Was it the lead bank in the consortium, and was Ms. Kochchar the key decision maker on behalf of ICICI Bank where this decision was concerned?

While the jury is still out, as to whether or not there was a conflict of interest while extending loans to Videocon group is concerned, one wonders if a key business practice adopted by various banks, that is of strong relationship management with most of their important customers would now stand compromised, lest any such account turn NPA later on and fingers be pointed even in bonafide cases?

Facebook-Cambridge Analytica Controversy

Last year, i bumped into an old acquaintance of mine, who is one of the renowned ENT specialists in New Delhi. After exchanging pleasantries with him, I asked for his visiting card, just in case I needed to consult him in future.

Very proudly he said, "Oh just google my name and you will get all my contact details.". I was impressed no doubt.

But today, when I read about the Facebook and Cambridge Analytica controversy, where the key issue is unauthorized access of Facebook user data by latter, I wonder if they deserve all such flak? Yes, no doubt unauthorized access of anyone's profile/contact details to serve political or commercial interests is ethically wrong, but then hasn't it been happening since ages, long before the advent of social media?

Let me be candid. How many of us on Facebook or any other social media site, have friends/contacts whom we have never met, and how many of us get a thrill from likes/appreciations to our pics and posts from such unknown friends/contacts?

Indo-Pak Relations

As per today's newspaper, Pakistani Envoy to India, who has been reportedly summoned by his government for consultations over the alleged inappropriate conduct by our agencies here, may not return soon.

Surely, if the newspapers reports are to be believed, our diplomats too have similar complaints with their Pakistani hosts, including the denial of membership to our High Commissioner at the prestigious Islamabad Club.

Well, the bilateral ties between India and Pakistan have been strained since the past seven decades, notwithstanding brief spells of 'monsoon showers' in between. And any expectation of a durable detente in our bilateral ties as of now seem nothing short of a wishful thinking.

But, the least we can do is to ensure is to observe all international norms with regard to treatment of their envoys, insisting on a full quid-pro-quo from Pakistan.

I am really amazed to hear stories from those who have visited Pakistan, with regard to the love and affections showered on them by Pakistani citizens. Especially, if they come to know that the ancestors of those visiting Indians hailed from Pakistan.

We Indians too reciprocate such gestures, especially to visiting Pakistani sportsmen and artists.

Then, why such bitterness at the other levels?

Scam involving Letters of Undertaking

Some key questions that come to my mind regarding the latest scam are:

a) What are the guidelines defined in our banking system before Letters of Undertaking (LoUs) are issued in favour of some clients? As these guarantee liability payments by one bank to another, isn't creditworthiness besides impeccable business credentials of their favored clients supposed be the topmost criteria?

b) As PNB's SWIFT system wasn't 'married' to their core banking system, was this not known either to the RBI or the powers that be at PNB since ages? Or did it come as news when this scam unfolded?

c) As Nirav Modi's firm managed to get LoUs issued without any margins for whatever reasons, how can he be accused for fraud, unless it is proved that he made fraudulent representations to avail of the same?

d) The ex-PNB staffer who is making news should be the one on the dock for using SWIFT system as his personal email id. The least that could have in put in place by RBI was to have two key authorities of the bank from different departments to authenticate such messages, so as to at least eliminate the possibility of one authority being compromised to the detriment of bank's interests.

e) As the beneficiary of LoUs would have been Modi's business partners, it is going to be an herculean task for our investigators to nail Modi guilty of any crime unless they conduct a forensic audit of the amounts released on the basis of such LoUs to identify its trail of movement,

f) And above all, it is indeed mysterious that how come not even the RBI considered it prudent to conduct forensic audits of such instruments like LoUs and SWIFT systems as a precautionary measure, to ensure that there was no compromise on the interests of the banks concerned?

Perhaps, this incident should serve as a wake-up call for our entire banking system, and lets hope and pray that is the last of such scams.

Crisis in Maldives

Two statements from China with regard to crisis in Maldives:

a) It is an internal matter and there should be no external intervention, and

b) We do not want another Doklam like situation with India.
Should put our concerns at rest with regard to the Chinese intentions in that island nation. Besides, China has also turned down a request from the Maldivian government to land its military boots in Maldives to secure its interests, stating that Maldives can secure itself.

But, parallels are being drawn with Operation Cactus, executed by India in 1988, to liberate Maldives from some mercenaries who were perhaps financed by some Maldivian national. This operation was carried out as per the request of then Maldivian President Gayoom, while in the current scenario is the Maldivian opposition which is requesting for military intervention by India.

Here, it is pertinent to recall the disaster which confronted the IPKF in Sri Lanka, which was originally tasked with ensuring peace between the Sri Lankan military and the LTTE cadres, but soon got engulfed in a situation which it was least prepared for.

Right now, even though we have erroneously refused to entertain the special Maldivian envoy, quoting reasons such as time constraint etc, we need to be in constant touch with the Maldivian Ambassador in New Delhi, and be clear on our expectations from their current President, as well as the options at our disposal should any off those options be required to be availed. Yes, our leadership has done the right thing by taking the US as well as Saudi Arabia on board vis a is Maldives, and as per the newspaper reports we are in touch with the Chinese as well on this issue.

But, it would have been reassuring if the Chinese leadership would have emphasized to the Maldivian President to restore democracy and will of the people, to prevent any civil war kind of scenario. That such as statement is yet to come from the Chinese is a matter of concern, notwithstanding that they themselves are yet to demonstrate their commitment to such principles.

Till then, its wait and watch, and hope that the will of people of Maldives reigns supreme, without having to land even a single foreign soldier and without having to fire even a single bullet

An Unprecedented Press Conference

I had once read somewhere that, the Hon'ble Judges should be heard only vide their judicial pronouncements, which could have far reaching consequences for the society at large, besides meeting the ends of justice which is expected through such legal luminaries, who have been entrusted with such coveted positions in our legal system.

The unprecedented press conference by four of the distinguished judges of our highest citadel of justice- our Hon'ble Supreme Court - seems to have belittled the said assertion.

Having gone through the detailed coverage in Times of India dated 13th of January, my observations are as follows:

a) Any case which gets referred to and then admitted in the Hon'ble Supreme Court, has a significance over and above all the cases under adjudication in any court of our country, including our Hon'ble High Courts. Thus, the opinion that certain cases referred to and admitted in the Hon'ble Supreme Court could be of far reaching consequences' for the Nation relative to other cases under adjudication in the Hon'ble Supreme Court, can at best be a matter of perception, at least where the interest of our media in such cases is concerned, 

b) That the collegium system of appointment of judges to the Hon'ble Supreme Court is flawed because of which some of its Hon'ble Judges, are not competent enough to handle cases which are deemed 'politically sensitive', can be debated endlessly. The final trigger for the stunning press conference by the four of the senior most judges came at 10.15 am on 12th of January, when the Hon'ble Chief Justice of India - Dipak Misra, bluntly turned down their last minute request to shift a 'politically sensitive' case from a particular bench. The Hon'ble CJI made it clear that he would not break the tradition, backed by a recent five-judge bench decision giving him the sole discretion to assign cases to benches of his choice. The Hon'ble CJI's decision was backed by the November 2017 verdict saying that CJI was 'master of the roster' and was free too sign cases to any bench,

c) A letter written earlier by the four judges to the Hon'ble CJI also mentioned that "The convention of recognising the privilege of the CJI to form roster and assign cases to different members/benches of the Supreme court is a convention devised for disciplined and efficient transaction of business of the court, but not a recognition of any superior authority, legal or factual, of the CJI over his colleagues. It is too well settled in the jurisprudence of this country that the CJI is only first among equals - nothing more and nothing less." The Hon'ble CJI's office responded by saying "if these senior most judges were equal to the so called junior judges in the Court, then what is the grievance against a case getting listed before judge X or judge Y?"

d) Now, if the intention of any of these four distinguished judges were to protect the interests of the quality of justice being delivered by our highest citadel of justice, then at least one of them should have resigned as judge, and as a practicing advocate appealed against the November 2017 decision of the five-judge bench, which gave the Hon'ble CJI absolute authority in assigning cases to respective benches of the Hon'ble Supreme Court. Or, at the very least even without stepping down, should have informally evolved consensus within the twenty -five of their colleagues in the Hon'ble Supreme Court, with regard to the appropriate procedures to be adopted by the Hon'ble CJI while assigning cases. This would have been very difficult for the Hon'ble CJI to ignore,

e) The perception one gets from the sequence of events as highlighted in Times of India dated 13th of January, is that these four distinguished judges have implicitly attacked the collegium system of appointment of judges, which is indeed ironic, considering that they themselves are the beneficiaries of the said collegium system. Why can't they be explicit and evolve a consensus within the legal fraternity about it? Why just go to the media to air their grievances thereby shocking "We the People of India" ?

f) Finally, I am compelled to agree with the observations of Justice (Retired) R.S. Sodhi, who has been quoted in the said Times Of India, "All the four judges should be impeached, they have no business to sit here and deliver verdicts anymore. This trade unionism is wrong...They are only four, there are twenty three others. Four get together and show Chief Justice in a poor light. It is immature and childish behaviour. We have dissenting views on so many things. But we do not go around washing our dirty linen in public...judicial impropriety.. The damage can't be mended easily."

Hope and pray that this ill-conceived press conference was just another aberration, in the otherwise much cherished history and track record of our judicial system. 

Yes, with changing times, our judicial system may have lots more to be desired, and those much desired changes come about in a dignified manner, which only reinforces the faith and confidence of "We the People of India". Amen

Turning Around the 'Maharaja'

Air India was certainly like a blotting paper for our government, having consumed nearly Rs. 43,000 crores in hope of a turnaround, but without any signs of revival as yet.

Yes, announcing a 49% FDI in it was a welcome cheer for the international community, as our treasury could not continue bleeding indefinitely because of it.

But before doing so, was it not possible for our government to try giving full autonomy to its management and staff, for turning around our NationalCarrier? Had this attempt failed, we could have invited our private sector to bid for a majority stake in the airline, and only then could we have invited FDI.

Certainly, ridding the 'Maharaja' of political interference, allowing its current management of doing away with 'n' no of subsidized tickets and freebies, reworking its nonviable routes, and above all matching up to its private counterparts in terms of efficiency and services, could have also delivered the intended results.

And what could have been the real 'killer stroke' is making its staff category employees a partner, by making them eligible for part of its profits. Its so-called union would have become redundant, and they would have delivered more than their 100% to the make our 'Maharaja a Royal Entity' among our PSUs.