Sliding Rupee

Up up goes the American dollar and down down goes all other currencies! A nation’s currency is a strong national identity, ask the British who said no to Euro, and fluctuation in its value captures public imagination and political attention, although many may not understand the economics of it .

The rupee downward slide over years has been a point of discussion and debate but not of concern as it did not pose a grave threat. The fall in rupee value from Rs. 74.56 per dollar in January 2022 to Rs. 77.43 per dollar on 13th May 2022, which accounts for 3.84% depreciation in rupee value seems to have got the media and public attention. Political blame game out there seems to have overlooked the ground reality that rupee slide is a reflection of the coupling of economies in the integrated global order. Currencies across the world have seen large erosion in their value.

Pandemic did make the policy makers opt for inward looking policies but the Ukraine war highlights the fact that world economy today in highly integrated and interdependent. Rising oil and commodity prices, particularly wheat, has strained import bills worldwide. India the third largest consumer and importer of oil has seen a doubling of oil bill from $ 62.2 billion( 2020-21) to $ 119.2 billion ( 2021-22). The upward movement of the interest rates in US market, which is seeing its worst inflation, has led to flight of financial institutions from emerging economies triggering a sharp outflow of dollar. Indian markets have seen a withdrawal of Rs. 1.5 lakh crores by foreign investors just in 2022. This demand-supply imbalance is the prime reason for the downfall of rupee.

Economic uncertainty across the world has made dollar the most favored asset to hold today. Hence the coming days will see further strengthening of the dollar, which will cause greater economic stress among economies. The slide will push fuel and commodity prices and cause a hole in our pockets. Any intervention of the RBI to check the rupee slide will only erode the forex reserve and not provide any lasting solution. We need to accept the reality that rupee will slide further and policy approach should focus on how to minimize its adverse impact. The falling rupee does make exports competitive and we must capitalize on it. There is also a need to curb non-essential imports. It is also time to review the fuel taxes as any further rise in fuel prices would build up the inflationary pressures.

Meri Awaaz Hi Pehachaan Hai…..

It is rare in the history of a nation we pause and feel a sense of loss cutting across generations. Today as the Nightingale of the Nation moves on, every Indian feels an emotional loss that cannot be put in words.

Very few legends symbolize India @ 75 journey as the legendary Lata. Her soulful music celebrated love, stirred the soul in search of the Almighty, touched our heart with patriotism! It is this emotional connect that the melody queen had with Indians that makes her a true Bharat Ratna.

Today, I and many realize what an integral part of our life she has been. The silence of morning became magical with her Allah Tero Naam or Easwar Satya Hai; the tribulations of our love was best captured in Lag ja gale or Mera Saya ; our maternal emotions stirred with Luka chuppi bahut hui or Chanda hai tu mera Suraj hai tu; the soul of the nation shook with Mere watan ke logo!

Lata Mangeshkar your voice and songs will last as long as human emotions exist. We will still cry, smile, celebrate life with your songs. Nightingale of India is immortal !

Hear Her Voice !

Patriarchal society is a reality world wide which years of so-called progress and liberal movements have failed to make a dent. We at home may have something to cheer sometimes, like the entry to a male dominated last frontier ( NDA), but our daily battles show there is a long way to win the war.

The vitrolic attack on women and her personal space seems to have become acceptable in today’s India. The virtual world has multiplied this. The Bulli Bai incident is a reflection of the society’s mentality where women are the easy target. The fact that the perpetrators are young and educated need to ring alarm bells. As a society we continue to fail to make our sons learn to treat our daughters with respect.

Judiciary which is vocal on many issues seems to have gone slow when it comes to women. It is mortifying that an actor is still scotfree and challenging law for involvement in a crime that everyone is aware. The lower court judgement letting the accused religious head scotfree is again an assault on women rights. It is humiliating that our courts are still discussing marital rape and in some cases denying the freedom of choice to women! Justice which is fundamental foundation for a humane society is a far cry for women.

Pandemic has impacted women the most- whether it is in terms of loss of jobs, work-life imbalance due to WFH and physical violence. Online education deprived many of our girls from access to education. As our world shrunk within the walls of our homes, women were pushed to the corner. Personal space, her feelings and needs were conveniently overlooked by the patriarchal world.

The irony of having just one women MP on the Parliamentary panel to evaluate rise in marriage age is a reflection of ground reality. Why are we not heard out when it is a decision pertaining to our lives ! Political leaders are aware of the impact of growing women voters swaying elections but are still unwilling to bring greater representation for women in politics. The attempt made by the grand old party in the upcoming UP elections to have a sizeable women candidates is welcome but their poor winning prospects make it a non starter. It is time that the lip service to women ends and all parties in this iconic year acknowledge that political representation for women has to be enhanced and translate their commitment to 33% reservation to reality.

Women are deprived on multiple fronts- social, economic and political. India@75 needs to move beyond sloganeering. The most powerful tool for change is Education. We need to have policies which incentivise girl students as they complete schooling and higher education. Implement equal inheritance rights for economic rights go a long way in providing social rights. Crimes against women must be taken up by fast-track courts and there is a need to have greater women power in police and judiciary. Political leadership must acknowledge the need to bring in greater women participation. Go ahead and pass the Women’s Reservation bill, there is no better way to celebrate Azaadi ka Amrit Mahotsav.

If we continue with this only man’s world be sure it will take us downhill as a society and nation. Hear her voice. It is cry for dignity, justice and respect. Ladki hoon lad sakti hoon must give way to ladki hoon kar sakti hoon!

Fake news triumphs!

The empty campus was a reflection of the emptiness most of us felt today. It was hard to believe that our own who we gave the best in terms of campus life had been the cause for that emptiness. The pain was there in everyone’s eyes, the sense of disbelief was shown on the faces and most of all the bitter reality of the generation which failed to decipher the truth amidst the plethora of misinformation shocked us!

I have always believed in the need for student community to be enlightened in terms of their rights and be the change agents, in the true spirit of my alma mater’s philosophy. It was heartening when we saw them take up causes for the larger good. Their success stories, big or small, made us realize the power of Education.

The pandemic challenged us, the teaching fraternity . But we took our classrooms into our students houses, we the digital migrants learnt just to ensure our students learning did not stop and we succeeded. The experience also showed us that real teaching-learning needed us to get back to classrooms and the students needed the vibrant campus life as that molded their personality. We also realized the limitations of the online assessment methods in terms of fairness.

Today, the rumour mongering fuelled by the social media and irresponsible so-called student leaders was a tsunami that blew us all away! The open communication network on our campus was blown away and “virtual world’s falsehood” drowned us all. We felt a sense of betrayal, we wondered the path our youth were treading and did we fail somewhere?

Who won, who lost? Rampant misuse of social media saw lies spreading faster than truth and falsehood triumphant. There are no winners here, all are losers. And it will not take a long time for that to sink in.

Again Politics trumps Economics!

The proposed agricultural reforms were expected to be the 1991 moment for Indian agriculture. The Government by initiating the reforms was showing its commitment to reform a sector that was left out of the post 1991 story of economic growth. The archaic nature of Indian agriculture was expected to be jolted by these reforms ushering in a much needed second Revolution in the sector.

Today the decision of repealing of the proposed reforms seem to have political overtones and as always comes with an economic cost. It is a pity that the need to free farming sector from the clutches of the middlemen, brokers, money lenders is being put on backburner; it is shortsightness that we are overlooking the downside of MSP policy which has led to skewed cropping pattern and is contributing to environmental degradation; and it is hypocrisy as we continue to romanticize farming community as ‘the hands that feed us’ overlooking the need to strengthen input flow into the sector by building corporate linkages.

The policy of subsidy and entitlements which have always benefitted the big rich farmers is not what majority of farmers need. The free power, the high MSP, the oligarchy nature of APMC with few traders calling shots have benefitted a very small elite section. The need for a more deregulated agrarian setup with greater freedom of choice for farmers has been overlooked for ages. Pity that majority of the marginal small farmers may continue to see their lives dominated by the arhtiyas and unscrupulous money lenders, which in due course will compel them to move away from farming. And majority of our farmers will continue to be born in debt and die in debt.

Why do our leaders develop cold feet when political interests are under threat ? Why is a majority Government which many expected to be reformist giving in for short term political gains ? The trade offs between Good Economics and Bad Politics has been a perennial problem with our policy makers. Pity politicians sacrifice economic interests always with disastrous effects. When 1991 reforms were opposed by Bombay Club, the then minority Government did not bow down and we know how that changed India’s economic destiny.

Elections come and go. If policy decisions are going to be dictated by electoral battles, we will never achieve double digit growth or equitable growth. Reforms need strong commitment and visionary leadership. India@75 must not prod on the path of uncertainty, we need to prioritize national interests and strive at building an ecosystem where policies are driven for the larger good.

A Billion Cheers !

When the tricolour fluttered and the anthem was played, eyes went moist and heart swelled with pride. Well my emotions were no different from many out there who today rejoiced at the feat of a young man whose 87.58 meters throw brought cheers to a billion !

The last few days has seen our emotions running high with hope. With the young women power taking the lead by winning individual medals hope a strong message was delivered that as a nation we must nurture and empower the girls for they are equal partners in the nation’s progress in all walks of life.

The bronze in the national game was an emotional moment. The victory should hopefully bring back the interest in hockey. The loss of the women’s team did hurt but it again made us proud of the grit and determination of the girls whose unexpected journey in this Olympics had another stronger message. They defied the gender and caste biases to dream big for their nation

The hockey team, both men and women, was a canvas of India which was painted by players from different parts of the nation and mostly the interior Bharat. Their journey to world stage despite the economic and social hardships shows that young aspirational Bharat has it in them to script big success stories, all they need is an escosystem that recognizes and nurtures these talents.

For a billion plus the number of medals won may seem way below average but remember we are not a nation with sports culture. The large Indian middle class still marks-obsessed may hopefully realize the potential of sports as a career option. There is a need for public-private partnership to build the sports ecosystem. Kudos to Army which recognized Neeraj and hats off to Odisha government for supporting the hockey teams. Rich sports boards like BCCI owe it to sports to open it’s coffers and support other sports. The private foundations need to attract more corporate funding. Hope more State Governments forward to adopt and sponsor teams and sportspersons. It is time we give credits to students pursuing sports and integrate that into the academic assessment process. Let the burden of cramming books and scoring centums not kill our budding sports heroes.

This year we lost the ‘Flying Sikh’ who dared to give us a dream decades ago. Today a young determined Neeraj made that dream come true. This should fuel the aspirations and dreams of many more young Indians. We will not have to wait for another 13 years for a gold. Mira, Sindhu, Lovlina, Ravi, Bajrang, Neeraj and our hockey heroes, thank you for the cheer and pride !

India’s tryst with her Economic Destiny

On 24th July 1991 when Rao-Singh ushered in the reforms, little did we the pre- 1991 generation know we were witnessing history. It may have been the TINA factor that compelled political leaders to usher in policy changes which marked an end to the planning-driven Nehruvian socialism but as we complete 3 decades of reforms we need to salute the foresight and vision of the political masters and bureaucrats.

Political leaders are not credited much for economic ingenuity as they are always caught in the tradeoffs between ‘Good Economics, Bad Politics’. Rao is the least celebrated PM , which is a pity, as he pulled along the diverse political class in heralding unparalleled changes in our economic landscape which had economic, political and social impact.

India’s economic growth managed to break out of the shackles of Hindu growth rate and moved ahead with the confidence of first generation entrepreneurs, the surge of tech-based firms, the boom in stock market and entry of foreign players. Old business warloads coming from traditional business communities who dominated Indian industry gave way to a new breed of entrepreneurs who created new business verticals driven by knowledge. Gurcharan Das’s observation of “banianization” of society post 1991 speaks volumes of change in Indian mindset. Wealth creation and profits were no longer stigmatized, indeed we celebrated it. There was an element of inclusivity and egalitarianism as business ownership diversified.

The emergence of a stronger aspirational middle class altered the way we live. The desire for better quality of life clubbed with pent-up demand created one of the largest consumer market. The post 1991 growth of services like entertainment, sports, tourism and hospitality industry are all reflective of the new Indian consumer who now looked beyond basic sustenance. Many critics may look down upon the ‘consumerism’ that is so not like pre-1991 India characterized by shortages, but it is this consumerism that has led to more investments, more jobs and better quality of life.

The growth of the Indian middle class along with Mandal-Kamandal also marked the rise of Hindutva brand of politics. The concoction of identity and better economic prospects made the aspirational society shed the secular brand of politics (or the pseudo politics, as some would word it !). The decline of the grand old party as the vanguard of India’s political destiny is a reflection of changing India.

The way we live, the choice of jobs, the goods we consume, the business models, the mode of travel, the nature of banking, the mode of payments, and even our values and aspirations have changed in these three decades. At the ground level the challenges of inclusive growth, equity, degradation in environment and failure to build robust health and education infrastructure for changing India is a reflection of how economic reforms are an unfinished story.

Crisis pushed us to embrace a new economic path thirty years ago. Unfortunately, politics has made this journey a bumpy ride. Economic reforms is an unfinished agenda. Political leadership needs to realize that in these dynamic testing times the focus on building strong economy with ease of business must be prioritized. Economic growth is the most powerful antidote to problems ranging from poverty, unemployment, social inequities and even terrorism.

PVN Rao and Manmohan Singh, thank you. You changed India for better in many ways !

Coercive Legislations never work !

There is no better way of learning than flipping the pages of history and learning from our mistakes. In the over-enthusiasm to introduce Population Bill as a one-stop solution, our politicians and policy makers need to recollect this adage and also understand we live in different times.

Population policy has been touched with a barge pole by policy makers following the 1975 coercive drive and it’s backlash. For a country that was one of the first to introduce Family Planning, the need to be cautious while interfering in personal space of the citizens was political acumen. We looked at the impact of Chinese one-child policy in reducing the population growth rate but never treaded that path as India was not China.

So in 2021 are coercive legislation the solution to address our perennial problem of large population? Firstly, there is a need to acknowledge that fertility rate across most of the States is below the population replacement rate. Even the historically poor performers , the BIMARU States are seeing a drop. Secondly, coercive measures to address the population problem is never going to bear results. In the name of stabilizing population growth we will have other crisis in the making- rise in female infanticide and imbalance sex ratio. Thirdly, in a democracy can the State decide on how many children it’s citizens have and deprive one of benefits in the name of social good ?

Policy making cannot be based on the traditional approach of fines, punishments and legal action when it comes to personal matters. We are living in times where the nudge approach is strongly advocated as the basis for impactful policy making. Northern States which need to stabilize the fertility rate must emphasize on female education, better health infrastructure and investment. Economic history teaches us that there is a positive correlation between female literacy and population growth. As women get educated and enter labour force the drop in fertility rate is noticeable. There is also a need to empower women by implementing the inheritance law. Educated, economically empowered women will have the freedom of reproductive choices and will take rational decisions.

Political class and policy makers must focus on economic growth. Strengthening the investment climate, focussing on ease of doing business, infrastructural enhancement is the key for creation of jobs. Economic opportunities will open up the doors for social and economic upliftment and address the challenge of high fertility rate.

The rapid urbanization and migration, the collapse of joint family system, the desire for better standard of living makes individuals to opt for smaller families. Cost-benefit analysis is integral to decision making at a family level.The cost of raising a child outbears the so-called benefits. This may seem a harsh way of looking at an emotional bond but life’s decisions are dictated by economics many a times !

Dynamism in policy making can hardly be overemphasized. Policy makers must look beyond the traditional legal recourse and nudge society to make sensible choices. Growth and female empowerment are the best antidotes to population challenge.

Petrol- 100 not out !

Well this is a century that the cricket crazy nation will not be cheering ! With petrol touching close to Rs 100 per litre in Namma Bengaluru, the common man already at the edge due to the pandemic might be staring at more difficult days.

The Brent crude price which was in mid $20 per barrel last April during the global lockdown has seen a steady upward trend. Averaging at $ 63.40 per barrel in April 2021 it has inched up to $ 66.95 per barrel this May. With OPEC unwilling to enhance its production levels and economies slowly unlocking, the engine of economic activities is on the move pushing up the prices. India with her heavy dependency on oil imports was bound to be impacted by the global trends. The big three oil companies i.e. IOC, BP & HP have been very prompt in passing the buck of rising prices to the common man.

The century knock of petrol has been aided primarily by the high tax rates which fuel attracts in our country. The pandemic and the lockdowns have led to Central and State Governments facing their worst resource crunch. This has made the fuel products the ‘cash cow’ which is being milked heavily by the Governments. The 100 rupee per litre of petrol which we buy is made up of Rs 32.90 Central Excise duties, Rs 3.79 dealer’s commission and close to Rs 35 State VAT in Bengaluru. Well, that amounts to nearly 75% of the retail price!

Who is the culprit ? The rising global prices and starving State exchequers are responsible for this least cheered century, with the high taxes to be blamed more. The State Governments have seen their finances bleed post GST. The 41% share in tax revenue as stipulated by Finance Commission is not fully honoured and Government of India is cornering more tax revenue in the form of non-sharing cess. Left with limited options, State Governments are increasingly relying on VAT on petrol and diesel to mop up revenue.

Petrol @ 100 will have a cascading effect on the economy which has already breached the safe target of 6% inflation. For the common man who has been burdened with loss of job, loss of income and rising health expenditure the ‘fuel on fire’ will make life more uncomfortable. Trying to justify high taxes on fuel in the name of undertaking welfare and development programs to mitigate pandemic effect is bad politics and bad economics.

Political potshots is not going to give us any solutions. The need is to go back to the economic drawing board and redraw the strategies. Now is the time for Government to look at alternative resource options. This can range from monetization of debt ( provided the money is used productively), use of the large forex reserves, monetizing the large land bank owned by State, disinvestment of PSUs and even issue of sovereign bonds in international markets.

The century knock of petrol is just a reflection of the once in a century crisis. The need to mitigate the sufferings of the common man must drive the policy making process. Policy making needs to be dynamic and not bogged down by mere ideology.

Time to plug the gaps in our Health Sector

The chirping birds and blue sky of last year lockdown days seem like a dream as the screeching ambulance siren, the stench of smoke with rising pyres and floating bodies in the holiest of river is indicative of how Covid 2.0 has turned our lives upside down. The daily Covid data is no longer a mere number, it is a reflection of personal stories of tragedy, horror of running pillar to post for a hospital bed, oxygen cylinder and emotional scars that will last lifetime.

“Government failure” – well buck stops here for many! But we need to realize that “collective failure” is responsible for this catastrophe. Instead of engaging in this endless and meaningless debate on how “crocodile tears” are shed by our leaders or taking political potshots, we need to acknowledge it is time to set right the creaky health sector.

For a nation with one of the largest population, it is baffling that investment in the critical sectors of Health and Education have been overlooked for decades. Health has been the least priority of the State. The primary health care centres ( PHCC) which have been very effective model of delivery of basic health care services in Kerala, are defunct in most other States and the dilapidated centres with no equipments do not enthuse confidence as doctors are not available regularly. The dearth of doctors and trained health personnel, more so in the poor backward regions is well recorded. The last few decades has seen the corporatization of the health sector making it beyond the reach of the common man. During Covid, personal tragedies got compounded as families who did not trust public hospitals got burdened with the fat bills in private hospitals. Medical Insurance coverage being limited, stories of pawning gold was all around us.

The lessons of this pandemic must not be forgotten. India will soon have a large greying population with medical expenditure becoming the biggest expense for households. We need to plug the gaps in the health sector to avoid an everlasting human tragedy. Firstly, both Central and State Governments must enhance health spending. Focus must be to build health infrastructure in all the districts and strengthen the first line of defence-PHCCs. We need to shed our apprehension about PPP model, as that is much needed path to boost up the sector. CSR funding can be routed into the sector by tapping it for building and maintaining PHCC and equipping hospitals with medical equipments.

Secondly, make medical education accessible as India needs more health personnel. The limited seats and exorbitant fees is a deterrent, the need is to build quality medical colleges, enhance number of seats and break the management-broker nexus. Doctors must be incentivized to serve in rural areas as we have concentration of doctors in urban pockets. We also need to acknowledge the “real saviours” – nurses. Service motto is not enough to comfort these warriors , they need better pay and working condition. Our frontline warriors- ASHA workers deserve better salaries and benefits. Focus must also be on building a strong lab technical support personnel base.

Thirdly, lack of social security and medical insurance has meant the out of pocket expenditure burden is increasing for common man. We must not burden our children with life long loan burden. The coverage of ambitious Ayushman Bharat must be widened to cover the vulnerable and workers in unorganized sector. Citizens must be encouraged to take medical insurance cover and the tax benefits must be enhanced for the same.

The blackmarketing and exorbitant rates for medicines during this crisis is a reflection of another cruel reality. Life saving drugs are beyond common man’s reach. The plea to big pharma giants for patent waiver may fall on deaf ears, we need to pump in more money into research so that companies at home can be competent to come up with world class drugs. Jan Aushadhi Scheme must be strengthened as this will increase access to generic medicines. Ensuring fair reasonable pricing¬† must be the responsibility of both State and private players.¬†

Lastly, integrating technology in a bigger way is the key to ensure equity in access to medical facilities. With mobile penetration increasing and 5G all set to roll out, Telemedicine will be the future.

These tough days will not last forever, but they give us a lesson to last lifetime. A lesson we all grew up with but never prioritized, i.e. ‘Health is Wealth’. Let us focus on building a robust strong health sector which is just, fair and equitable.