Monday, July 28, 2014

The land of the Ghost.....

Slightly less than 50 years before (precisely 5 months short), a township that was bustling with activity, which had road, rail and sea transports went down to the fury of the nature. Dhanushkodi, the Ghost town, stands today as a land and not much ruins are left there for anyone to imagine what sort town it could have been. 

I travelled to the this place as part of our pilgrimage trip, but it was not easy for me to hide the apathy. If one could turn the clock and travel back in time, consider themselves as a person who loved in that town, he or she can possibly visualise the dreadful events that unfolded on that fateful day of 22-23 December of 1964.

This was the track that the passenger train was moving along, few kilometres away from its final destination. The remains of the track is still there to remind the future generation of how the train was consumed by the giant waves that turned it like a turtle.

The beach shows no signs of the township that existed 50 years back except for small ruins here and there. A small stretch of harbour road can be seen today which the local fishermen staying in a hamlet nearby use.

A dilapidated building that housed the post office and the railway station that existed at that time were only the symbols of human occupation that can be seen now.

It is unthinkable that how can the area is totally wiped out of everything that the township had before, the buildings, market places, temples etc. Eerie silence engulfs the area and one can hear the death cries of the people humming in their ears. If anyone recalls the history while visiting the place would definitely shed tears in sympathy for those unfortunate lives.

I saw a Sivalingam lying stranded in the beach. Did He remain the mute spectator for the destruction? possibly yes, as he was the destroyer, can feel proud of his act. Today he is lying there with no one worshipping him, with no shelter and rituals, expect the mentally retarded old man sitting nearby.

The sea lies quietly as if it knows nothing about the calamity that it has caused or is it repenting for what it did to the thousands of the people?

But one request to you. Please do not play with human lives for they worship you and depend  on you for their living.

Silence is not sacred....

No journalists, please: Narendra Modi's 'no media' policy may prove to be a mistake.

Silence is not sacred. I too feel that the policy to shun the media is not a good one to be adopted. But the fear of Modi's govt to shun the media is not unfounded. Today's media is looking for spicy snippets which they can blow up into a prime time news. They just don't care about spreading the details of the policy or programs, but what slipped out during the interface. They attribute motives and created sinister designs to what ever the politicians say. One such example is the reporting of the recent 'force feeding' incident. Yes, the incident is condemnable, no doubt. But invariably all the media whether the print or electronic, reported as 'force fed a Muslim during the fasting'. When the MP did that shameful act, neither was he aware that the person was a Muslim and fasting. But the fact, which the media came to know later, tied these two things and created a sensation by twisting the news as a Muslim was forcefully made to break his fast by thrusting the roti into his mouth. If media is going to indulge in such a 'violence' reporting, it is but natural for anybody to shun them. Now there is only one complaint that the Govt. is 'Media unfriendly'. It is better to have one complaint rather than having hundreds of concocted stories every day.

But after all Media also has to run their show. Where else they will go for juicy news? Naturally the deprived persons will cry.

We also have lived in an era whether there was no TV. We have had only a 15 minute news bulletins in the evening and we came to know the detailed NEWS only the next day in the print media. People lived during that period also... Hmmmmmm.

Wednesday, July 23, 2014

New model for MEGA project funding ... A suggestion from a layman... Pardon me for overindulgence....

The budget lays emphasis on PPP model and relies on it heavily to implement infrastructure projects. Govt., cannot fund all the projects for want of resources, and there is a need to look for viable alternatives. The PPP model has delivered in some areas and in some areas the fleecing of the users are being noticed. It is but natural for the Private model to place profits before philanthropy but it is a necessary evil. 

Modi has been pitching for inclusion of another P in this model i.e., 'People'. The P4 model would an all inclusive model and can bring about a different perspective to the whole infrastructure development. 

I had a dream of the different way of implementing this model. Only the financial wizards can explain whether it is feasible, economical, workable and all the others 'able's of this model, but it is really a wild thought. 

Some of the follies in the PPP model are: 

1) The infrastructure development goes into the hands of the Private with oversight by Public, but in many situations the implementation is fraught with delay or escalation or political wrangling due to change in policy makers etc.,

2) The BOT model started to squeeze the public by way of high user fees and make the fruits of the development not reachable to the low strata of the society

3) Only few of the top industrial houses get all the projects and thus we are moving the wealth mobilised from 'Many-to-few'.

4) Since only a few players are operating in this model, the corridors are power always knocked by them to get their favours done and in that process corruption becomes inevitable and in-built in the model. 

5) On the operational side, the PPP model gets financed by a consortium of banks, who have not much wherewithal for managing the financial details, including the risk management of such large financial arrangements. The absence of technical knowledge of the projects and risk management framework are the primary reasons for such a huge proportion of the NPAs in the banks. The accountability is lost and expertise is lacking.

can site many more inadequecies like the above , but my objective is not that. I am proposing a model that can have dedicated funding process, the all inclusive approach can be achieved, and spare the Govt from finding the resources in the budgetary allocation process.

I suggest to float a special purpose vehicle (SPV). Though this may not exactly a SPV, as it will be a continous process and can thus be called Special Purpose Bank (SPB). 

Govt can set up an Infrastructure Development and Investment Aid (INDIA) Bank to start with. The objective of this set up is to have a Big Bank that can meet the Tier I capital requirements to reach out to the other global banks. We have had IDBI, ICICI, IFCI, NABARD etc., to fund the industrial growth of the nation during the earlier five year plans. The INDIA Bank could be a similar bank, but with greater financial outlay, with focus on financing the infrastructure development activities. The bank can be set up with capital contributions from the nationalised and private banks, SBI, Govt and through IPO to the public. Assuming that the banks contribute on an average 3,000 Cr per bank (which is not a big amount considering the investment portfolio of these banks and by divesting some of the investments) you get about 1.00 lakh crores, Govt (Central and State)  chipping in matching amount and an IPO to ensure people participation, the capital contribution can exceed 2.00 lakh crores.

The capital of SBI as of Mar'14 is less than 750 crores and comparing to that the INDIA Bank will be a mammoth bank and can go to international market to borrow at competitive rates and start financing the infrastructure projects. The Central Govt, can expedite the projects completion as many projects can be started simultaneously and budgetary constraints and fiscal deficits etc, cannot be anymore restraining factors. Govt only need to define the policy and identify the areas for development. While the existing banks can concentrate on Large and SMEs, the MEGA project financing shall be through the INDIA Bank. This bank will be a 'too big to fail' establishment and thus can ensure stability of the financial sector. Unlike the earlier banks (IDBI, NABARD etc) this need not be a indirect bank engaging in refinancing activities only but can be a direct project financing bank. 

Wednesday, July 16, 2014

Friend or foe.

Is China a trusted ally or a Pickering enemy who often creates problems in the border, siding with Pak and thus posing problems for India.

With the BJP coming to power, the equation with China seems to be under different level. Personally I am not so comfortable with China (eventhough no one going to mind this) and I do not know why I developed this averse. Was it because when I was a child we tasted the bitterness of war in 1962 and the silver screen stars raised the pitches against china (definitely Nehru did not enthuse me at that time as I was only 6 years old at that time)? This apathy continues even today. Whenever I buy an electronic item, I first see where it was made. If it is 'Made in PRC', I detasted it immediately and keep it back. I prefer to buy one made in Malaysia or Korea or even Vietnam, but not one from China. But over the years 'Made in PRC' items only made it to the shelves in the stores and I have to swallow my ego to buy them. 

Is the new relationship a strategy for political solution or for economy push? Politically it will create a new world order and might force US to revise its stragey. Such a revision could well be good for India or it might push US to favor Pakistan more.

Another political advantage could be that it might well be a tool to control Pak from its skirmishes, adopting the tactics of 'mithra bedham'.

Economically, what, the new found relationship with China, will augur for India:

1) It will bring the Chinese industries into India along with its labourers. Which means we shall have more Chinese population in India. Some Indians may get to work in those industries but overall the invasion of Chinese population will start.

2) Chinese goods whether it is toys or electronic goods will start to hit the roadside stalls thus forcing the SMEs engaged in these kind of industries in India slowly into oblivion.

3) India will become a conduit route for moving into Pakistan or Srilanka and thus creating safety concerns.

4) It might distance India from Japan, a stable, reliable and economically stronger ally.

5) On the positive side there may be new routes and destinations to China for tourism lovers.

Anyway, there are only butterflies in my stomach over this new friendship. Dragon is not a really a pet...