Pristine Glory!

Pristine Glory!


The time has come for minnows to prove the case for whales. The case in point being the old game of “divide and rule” being taken out for a new turn in the sun. This exercise may suit the whale and the minnow but will probably jeopardise the future of many a mid-sized carp! Otherwise, the audacity of Kosovo, just 10, 887 square kilometres of land-locked territory, would not be as significant as it is. Kosovo is also dirt poor by European standards, with a population of just 2.2 million, and a sweet sounding capital called Pristina. Since 1999, Kosovo has been under UN administration and NATO protection, following on from a couple of years of alleged persecution of its Albanian Muslim populace by brutal ethnic-cleaning Serb overmasters.

But, by the time the paint dries, this unilateral declaration of independence of Kosovo on February 17th 2008 may end up owing a great deal to years of self-fulfilling public relations and media overkill. Because, under the UN umbrella, when the world got a chance to sift through the evidence, no more than a couple or three thousand shallow graves came to light; not exactly genocide proportion attrition during two or more years of “civil war”.

The logic being advanced by America to justify its support, may be predictably overblown; even reminiscent of the outright falsehood of the infamous Weapons of Mass Destruction (WMD) argument applied to beleaguered Iraq. But even this would begin to make sense if the liberation of Kosovo from Serbia offered a strategic gain on par with control over the oil fields of Iraq.

But the gains in Kosovo seem more diffuse and political in nature. One objective on America’s part may be to poke one in the eye of erstwhile overlord Russia and put the stump of the USSR in her 21st century place. Another may be to ensure the permanence of its geographical perch in the Balkans via an invitation in perpetuity from Kosovo. Or is a free Kosovo a form of American atonement, a kind of back-handed apology to Muslims, very much the enemy elsewhere, in a tiny, laboratory experiment sized place, on the wrong side of Europe?

But what is India thinking? Because she has chosen to duck the recognition question and play for more time. With her large Muslim population, second only to Indonesia, India, may be loathe to condemn the unilateral breakaway in no uncertain terms. On the other hand, the government might be fearful of upsetting Indian Muslims by not finding for Kosovo. But the UPA government seems equally afraid of upholding the principle with an eye on restive, Muslim majority Kashmir. And one fear probably outweighs another because otherwise India would have liked to have agreed with America.

Meanwhile, independent Kosovo has been quick to declare itself moderate, eschewing jihadi violence and any truck with terrorists. This has already garnered recognition from some 21 countries for her.

But, even though Kosovo’s survival in her independence is a foregone conclusion, thanks to her powerful friends, India still needs to raise an eyebrow in its own best interests. Let us recognise America and her best friends have moved on from unilateral invasions to supporting, if not engineering, unilateral secession.

To Indian contemporary history buffs, it brings back the spectre of balkanisation in the early days after the British finally quit India, leaving us to amalgamate 565 nominally independent princely states into the Indian Union. We succeeded in this, thanks to Sardar Patel and VP Menon, but, since we know where the shoe pinches, we should have denounced secessionism in Kosovo; also since we have excellent relations with Yugoslavia/Serbia from the Nehru-Nasser-Tito days of early Non-Alignment.

Further, let us note that support for Kosovo is coming, not just from the US and the Western Alliance, pushing their own neo-colonial agenda, but also from the breakaway Tamils of Jaffna in our immediate vicinity, and the republican Chinese in Taiwan.

The question now is, who’s next on the “credible” unilateral path? Unhappily for us mid-size carp, if it is possible to secure independence with the support of powerful friends from half a world away in one instance, it will be equally possible in another.

(700 words)

By Gautam Mukherjee
Thursday, 28th February 2008

Also published in The Sunday Pioneer on 2nd March 2008 as "What Kosovo? It's Serbia" in the AGENDA Section DIALOGUE column www.dailypioneer.com

Karma Yogi Krishna Kumar Birla

Brushes With History An Autobiography
Krishna Kumar Birla.
Hardback.Rs. 650/-
Published by Penguin Viking

BOOK REVIEW

Karma Yogi Krishna Kumar

Industrial Titan Krishna Kumar Birla’s autobiography, released in 2007, in his 89th year, evokes a deep respect for the author, born on Armistice Day, the 11th of November 1918. There must have been something intrinsically gentle and cultured about the day that heralded the end of WWI.

“KK’s” memoir is imbued with a towering humility and sense of discipline which strikes one as all the more impressive in the context of the House of Birla being an inextricably interwoven part of the success of the Indian independence struggle and the formative evolution of our young nation state.

But for such a significant life, spent on cordial terms with eminent men and women, in business, industry, politics, spirituality and the arts, “KK” demonstrates, via simply narrated anecdotes supported by admirably archived correspondence, that it is not easy for anyone to advance his agenda; not even if one is a Birla scion and born to taking risks.

The bulk of KK’s distinguished industrial career unfolded in an era when a: “fair mix of capitalism,” functioned, it is true, but, “under the garb of socialism, in the brew called the mixed economy, which Panditji prescribed for India”. To navigate such heady ideological waters pulling distinctly Left, and to do so successfully, was, in itself, no mean achievement. But to thrive in such a restrictive policy environment, full of licences, permits, tariff barriers, much higher taxation, militant trade unions, infinitely slower GDP growth, quotas, intrusive inspections, and a general suspicion of industry and business, as KK did, was indeed a formidable achievement.

KK isn’t shy about describing his intense public relations gambits, his copious petitioning and lobbying efforts, conducted personally, to keep the all powerful politicians and bureaucrats on his right side. He implies that this is the real work that falls to the head of business houses. The trials and tribulations he encounters in the process, with occasional bouts of harassment at the hand of inimical authority, particularly when there are changes in the political wind, reveal KK’s tenacity of purpose and steadiness of resolve. Through all this, KK comes across as a man who has earned his place in the sun.

The proof of the efficacy of KK’s leadership is in the strength and stature of almost every industrial venture he established, supervised, nursed or nurtured, beginning decades ago. They have all grown manifold under his ministrations. Not only this, but KK managed to catalyse and guide his thicket of industries and businesses in various fields ranging from textiles, heavy machinery, fertilizers and the media, without ruffling the sensibilities of his deeply conservative immediate and extended family, his tradition loving community of Maheshwari Vaishyas, his management or labour forces, or indeed the political and bureaucratic authorities he had to work with in various parts of the country.

In addition, KK’s abiding commitment to the nurturing of the Birla family educational institutions, such as a large number of schools and famed engineering college BITS, Pilani, is deep and enduring. The beautiful Birla temples that KK caused to be built or improved, in Kolkata and elsewhere, reflect on the family’s deep religiosity. The well known Birla specialised hospitals and community relief programmes in times of natural calamity and drought, not just in his native Rajasthan, underscore the broader dimensions of the House of Birla’s social commitment.

It is also evident that KK’s guiding principles are infused with the spirit and tonality of trusteeship in his various endeavours including his terms as a Rajya Sabha MP. Trusteeship, as a concept, was very close to the Mahatma’s heart. It is therefore most heart-warming to see that it has been given great succour by both the great foundation-building business houses of the Birlas and the Tatas—not just in the first flush before and just after independence, but in an enduring manner, till the present day.

In acknowledgement of this and other similarities of approach, KK makes several references to serving on trade bodies and committees with his senior, J.R.D. Tata. The difference in ages between JRD and KK has made it possible for KK to witness the surge in India’s economic development since liberalisation in 1991 and the exponential growth of the Birla empire alongside. He has also had the good fortune to see and record with pride the competence of his succeeding generations, his daughters, their eminent industrialist husbands and so on.

But there is not a single boastful or smug moment in this book rich with impressions, sketches and vignettes of various eminent personalities. He dwells at length on his warm relationship with the Nehru family, from Jawaharlal Nehru to Sonia Gandhi, illustrated perhaps by the fact that she has also written a foreword to this autobiography.

Is there a defining statement that lays bare the animating spirit of Krishna Kumar Birla? Yes there is. It is when he writes that he declined to receive the Padma Vibhushan because it had been conferred earlier on his father Ghanshyam Das Birla. Is there another? Yes. It is KK’s surprising capacity to endure the foibles of politicians in his desire to participate in the political arena.

(850 words)

By Gautam Mukherjee
Sunday 24th February 2008

Also published in The Sunday Pioneer on 9th March 2008 in the BOOKS section as "From socialism to capitalism" www.dailypioneer.com

Pawar, Badshah, Maa Ki, Dhani Dhoni, Bhajji and Friends

Pawar, Badshah, Maa Ki, Dhani Dhoni, Bhajji and friends


There’s enough stardust, lucre and pizazz in the BCCI begotten launch of the Indian Premier League (IPL) to light up the International Space Station—let alone the night matches the League plans to hold. How? Go, get your black satin top-hat, your silver-knobbed ebony cane, your cape. Strike a pose, stand firm, and yell: Hey Presto Alacazam! No? Alright, substitute the Maratha-strong-man-equivalent of Gili Gili Bicchhi, and you’ll have yourself an instant procession of Badshahs, glamour pusses, platinum-plated glitz barons, moustaches, beards and mind-its.

Be pleased to meet the brand new owners of eight city based IPL teams. There they are, still gasping from what they had to cough up for the privilege. But be undaunted. Add in Pawar-packed TV rights, tie-ons and try-ons, and then, gilied or not, there’s 7,000 more of those crore things you need to find a new war chest for.

Now call in Muhammad Ali, the “sting like a bee” boxing heavyweight champion of the world, who’s known all along that “your hands can’t hit what your eyes can’t see,” as patron-in-chief. He’ll teach you how to upstage pundit, punter and any maa ki puttar alive. It’s Ali in the know-how. Muhammad’s been there, predicting which round he’d kayo his opponent in. He got it right 17 times in a row- a veritable match-fixing bookies’ nightmare, but think of the certainty!

Meanwhile, lay on more of the Pawar-play. Set Andrew Wildblood Houdini of international sport management firm IMG/TWI to work. Have him unlock them jars of brand value, polish up those Alladin brand monetising lamps, get him moving around to spark a controversy here and rub up a spot of frisson there. Package the whole thing in the pheromones of youth, talent, promise and satellite TV exposure. You’ll see, whether Bob’s your uncle or not, a humdinger of a show under the arc lights, not just once or twice, but night after night.

Back on the tour bus you’ve got interesting people too. There are actors who are owners, the aforementioned platinum plated ones, moustaches, beards, mind-its, but also players who are dream merchants in their own right, absolute saudagar khiladis; and damned if you can tell them apart for the excitement! Houdini Wildblood knows his business. Pawar picked him because he too knows his. Wildblood got Chennai to pay the biggest bucks for a young wicket keeper cum batsman cum fielder who won the first Twenty Overs World Cup just the other day. Just like that he did it--in between super-biking around Jharkhand and thinking up what-else-cum-what he can become, especially on the advertisement circuit.

But since a little comic relief amongst competence never hurts--the next prize bull in white lip-gloss, is the most successful maa ki since Darwin demystified species homo-sapiens with evolutionary and scientific highlights. Additionally, you’ve got plenty of other shiny apples in the eight-city barrels. How’s about one fast, correction, fastest, young Brahmin bowler since Bharat turned into India? Or a lovable, motor-mouth spinning bhajji on Bondi or any other beach? You can also take your pick from an entire drawerful of oldies but goodies, in black, brown, blond and variegated. And in the middle of all this excitement, you probably can’t help feeling sorry for the rival Indian Cricket League (ICL), made up almost exclusively, of retirees, inclusive of Paaji, Inzyji, Laraji, Yanaji, and most of all for the poorly penetrative Zee-ji.

So much for cricket, but before too much red and white flows by the banks of the Baramati, one might spare a thought for the many me-too and wannabe birds beyond sport who might set about unlocking value, as if it were as simple as taking your clothes off. There they’ll be, branding away in a way that has nothing to do with tattoo parlours, monetising themselves, even bits of themselves, such as Mayawati’s wagging finger, Prakash Karat’s frown, Amitabh Bachchan’s growl, Bipasha Basu’s err best wishes.

Indeed, the era of unlocking value may have come to overtake Lalu’s Indian Railway presentations to Harvard students and Ambani-Bharti type megadreams. And for this, let the historical record show, we have the Baron of Baramati and a game involving bats, balls, wickets and sundry logos, to thank.

(700 words)

By Gautam Mukherjee
Friday 22nd February 2008
Also published in The Sunday Pioneer in the AGENDA section DIALOGUE "Money, money, money..." on Sunday 24th February 2008 www.dailypioneer.com

Devil's Radio

Devil’s Radio


Gossip, they say, is the Devil’s radio--so what does that make government propaganda? Going into the last few days before the UPA government submits its last full budget on February 29th, this leap year, the overall feeling is one of economic slowdown and drift. This budget, of course, will be dominated by considerations of the general elections coming up, perhaps later in 2008, or, on schedule, in 2009. Meanwhile, industrial growth has slowed, high-interest credit off-take is down, sale of white goods, automobiles, housing, has slackened, business returns have moderated, foreign investment is pausing and the stock market is listless.

But you wouldn’t think so, to listen to the official interpretation of the situation. Fiscal 2008, it is true, is likely to close with at least 8.5 per cent growth of GDP despite progressively slowing quarterly results, and the prime minister himself assures us we can look forward to another year of 9 per cent growth in 2009. But, while this may be true enough and is commendable in itself, is it sufficient, given the relatively modest overall size of our economy, to tackle the burdens it is forced to carry year after year?

The answer is probably no, but you can’t get this government, probably any Indian government in power, with its democratic and populist pressures, to admit to it. There is a good explanation for this outlined by psychologist Annie Jia: “What happens when your behaviour and your beliefs don’t match up,” she asks, and goes on to say, “you can’t change what actually happens to clear up the cognitive dissonance, but memories and opinions are infinitely malleable”. So our government, run by learned denizens who are all too human, may well be busy spinning their memories and opinions into the economic data available to them.

The pity however lies in the fact that the more the economy slows owing to avoidable government policies that curb growth to contain inflation; the more onerous do the burden of subsidies, sops and badly executed government relief programmes become. It must be hellish difficult for the finance minister to find the funds for all the populist programmes being demanded by the constituents of the UPA at this time. Ironically, this cannot be lost on the phalanx of eminent economists currently at the helm including the prime minister, the finance minister, the reserve bank governor and the deputy chairman of the planning commission. But, singly and collectively, they seem tired and dispirited when it comes to reform or fiscal probity. Perhaps they are worn down, in this fourth year of their five year term, by the effort of running a coalition with Left support. The finance minister might yet pull a rabbit or two out of his budgetary hat, but it will be hard to be magical given hardly any room to manoeuvre.

Look at the facts: The Economist of February 16, 2008, quotes a recent International Monetary Fund Report (IMF) to contrast the economic health of the two Asian giants China and India, though one is infinitely better placed than the other. China “has the best fiscal position of any big country”, giving her plenty of room “to cushion the economy if demand suddenly falls”, whilst India, “has one of the worst fiscal positions in the world”. China too has a vulnerability, being highly export led; but she is in robust financial health to defend her economy, whilst India, despite being domestic consumption based, is not.
China’s public debt stands at 17 per cent of GDP while India’s stands at 75 per cent. This is comparable to the Organisation for Economic Co-operation and Development (OECD) average for public debt at 77 per cent, if that is some consolation. China has a budget deficit of just 1 per cent of a much bigger economy than ours, which could morph into a surplus of 3 per cent if you add back the profits of their state owned firms. India, conversely, has an actual budget deficit of 8 per cent, though the government says it is a mere 3.3 per cent projected up to March 31st, 2008, down from 6.5 per cent in 2001-02. Our union government, however, does not add the state government deficits and various off-budget items such as the oil bonds to help offset PSU petroleum company losses. Nor does it add on the losses of decrepit state electricity boards. These are intractable haemorrhages that are getting more and more difficult to carry but happen to be political hot potatoes.

Still, you can’t fault the IMF for telling it like it is, and inevitably, suggesting various fiscal remedies that they know will fall on politically deaf ears. However, it does set up a certain Caveat Emptor (Buyer Beware) quality to the India Growth Story underpinned by the positive of our robust democracy. Conversely, China may be doing very well economically but politically it is opaque and authoritarian and that is potentially unstable. The world can therefore take six of India and half a dozen of China and they actually tend to!

But because it is politically hazardous to tackle many of the long standing issues that burden and drain the Indian economy; it is all the more important for the government to do everything in its power to stimulate growth everywhere they can. The odd thing is, knowing what they know, they still don’t do this! But if we could grow faster, strongly aided and abetted by the government, we too could develop an economic cushion, eventually, of the kind that China enjoys today. This, particularly, if we hold the line for a coming decade of high single digit or even double digit growth.

Removing infrastructure bottlenecks will prove crucial, as will sustained growth of agriculture and related value addition in the hinterland. We must allow more competition and let in more foreign investment and technology. Of course, a classical economist’s approach would have us do away with subsidies and sops but this would not be fair in a country like ours. Nor can we stamp out the very real threats posed by breakaway movements and internal insurgency if we promote an oligarchic model of growth. But, having said this, we do need to become more efficient in our governance. Implementation, as always, has been the Indian Achilles' Heel.

(1,050 words)

By Gautam Mukherjee
Thursday 21st February 2008

Also published in The Pioneer www.dailypioneer.com as "Pinch of mirchi on devil's radio" on Wednesday 27th February 2008 in the Leader Edit slot

Waive the Hyde Act

Waive the Hyde Act


US Secretary of State Rice’s recent assertion that the 123 Agreement signed with India will certainly be subject to their Hyde Act, flies in the face of the assurances given by the UPA Government that it would not. Coming in the midst of our negotiations with the International Atomic Energy Authority (IAEA), and in the face of considerable learned debate in India, this should give us pause.

The strong objections to the nuclear deal spelt out by the Left , others in the UPA, the Opposition NDA and some commentators, seem justified after all. In context, the constant “now or never” urgings from the US Ambassador to India to accept the agreement, as is, and without demur, because India is unlikely to be offered a better deal in future, is not convincing. US Undersecretary Nicholas Burns also points out that a general election is looming large and further delay will render US legislative ratification of the deal impossible.

Meanwhile, Ambassador Mulford glosses over the difficulties occasioned by the subordination of the 123 Agreement to the Hyde Act. He points out a Machiavellian subterfuge. He says that even though the US is legally bound to cease nuclear cooperation if any provision of the Hyde Act is breached, India could still transact with others in the forty-five member Nuclear Suppliers Group (NSG). In the real world, this suggestion seems far-fetched, when these very countries, France, Russia, China, Australia, are on record that they are unable to go ahead with any operational cooperation with India in nuclear or “dual-use” technology, without America’s explicit nod.

But is the snail’s pace just a matter of India going slow? If so, why have the parleys with the IAEA gone into five rounds? The Indian negotiators, it appears, are having a difficult time on the crucial issue of guaranteed and uninterrupted nuclear fuel supplies. The United States has overweening influence over the IAEA, but is obviously not using it to get a rubber stamping done in India’s favour. So how can India afford to gloss over the imperative of uninterrupted nuclear fuel supplies? We’ve been there before with the Tarapur facility starved of fuel and parts with the unilateral abrogation of the 1963 Indo-US bilateral Agreement straight after we carried out our first nuclear tests in 1974. They didn’t even wait to enact replacement legislation which came only in 1978 in the form of the Nuclear Non-proliferation Act (NNPA).

In 2008, there is indeed a de facto acceptance of India as a nuclear weapons state. But this is not tantamount to parity. The reasons for this are manifold, and not all of them are limited to India. Nevertheless, this may be the root problem. India has been granted an “exceptional” status and gains marks for non-proliferation. But she still can’t be trusted to conduct herself unsupervised!

India may have negotiated a separation of her civil and military nuclear programmes, both existing and projected, with only the civil ones subject to IAEA inspection. But there is a great deal being left to future interpretation. And the main sticking point always boils down to the threat of fuel supplies, technology, spares and so forth being cut off. There is a sword of Damocles quality to the fine print and ongoing negotiations that suggests loss of sovereignty, being forced to participate in future US hegemony, and curbs on our nuclear weapons programme by the back door.

So what is the way out? Who will cut the Gordian knot? Because, despite all the thunder and lightning, a nuclear deal with the US and friends, will probably be concluded in the end. This likelihood is because India has been identified as a strategic and geo-political necessity in the global balance of power. Perhaps, in the light of this compulsion of realpolitik, the time has come for India to negotiate harder, to “negotiate without fear”, and negotiate, taking the greatest care not to compromise our future freedom of action and manoeuvre for the sake of “honorary” gains.

At home, we must strive for unanimous all-party backing to the final form this nuclear cooperation takes. Foreign Minister Pranab Mukherjee is right to want to end our “isolation”, but inclusion should not be bought at the price of a one-sided commercial exploitation compounded by loss of sovereignty.

India needs to be truly treated as an exception to the rule. But for this to happen, the United States has to ensure an equitable safeguards agreement at the IAEA, an unconditional waiver at the NSG and follow through with a special waiver from the provisions of the Hyde Act as well. There may not be enough time to do this in the remaining tenure of the present US government. But, the new US government, post November 2008, could, theoretically speaking, do so.

If India is needed by the international order for its merits and geo-political advantages, she should be welcomed by treaties that do not seek to subjugate her with neo-imperialism, discrimination and neo-colonialism. If we cannot have a proper nuclear deal that guarantees an honourable future, then it may be best to take recourse to our own R&D and the considerable reserves of Thorium we possess. It will take us years longer, but we are well used to it.

(875 words)
By Gautam Mukherjee
Sunday 17th February 2008

Forward Motion

Forward Motion


To think of paying for a mistake or a wrong doing with penance is the norm. I suppose if it’s a criminal grade act, being punished and made to suffer is entirely appropriate--though you wouldn’t think so if you count the numbers of such persons swaggering about the place.

But supposing we do own up--we say sorry. We humble ourselves. We do “kar seva” at mosque, temple, church, gurdwara or Witch’s Coven. We make, or try to make, sincere amends. We strain to be sensitive this time around and lean forward with eagerness to understand the wronged one’s point of view. It is hellish uncomfortable and abasing to do all this, and we long to be shot of it as we struggle with the rising bile. But supposing we ignore this personal discomfort and fix our minds on the intended outcome, fast forwarding to the part when the wronged party is smiling approvingly and we’re over the hump and off the hook.

Yes but we should be so lucky! Most of the time, this trying to put things right comes horribly unstuck. You begin to understand the brigade that says never apologise, never beg, with some degree of fervour and passion. Because, far from appreciating your haloed efforts, the aggrieved party seems catalysed in the wrong direction, like dodgem cars jumping their moorings in the direction of pensioners, not feeling good at all, but reliving the hurt and humiliation, amplified and exaggerated far beyond anything you remember inflicting. And you, in your misguided zeal to set things right, start to see the whole ball of twine unravelling into an unintended mess, gorier and crazier than the first time around. So much for imagining that the proffered apology would be accepted with good grace!

So the thing to do is put on a burst of forward motion and help the wronged--in a generic sense, via their successors, via intended consequences. By putting an African American in the White House for example, or a Woman, even a White one. Nearer home, elevating a Dalit to the Chief Justiceship couldn’t be more poetically just. And watching the Supreme Court he runs make it possible for small traders to get off the pavement and back into their desealed shops is just too. Atonement works much better than apology. Ask any Aborigine.


(390 words)

By Gautam Mukherjee
Friday 15th February 2008

The Opposite of Shame

The Opposite of Shame

Is India psychologically ready to join the league of leading nations? Or have years of pressing her nose against the glass, from the outside looking in, stunted her self-image irrevocably? Do we, as a nation, understand that the opposite of shame is not a parochial shamelessness, but perhaps an assessment of how and why we are viewed favourably by other countries. Divining this properly, says American psychologist Dr. Nando Pelusi, helps one feel a glow of pride. Ergo “shame” and “pride” are two sides of the same emotional coin. If we confuse the issue, with what Pelusi delightfully terms “neanderthink”, we could end up over-generalising and tarring everyone with the same brush.

Nevertheless, the conduct of Indian economic policy for example, with its hesitant, two-steps-forward-one-step-back gait, suggests that our policy course, no matter which government is in office, keeps flipping this shame and pride coin. Currently it might be shamed at being unable to contain inflation and the effects of a stronger rupee, and proud of achieving GDP growth rates of over 8.5 percent. But, in this heads-and-tails-game, our e-handlers can’t seem to decide how to curb inflation and keep growing at the same time. So we end up ashamed of this upwardly mobile inflation. We are also ashamed to grow when the poor have to pay more for food and the middle class have to fork out fatter EMIs.

But maybe we are missing the essential point and refusing to take a risk. Growth has a way of blowing away all obstacles in its path and provides opportunities and options that its absence does not. Let us note that the outside world has been attracted to India primarily for her growth story, her size of domestic market, her conversely low dependence on exports when all the rest of Asia is export driven, her considerable human resource, her relatively mature institutions, her judicial system, her vibrant democracy, her impressive electoral system. And this despite huge disparities between the haves and the have-nots.

But, even the most ardent Indophile must be exasperated at the pace of progress on the ground, the ponderous rate of implementation and the hesitation that marks every reform. Maybe we need to take a risk, but in a way described by comic actor Mel Brooks: “Risk means guessing at the outcome but never second guessing,”he said.

(390 words)

By Gautam Mukherjee
Tuesday 12th February 2008

Dreams that you dare to dream

Dreams that you dare to dream: the relevance of the Indian Stock Market

“Somewhere over the rainbow, skies are blue, and the dreams that you dare to dream really do come true,”

Lyman Frank Baum (1856-1919) in The Wizard of OZ

Upendra Kachru reveals in his recent book Extreme Turbulence: India at the Crossroads, (Harper Collins), that only one publicly traded private sector company in the 1970s “top ten”, based on market capitalisation, figures on his 2005 list. The sole survivor is Tata Steel, then at No.1 and in 2005, before its audacious Corus acquisition, at No. 7. Public sector navratnas such as ONGC, Indian Oil, SAIL, GAIL and BHEL were not traded at all in the 70s. Reliance Industries wasn’t on the first list either but is seen at No.1 in 2005.

This is not surprising when you acknowledge that the first dreamer of waking dreams about the Indian Stock Market, and the most successful of them all, was, in effect, Dhirubhai Ambani. When he first tapped it, you had to be rich and powerful in the first place to obtain bank financing. Dhirubhai turned to the general public instead to realise his vision. And with his mass market manoeuvres and daring innovations to attract shareholder wealth, a sea change in the reach and dynamics of our bourses came about. The phenomenon has since been referred to as the “cult of equity”.

It is a pity therefore, that even in 2008, only some 6% of India’s billion plus population, is in any manner or form associated with the stock market. But, there may be consolation in the fact that this figure has risen, from an even more pathetic less than 3%! Compare this with 48% or so of stock market participants in the US and you start to realise why their market capitalisation is at USD 23 trillion.

And yet, the goings on of the Indian stock market sustains two full time English TV channels and one prominent Hindi one. In addition, all our pink dailies and nearly every broadsheet, tabloid, magazine and general news TV channel, in several national languages, allocates a significant amount of time and space to the bourses on a daily basis.

Besides, percentages do not reveal as much as they conceal. It has already become an item of popular culture that Dhirubhai Ambani not only succeeded in attracting the investment of millions of ordinary investors, but, for the first time in the Indian experience, turned lakhs of them into millionaires; just like he said he would.

Ambani created investor confidence of unprecedented magnitude. The latest posthumous manifestation of the adoration his name evokes in the investor community albeit bolstered in 2008 by institutional investors, mutual funds, insurance companies and so on, was during the Reliance Power IPO last month. The flotation, by the late Dhirubhai’s younger son Anil, was a frenzied phenomenon. Anil, without taking anything away from his own considerable business acumen, wanted an impressive Rs. 11,700 crores, (about USD 3 billion), making it the biggest ever primary market issue in the history of the Indian Stock Market. But he received as much within a minute or two of gates open. By the time he pulled down the shutters, the over-subscription ran to a whopping Rs. 7.52 lakh crores or USD 188 billion! Compare this flood tide of money, raised in a jiffy, with the entire, and let it be said, enhanced, and unprecedented, foreign financial investment (FII) for the whole of 2007, which stood at some USD 17 billion.

And as India keeps growing her “real” economy at 8% plus rates year-on-year, and is expected to do so for the next decade or more, the capitalisation in the stock markets, which currently matches the gross domestic product (GDP) one is to one, at USD 1 trillion, is slated to double in the next five years.

Official India too, has over the last few years, been encouraging, by making investment in equity virtually Income Tax free except in the short term, defined as less than a year. But even then, it contents itself with a flat 10% on the profits realised.

Aggregating all these taxation related bells and whistles, the relentless increase in the number, style and substance of financial assets under management (AUM), backed by the great Indian domestic savings rate, one of the highest in the world, hovering at over 30%; it is only a matter of time before the stock market participation assumes centre stage. All we have to do, millions more of us, is dare to dream like the Ambanis.


(750 words)

By Gautam Mukherjee
Friday 01 February 2008

Also published in The Sunday Pioneer on 3rd February 2008 in AGENDA section DIALOGUE As "Helps us dream big".