Barso Re!!

One of the biggest contrasts between my childhood and kids of this genre in India is that - I grew up rhyming - "Rain rain go away, come again some other day," while children of this genre surely do know the importance of rain and won't commit the mistake of asking it go away.

Only till last week, entire India was sweltering from the scorching heat of already prolonged summer. In my terra firma, the water supply was reduced to once every 4-5 days and so grim was the situation in some Indian towns that the government had to distribute water on ration cards. For the past few years beginning March, the sights of women carrying water pots on their heads from long distances and people waiting in queues infront of water carrying trucks and tankers becomes an inevitable routine of life. The status of a water truck in the torrid summers is no less than a celebrity as people come out mostly in their night dresses to collect water. Like previous years, when the mercury swelled yet again, like a Turkey everyone was looking up towards the sky to rain and bail them out. Ah well!! the monsoon finally arrived, however so far it is as dry as the Union Budget 2009-10.

Let's face it ---- India is on the brink of a water crisis. According to Grail Research, "Unless the Indian government make serious changes to the way it prices and manages water, increased consumption by farms, factories and growing population will push drinking water supplies to critical limits by 2050." Global warming has been cited as one of the prominent reasons of less and untimely rainfall, correct, but the matter of the fact is that water is one of the most mismanaged resources in India. Once the monsoon comes, both the common man and government forget about the pain undergone and no effective and affirmative measures are undertaken to avoid the suffering next year. The irony is that on one end of the city you would see people fighting and struggling with their once amicable neighbors to get a day of drinking water and on the other end in a posh neighborhood the same water is used to clean cars and lawns. On the top of it, the availability of free or heavily subsidized water further encourages, particularly the industries, to squander it or use it lavishly. Added to that is the country's low billing efficiency and rampant illegal tapping. Part of the problem is also the depletion of forests that has led to a bizarre climate change, resulting in flood in some and drought in other areas and we have proven time and again that how ill-equipped are we as a nation when it comes to managing both heavy and less rains.

With the increasing population, and the industry's water consumption expected to go up to 11% and 18% in 2025 and 2050 respectively, and further strain water supplies, it is time that the government and people understand the importance of water and work on mapping long term planning and measures to conserve water. The government should launch programmes on a massive scale to create awareness about water conservation and teach people different ways of conserving water. People on the other hand should pursue self dependence and look for various ways to store water in their household ---- rainwater harvesting being one of the most common and successful one. The government should look at developing new technologies and irrigation methods, improving infrastructure to avoid water loss to leakages, treating waste water, and promoting less water intensive crops to save water. It should also revive the old methodology of stopping the surface run-offs and storing water in each habitation to recharge the ground reserves. The government should also continue to work on the National River Linking Project to balance the supply of water throughout India.

While all these programmes and policies are being put to action, we as citizens of India should act responsibly and try every possible way to conserve water. It's probably time to sing "Rain rain come again. Little Arthur wants to play in the rain." After all what's better than dancing in the rain or watching it with a masala chai & spicy pakoras.

-Kartavya Jain

Budget Aala Re!!

Union Budget of India 2009-10 to be presented on 3rd July is without doubt one of the most awaited budgets in the history of India. It will be Finance Minister Pranab Mukherjee's 4th full budget (rest three presented during Indira Gandhi's government). Undoubtedly, our dear Pranab Da has a mammoth task on hand, as he not only has thwart the galloping march of global economic recession to hurt India further, but also has to reduce the fiscal deficit (currently a humongous $62.26 billion). After handing UPA a glorious victory and almost a stable government, the expectations of the Indian Junta are high & hopeful. The FM is well aware of this fact and rightly points out - The focus of the government is the aam aadmi with more employment & income generation schemes.

India enjoyed a gross domestic product (GDP) of over 9% for 3 years consecutively from 2004-05 to 2007-08, but India's economic progress took a beating because of the global slowdown and the GDP now is just 6.7%. Although, the stock market showed signs of revival by touching 15,000 points mark, most of the industrial sectors particularly infrastructure, exports, housing, and textiles are still reeling due to the effects of economic crisis. So, how does the newly elected government plan to bring the growth rate back to 9% ?

Disinvestment of the Public Sector Undertakings (PSUs) seems to be the answer for the funds that the government need to provide the much-needed stimulus to the economy. With Left out of the government, the government will most likely go for a big-bang disinvestment of it's stakes in blue chip companies like BSBL, MMTC, NALCO, NTPC, NMDC, and Coal India. It is expected that the government will add $94.77 billion to its kitty by selling it's stakes in these companies. Infact, at the current market rate the divestment of 10% in BSNL alone could fetch the government a meaty Rs. 20,000 crore (Courtesy: Times of India). The auction of 3G spectrum and the public issues of companies like Oil India, RITES, and NHPC will further increase the government's spending power. If the sale goes as expected, the infrastructure sector seems to be the biggest beneficiary of the increased government spending and it will mean a green blinker for various gigantic road and energy projects.

The economic recession has also bolstered the government's appetite to surge the foreign direct investment (FDI) in the insurance and pension sectors from 26% to 49%. Indian government is also likely to dilute it's ownership in retail & banking sector to increase the foreign currency reserves. However, Congress's key allies TMC and DMK have already given indications that the government's path to divestment & foreign investment will not be hassle free and it will be interesting to see how does the government pushes it's liberal economic agenda. Will the government keep atleast 51% equity in the PSUs? Mostly yes, but we will have to wait and see!!

Despite providing the loan waivers to the farmers and lifting the ban on exports of wheat & non-basmati rice, the agriculture sector which supports two-thirds of India's population, is under crisis. The under-performance of the agricultural sector apart from various external factors has led to the increase in price of the essential commodities. Nearly one-third of India's total population lives in extreme poverty and slashing the prices of these commodities is of paramount importance for the government. The government is expected to boost the agricultural sector by providing cheaper credit, fertilizer subsidies, easing the curbs on grain exports and future trade, and improving the irrigation facilities. On a different note, the government should also promote organic farming, which as compared to conventional farming can yield greater productivity & returns on a small area of land.

India's second largest employer textile industry is one of the most hard-hits by recession with job loses touching 1 million mark. The industry is highly unlikely to meet its target of $40 billion in exports by 2009-10 pertaining to the lack of competitiveness and the economic slump. The budget will cater this issue by mobilising funds to build technologically advanced manufacturing facilities and urging the banks to provide credit at low interest rates. The proposal of scrapping the import duties on synthetic fibre will surely surely help the industry in cutting costs by 5-7%.

Deregulating the auto-fuel prices is another critical issue which Mukherjee may address in his budget. The trio of Indian Oil, Hindustan Petroleum (HP), and Bharat Petroleum (BP) registered a combined losses of Rs. 1 trillion by March 31 2009, mainly due to selling the fuel at government mandated prices. The proposed move is likely to help these companies to cut down the losses.

Indian Junta is also expecting the finance minister to reduce their tax burden by increasing the income tax slabs, which in turn may propel consumer spending and generate demand. India Incorporation is also looking to get a relief in taxes by atleast 5 percentage points. The IT industry already stunned by the indications of US probable move towards protectionism, is expecting the government to bail them by extending the Software Technology Parks of India (STPI) scheme for atleast 5 years and abolishing the fringe benefit tax (FBT).

Government spending on education, health, and employment programmes is going to be high. According to the Assocham (Associated Chambers of Commerce & Industry of India), a stimulus package of Rs. 1 trillion should be announced to put a major thrust in the real estate, housing, and construction sectors. However, considering the high fiscal deficit Pranab Mukherjee has warded off the industry against any expectations to receive big sops and incentives. Government is wary of the fact that it's national rural employment scheme & mollification of the farmer's loans in the last term has led to a tremendous increase in the fiscal deficit. So, this union budget will be a litmus test for Pranab Mukherjee & Co. as not only will they have to ensure the economic growth momentum, but also will to have keep the fiscal prudence in mind.

Well for all the Indians, the expectations are really high as they have done extremely well by giving Congress led UPA a clear majority and by denying Left any role in decision making. Now it's time for the government to live up to the expectations of the Indian Junta, deliver their promises, and come down to business. After all victory does not come at no cost!!

-Kartavya Jain

Racism: Is India Any Different?

Racism, the hated yet globally omnipresent phenomenon is in the headlines again. There has been a spate of vicious attacks on the Indian students studying in Australia in the last month or so, including the attack on a student from Andhra Pradesh which left him in a extremely critical condition. Needless to mention, the attacks and the lacklustre response of Australian authorities led to a spark of protests by the Indian government and the Indian community throughout the globe. The protest was legitimate and as was the desire to live securely in a peaceful society. The Indian media went a step ahead and labelled the entire country as 'Racist' and some groups flagged slogans such as 'Boycott Australia.'

While, I seriously condone the attacks on Indian students in down under and hope that the culprits are put behind the bars soon, are we justified in terming the entire country as 'Racist'? Agreed, there are people with racist mindset in Australia, but which country does not. How sensible is it to label the citizens of an entire nation as racists, because of the misdoings of a few hoodlums? The news channels as irresponsible as they can be have hyped up the issue to increase their viewership and TRP ratings, caring less about the aftermath effects of this generalisation. Has media been thoughtful of the repercussions which approximately 90,000 Indian students and a huge number of Indians families who will continue to stay in the Oz land face?

On one hand, I am happy to see that all the Indians are united against the attacks on their countrymen in a different country, but on the other hand what amazes me is where does our sense of countrymenship goes when it comes to racism in our own country. The racist comment on Shilpa Shetty (Bollywood actress) on a British TV reality show saw such an outrage from Indians that Jade Goody had to apologize publicly. Great work India, but where does this anger disappear when it comes to similar or even more offensive racial discrimination within India. The people from north eastern states are referred with derogatory names and looked down upon because of their eating habits in various parts of India. Is that not racism? Shiv Sena supremo Bal Thackrey against the racist attacks in Australia, wrote in an article in Saamna - “Australian players in IPL teams should be removed. Team owners like Vijay Mallya, Shah Rukh Khan and Preity Zinta should display nationalism by doing so.” Where was his feeling of nationalism, when his nephew Raj Thackerey and the MNS were vandalizing shops and beating people from UP and Bihar claiming that Mumbai belong to the Maharashtrians? Are people from UP & Bihar not citizens of India? Several cities in Gujarat have hoardings enunciating India as "Hindu Rashtra." Does a pre-dominant Hindu population makes India a Hindu nation? The North-South divide is just another example of racism.

The racism in India is not only region based, but also on the basis of religion/caste and skin color. Our obsession with skin color can be guaged from the matrimonial advertisements in the newspapers and also from the fact that the immigrant students from Africa are denied housing and termed as scary & dirty in most of our metropolitans. Caste based discrimination can be seen in India on a day to day basis. In a country that prides itself as being the world’s biggest democracy, more than 200 million people from the Dalit communities suffer from caste discrimination. So much is the level of ignorance that at the United Nations conference on Racism in 2001 in Geneva, the Indian government diplomatically ensured that topic of caste discrimination was excluded from the agenda. On the contrary, the government has made reservations for the backward communities in a plethora of government jobs and even education (whether or not they deserve it is a rabbit's chase for another day). What's the need for these reservations if there is no discrimination, is beyond my imagination? Our lack of committment to erase racism within our own country has weakened our stance to deal with racism against our countrymen abroad.

Coming back to Australia, the attacks on Indian students has to be condemned and dealt with serious concern. The Aussie authorities if they are to sustain their $2 billion education industry (just from Indians) and maintain its nick name of 'God's own country,' should crack down on such violent acts against any community. Indians on the other hand should not only stand united when the rights of their fellow-citizens are squashed in a foreign land, but also when they are trampled within the country. The Aussies who committed the attacks must surely be punished, but at the same time we have a greater responsibility to introspect ourselves and erase racism from India first. We proclaim pride in our unity in diversity, so its our duty to ensure that despite of his/her caste, color, creed, and culture India belongs to every Indian.

-Kartavya Jain

Outsourcing: Can It Be Stopped?

Indian elections are finally over....Phew!! While most of my previous posts were related to elections, I thought of taking a break from the ever enthralling and interesting Indian politics and move over to the charismatic world of business.

A few months ago, Barack Obama created ripples in the outsourcing industry worldwide by proposing to tweak the US tax law by eliminating the tax breaks provided to companies sending the jobs away from US and rather providing it to the companies which create jobs at home. I agree with Mr. Obama that in these hard times of recession when nearly 5 million Americans have filed for unemployment benefits and another 1.7 million are working as part-timers, he as a President needs to ensure that Americans don't loose jobs to other countries. The aim of the proposal, however, seems to be two-pronged - to create jobs which will boost the confidence of a common American and result in an increase in money flow in the market and sustain recession, and to curb tax evasion (companies who derive profits from overseas operations and are not giving it back to the US). If the US tax pundits are to believed, any such legislation will make the US treasury richer by a whopping $60 billion between 2011-2019.


However, in the current economic downturn when companies are applying different cost-cutting measures to survive & grow, and outsourcing being among the tested one, how feasible will it be for Obama & Co. to push companies to do something which is not in their best economic interests. As rightly pointed by the vice-president of one of the outsourcing firms based in Nashville,TN that "Even if the government amends the US tax policy on companies doing work offshore, the changes wouldn't be large enough to compete with the 20-30 % benefit companies get in lower labor costs. With the world economy like an inter-connected web and inter-dependent, the obvious question that comes to mind is - Is this tax proposal anywhere close to becoming a reality or is it just a mere post-election rhetoric ?


First of all there is no such thing as tax breaks awarded to US companies creating job overseas. What the US tax law has is a provision or 'loop-hole' that allows American companies to defer income tax payments on offshore profits until they are repatriated back home in the form of investments & dividends, and this is what Mr. Obama wants to eliminate (probably). Moreover, this move towards protectionism to create jobs at home lacks credibility, because US started loosing jobs long before the economic crisis to countries like Japan & China in automobile and manufacturing sectors respectively, pertaining to their lack of competitiveness and efficiency. Obama & Co. will also be answerable to the multinational companies and the hopefuls who plan to become MNCs? Why would the companies invest overseas if they don't get any incentives to do so? Protectionist measures such as these will not only dent the competitiveness and quality but also aggravate the economic crisis due to the increased costs and hinder the revival of world economy.


There's still a lot of smoke around that if implemented, which companies will be at the receiving end of this tax code change. Will it be the companies such as Wipro, Infosys who provide IT services to American companies ---- probably No, because most of these companies are working in India through a third party. So, who will be affected? As far as my understanding goes, multinationals like IBM, HP, P&G, GM, Accenture with their own offshore centres & operations will be hurt most by the proposed tax code change. So, the next question which comes up is --- Can Barack Obama get the Congress backing to pass this bill ? With the American populace favouring him and wanting to keep the jobs at home, may be he can. But history has proven how much clout does the US multinationals and lobbyists have on the Capitol Hill and with all these grumbling MNCs leaving no stone unturned to make sure that this proposal die a premature death, it won't be a cakewalk for the Obama administration to implement the tax code. Secondly, it is highly unlikely that rest of the world will be indifferent towards this protectionist tax policy.


To summarize, Obama's stringent tax and immigrant laws may turn good for the US in short term, but in long term once the economy is back on the path of recovery, US will certainly need the services of immigrants & foreigners. After all nearly half of start-ups in Silicon Valley were started by immigrants and a quarter of US global patent applications are from foreigners (according to an independent study conducted by Harvard Law School). Importantly, even the implementation of tax code doesn't guarnatee that jobs will stay in US, because it will be in the hands of the businesses to decide what is best for their survival & growth.


-Kartavya Jain

India: 'A Flawed Democracy'

In a recent report published by the Economist Intelligent Unit's (EIU) Democracy Index, India has been dubbed as a 'flawed' democracy. Of the total 167 countries reviewed, 30 were named as full democracies, 50 as flawed democracies, 36 as hybrid and the remaining 51 as authoritarain regimes. The rankings were given on the basis of the country's performance on 60 indicators which measure electoral process and pluralism, civil liberties, the functioning of government, political participation and political culture. EIU placed India at 35th among the 50 countries to be found as flawed democracies. The good news however is that with a score of 7.8 out of 10, India is pretty close to achieving the status of 'full' democracy.

So, why did India not manage to be in the ivy league of full democracies? India unfortunately, scores low in political culture and political participation, corruption and lack of government accountability. At a time when India was gearing up for its 15th Lok Sabha elections, which even the EIU termed as world's largest democratic exercise, the timing of this dubitable distinction couldn't be more perfect.

Rather than considering the study as an eye-opener and vowing to take India to the elite league of full democracy, our politico as usual sneered at the results of the study. Congress spokesperson Manish Tiwari says, "Whoever is responsible for this report needs to see a psycho. India has a functioning democracy from the grassroots to the top. Anyone who calls this a flawed democracy must get his head examined." While BJP spokesperson Ravi Shankar Prasad says, "India does not need a lecture on democracy from Western intellectuals. The people of this country have an unfettered right to choose or unseat any party at the local, state and national level."

But, there are mulitple reasons floating around which makes me believe this study instead of considering it a mere western rhetoric targeted against India. Our two Prime Ministerial candidates are the biggest example of we being a flawed democracy. On one hand, we have L.K. Advani, who was evidently the spearhead and man behind the demolition of Babri Masjid, which not only tarnished the secular image of India globally, but also probably laid the foundation of the communal divide between two prominent religions in modern India. How can we let a person of such fanatic nature lead a secular nation? On the other hand, we have Manmohan Singh, who wants to contniue his stint as the premier of India without even contesting the elections. Democracy is of, for, and by the people, so doesn't it make more sense that the person who holds and is responsible for India's future for the next 5 years be an 'elected' people's representative and not just a nominated party representative. Being a people's representative will not only instill confidence in him, but also will also connect him directly to the people and make him aware of the real issues and problems at the ground level.

The manifesto of the country's 4th largest party SP says, "If brought in power -- the party will solve umemployment problems by putting a hault on computerisation, the salaries provided by private firms will be in sync with the minimum government wages (which will infact lower the income of people working in private sector), and the government will put an end to the expensive english medium schools and use of english (someone needs to remind SP supremo that his own son and heir of SP, Akhilesh Yadav earned his degree from University of Sydney). And if all this was not enough, a sentence on their website "Samajwadi Party is a party primarily based in Uttar Pradesh, where it bases its support largely on OBCs (Other Backward Castes) and Muslims, particularly Mulayam Singh Yadav's own Yadav caste," shakes my belief in our democracy. If the party with such a depressing manifesto can rule India's most populous state and be an important part of the central government, then our democracy is nothing but flawed.

India has fared extremely well in the categories of electoral process, pluralism, and civil liberties and is just shy of becoming a full democracy (8 being the score to be a full democracy). Our dear politicians rather than just boasting to be 'apolitical,' should take a cue out of the study and improve the political participation and political culture. Indian Junta should also exercise their right to vote and vote to form a single party government which without any doubt will expedite the economic reforms and will pave our way to become a full and developed democracy. With India in the midst of its 'crucial' general elections and Indians readying to vote once again, the timing of the emergence of this report could not be more appropriate.

-Kartavya Jain