Business to the Buddha

Tag: Crony capitalism

  • Panama leaks, IPL & the rulers







    Kill! Kill! Kill! the arena was full with the viewers and they were shouting, it was horrific scene. The gladiator was looking at almost a corpus – the other gladiator – who had lost the battle. Fate of this gladiator was in the hands of winner or the king. People were giving their verdict ‘to kill the losing gladiator’. What was wrong with these people who were enjoying such brutal and life taking game? I suddenly woke up and started thinking about this dream.

    The arena has changed, shouts for kill is changed too and now instead of the queen asking us to “eat cake, if we do not have bread.” The politicians are serving us IPL and other trifling stuff to divert our attention.

    No wonder there is widespread corruption, Panama Leaks seems to be the tip of the iceberg. Can we doubt of existence of 100s of other law firms in Panama or any other tax heaven? If there are ten more such law firms worldwide, what number we are looking at – in terms of corruption or black money? The problem is in most countries, let me take India as a case in point (as I live in India), there may be parallel everywhere though.

    Secondly, heard about few of the World Cup T20 matches were fixed. Vijay Mallya haggling with banks after eating thousands of corers for settlement. On top of this haggling RBI governor stating – Releasing defaulter names can ‘chill business activity’. We are fighting with each other on who should or must win, who is in your or my dream team and here the whole economy is at the ransom of those who are so powerful and mighty and yet in so much debt (and defaulted on debt) that if their names are made public economy of country will be standstill! At the same time, it is beyond doubt that those who have defaulted have a lot of money stocked in tax heavens. Otherwise how come Dr Vijay Mallya say that he can pay 4000 Cr in coming days. Why didnt he pay this amount before KFA becoming defunct?

    It is not just about one man. It is about those thousands who have stocked money and poor people of their country are dieing of hunger or more recently of thurst (In Maharashtra India) or are jobless. Once again quoting – Mr Rajan governor of Reserve Bank of India Panama Papers: Dangerous to question the legitimacy of wealth! Seriously! If people have legitimate wealth why would they hide it in tax heaven? Well, its likely that the answer will be – according to xyz legal framework created by (many of the corrupt politicians as the law maker) the then Govt it is legitimate to under Liberalized Remittance Scheme to put your money out of the country.

    It is like 1. making rules for your own and close clouts convenience and 2. than hiding behind the same to make your ill gotten  money the garb of legitimacy.

    FarmerIn all these – we are trending on twitter about local teams matches as hashtags! Forget that, we are not even considering that people and their cattle are thrusty but we are enjoying the tamasha of IPL where a lot of water is going in drain. Again, what is the argument? Maharashtra Govt may lose crores of rupees if matches are moved out of state. What is the probability and assurance that Govt will use the revenue generated by IPL for 1. prevention that is providing water to drought hit areas and 2. correction that is taking steps so that in future we do not face drought like situation.

    Governments (in effect rulers) earn most in the tragedies of citizen – be it flood in UP or earth quack in J&K or drought in Orisa or Maharashtra even floods! We’ll forget all the natural or man-made calamities and go back to our TV set or stadium and start shouting – six, or Kohli or slogan of a team. On parallel worldwide – for IPL in India, we’ve soccer in the Europe, NBA, NFL in USA and so on!

    This time the shouts of KILL are changed that is it. This time rules don’t ask us to eat cake if there is no bread, they show us the revenue generated in Govt tax collection. But problem remains – Forget terrorist! who knows the french revolution this time may explode the whole world?

    Image 1 source – http://famouswonders.com/wp-content/uploads/2011/12/Depiction-of-Gladiator-games-by-Jean-Leon_Gerome_Pollice_Verso-400.jpg

    Note – Author referred to RBI Governor’s statements, but believes the rot in the system is political & crony capitalistic.

  • Free market, corporate espionage & Government







    What is free market? A very straightforward definition of free market is – a market system where prices of goods and services are set freely by consent of sellers and consumers.

    In very simple words – I have an apartment and want to sell it – I quote (asking rate) price of USD 100,000. If a buyer or buyers are willing to buy the apartment at my asking rate that can be put as the market rate for similar kind of apartments in that given area. In the same simple language if no one comes forward to buy the apartment at USD 100,000 I may decide to reduce price to say USD 80,000. So on and so forth. The logic can work in reverse direction as well If there are more than one buyer I may increase my asking rate to sat USD 125,000.

    Demand Supply economicsThis concept of free market introduces a very interesting and important Basic Economics principle of “Demand and Supply”. If demand is more compared to supply prices may go up and vice versa.

    However, I have been asking a question to myself and have this to many educated economists or free market experts. Have you ever questioned the same logic of demand supply and free market in scenario of Mumbai reality? Have you not wondered about hoarding? How often the free market is really a free market?

    I have been searching for an apartment for last couple of months. In fact since 2008 I am hearing that Mumbai housing prices will be under pressure. In 2009-2010 when economy worldwide was struggling it was heard that the housing bubble of Mumbai will burst. Did it happen? I have my doubts. Recently, I received a call from a firm regarding buying a flat (apartment) in some areas in Mumbai. I – instead of responding to the questions – asked the caller –

    1. Tell me how many projects in Mumbai are stalled by construction companies because of lack of funds?
    2. How many projects have been almost complete but have unsold apartments?
    3. How many projects are rescheduled for possession date/month/year?
    4. How many properties are unsold?

    The caller responded with a number in lacs of sq ft. I could not hear the answer properly but that turns out to be almost (perhaps more than) 100,000 apartment in Mumbai. [Please do not quote it has a accurate statistic it was an approximation of the caller]

    Are we really talking about free market? Or is it really a created bubble of price.

    These questions roll on to the question of leaking Govt. In free market we speak about Government’s role of regulation. Have you heard of crony capitalism or the recent corporate espionage case in India. In one online news it was stated that many CEOs say that there is nothing new with corporate espionage. The article was published in Business Standard but that has been removed by the company now! Check the screenshots attached.

    I rememberr this Hindi idiom when Govt is not functioning or driven by the private businesses instead of public good.

    जब बागड़ ही बाग खाने लगे तो बगिया का क्या होगा?

    Addendum – The article is up again (as of 17th March) http://www.business-standard.com/article/companies/corporate-espionage-is-not-new-to-india-inc-say-ceos-115022000432_1.html

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    Source

    1. Demand Supply Curve – Investopedia
    2. Image 2 to 5 from Business Standard Google Cache screenshot. Original article not available on the link Image 4

  • Moral markets!







    Do markets have morals? When I read Mr Rajeev Mantri’s article “The morality of markets” (Link) in the Livemint, I asked this simple question to myself.

    Various things came to my mind – i. financial meltdown(s) there are numerous examples of past; namesake recent one in 2008 ii. real estate bubble (again namesake – Mumbai, I have read of similar bubble in China) iii. stock market speculations (working on scrips – I think in India markets traders call it scrip चलाना) iv. crony capitalism*. All these thought made me think the title of the article itself is an oxymoron.

    I am not against free market economy, I am neither a leftist or socialist. When it comes to economics (and politics) I prefer to take the middle path. Just to give you a perspective on why I am not completely agreeing to the point of view of Mr Mantri, watch the following video (reference – my Oct 2013 blog – The Price of Inequality) –

    [youtube=http://www.youtube.com/watch?v=QPKKQnijnsM]

    Capitalism has its own’s problems, and morality is questioned more often in those economies – be it environmental damages, besides few points I raised above. I believe we should not assume development that happened in the US/Europe as the only way to grow and to prosperity. In fact, we have written records of prosperous India even before anyone knew of USA. We have history of Utopia – Ram rajya. How was it achieved? Do not you think we should try to study that as well? There are more ways than the Left and Right approach we take.

    Coming back to the article of Mr Mantri – he concludes with India having billions of dreams. I do not doubt but here my difference with our own culture comes as a stumbling block. I do not appreciate the Caste divide and therefore disagree with Mr Mantri there – there seems not to be many diverse dreams. For ages we stifled dreams by asking kids to follow a craft or business of his family caste system of old days. These things are bringing me to some circular logic – where I suggest to study old Indian economics and refute social Caste system. What is circular logic? Listen to this song you would understand – (apologies those who dont understand Hindi, it is in Hindi) –

    [youtube=https://www.youtube.com/watch?v=mchDikR-AAw]

    paisa kamane ke liye fir paisa chahiye.

    Paisa kamane ke liye fir paisa chahiye – Golmaal hai bhai sab golmaal hai…

    An English translation of this song in some future blog.

    Note – * Crony Capitalism – “Gas wars” a recent book in controversies is in my reading list.

  • Indian Elections – Criminals in politics






    When Anna said once – “I don’t agree to party politics.” I didn’t understand that. During election days I was being very hopeful on good candidates from the opposition parties and hoping they would make it one sided whitewash of ruling parties. Unfortunately I was too optimistic about Indian political system. There are many tainted candidates from all parties who have been in power for so many years. Just to give you a perspective

    Criminals in Election

    Source – ADR report first 6 phases Link

    Note when my friend Vaibhav called to suggest write on elections I said no. He suggested don’t write favoring any party. So this suggestion boils down to what Anna Hazare said. A good way to make Indian political system accountable is voting a non criminal, non corrupt and good candidate at each constituency. Then forget he/she is from which party.

    This will eventually force everyone to put forth better candidates – educated and worth voting for.

  • Indian Elections – Divided we stand Together!






    You should not be surprised when Economists (all educated – PhDs from the USA) are not looking at these expenses; …they are saying that this is an inflow of money from Swiss banks so this is boosting Indian economy! Markets are anyways touching high almost every second day [Pun Intended].

    One of my friends – Vaibhav – called me last week. He said someone (Lets call him Ravi) came canvassing for a political party to him. Viabhav asked me if I can write something on Indian Politics! I plainly rejected saying my blogs relate to Business and Spirituality I wont write on politics.

    Economist'sHe further persuaded me, said- (Vaibhav speaks) let me give you my example, I said to Ravi – I am supporting who will form Govt! Ravi told me “good, are you sure you support criminals in politics, do you find corruption as chalta hai!…” Vaibhav said “no!” Ravi – than what is your take? Will you vote for corruption, criminals!”

    Vaibhav continued over phone “Pravin, it made me think. I shall vote for what I think is right even if that person loses election. Why dont you write?” I still said – no to political blog, I am favoring a better India, not any political party. Everyone must have their plans for a better India. Every party has different priority, we should respect each one. Vaibhav said do not write in favor of any party per se, ask people to vote for what they feel as right not necessarily for any party.

    Today I voted, so thought that I should speak my mind out.

    Earlier I have written on various topics closely related to governments, economy and corruptions. All these include crony capitalism as well (perhaps subtly). How can these big parties invest so much on election? Who funds them and what is the part in the flesh (of these invisible hands) in future policy making? According to news the Ad expense itself is in Crs ref Hindustan Times News! Forget about ground activities such as rallies, printing of leaflets and air travel of netas (buying votes by cash/liquor) etc. You should not be surprised when Economists (all educated – PhDs from the USA) are not looking at these expenses; perhaps they are saying that this is an inflow of money from Swiss banks so this is boosting Indian economy! Markets are anyways touching high almost every second day [Pun Intended].

    What I see in the current Indian political system is – lack of effective opposition. It is evident that the government also realized it. The UPA government has talked about everything except Janlokpal bill in 2011. Passed a weak bill (just to garner votes in 2013 state election & general election now). If we look at 2011 at various occasions Govt spoken to malign those who want to stand against corruption. The list includes – Anna Hazare, Kiran Bedi, Arvind Kejriwal (his wife) and Sri Sri.

    It has been observed that CBI can VERY efficiently work against those who can be threats to Govt. but CBI FAILS miserably to Find facts, File cases and Finish the proceeding against any political parties. It simply proves the current system does not work. I asked myself few questions about two years back – Will Mr Raja contest next election? Will Mr Sibal contest? Mr Digvijay Singh had been finishing his 10 years “Sanyas” after a comprehensive (Bijli, Sadak, Pani) MP Defeat, would he contest next Lok Sabha elections? All are answered now.

    Corruption has become talk of the history. No one speaks as passionately against corruption as we – citizen of India – voiced in 2011. The reason is simple – we are divided by political parties – we all want things to change, we do not want to change our narrow focus of political affiliation!