Thursday, June 21, 2018

012 Why do Indian Prime MInisters depend on Imported Bourgeoisie Economists?

One question which pesters my mind all the time is "Why does India, and why do Indian Prime Ministers always depend on Imported Economists? The Context for my internal turmoil today, is the News of the Exit of Mr. Arvind Subrahmanian, Chief Financial Adviser to Government of India. Reason as disclosed by Shri Subrahmanian himself and the Finance Minister Shri Arun Jaitley: "...He would like to go back to the United States on account of pressing family commitments... He left me with no option but to agree with him...". "...On the expiry of the three year I had requested him to continue for some more time. Even at that stage he told me that he was torn between family commitment and his current job which he considered the best and most fulfilling he has ever done. ... "

Is Competence, really a criterion for selection of CFA, and RBI Governor?

Mr. Arun Jaitley is reported to have, about choosing the successor for Mr. Subrahmaniyan, observed as under:--
"...The criteria should be competence, competence, competence, ..."

ybrao-a-donkey's personal views not intended to be imposed on others:--

1. India is a poor country, with half of the population still eking out an existence of semi-starvation, though this may not get reflected in official figures of poverty and growth rate, GDP Statistics.

Incomplete. Shall add / delete / modify shortly.

Wednesday, June 11, 2014

011 India and China can neither have business rivalry or business synergy

011 India and China can neither have business rivalry or business synergy

Topics for discussion: Trade with China, Exports to China, Imports from China, Narendra Modi, Arunachal Pradesh, Stapled Visas, Xi Jinping

There is a tendency among educated Indians to compare the development of India and the development of China, and pass some comments or value judgements.

Mr. Narendra Modi, the 2014 Prime Minister of India too seems to have considered India to be in developmental race with China.

Soon after Mr. Narendra Modi took over as PM of India, Mr. Li Kequiang the PM of China, telephoned Mr. Narendra Modi and talked to him for about half an hour.

Mr. Narendra Modi was said to have recalled the visit of the Chinese traveller Hiuen Tsang during the 7th Century to his native place Vadnagar, Gujarat.

Mr. Narendra Modi was reported to have extended an invitation to Mr. Xi-Jinping, the President of China to visit India.

After this- so much of exchange of cordiality and invitations to visit one another's countries, Chinese Foreign Minister, Wang Yi visited India recently.

He was very clear about the stapled visas, being issued by China to Indian Citizens residing in Arunachal Pradesh, visiting China.

"...China has resorted to a special arrangement of issuance of stapled visa to address the need for travel of local people. This gesture is out of goodwill and flexibility and if we do not do that we will not be able to address the concern of outbound and overseas travel of these people..."

"... If this is acceptable to Indian side, it could be continued in the future as it does not undermine or compromise our respective positions on the border question and we will be able to address the question of these people... ".

"... Both India, China have willingness and capability to handle boundary issue properly and not allow it to impact on overall growth of ties. Issuance of stapled visas to people of Arunachal is 'gesture of goodwill' as there is dispute over the area between India and China..."

Here, by local people, they mean the people of Arunachal Pradesh.

What a great goodwill gesture!!! As if India is begging China to issue stapled visas.

Mr. Narendra Modi visited China four times so far, during his tenure as the Chief Minister of Gujarat.

ybrao-a-donkey's observation

Great patriot Mr. Narendra Modi is very particular that Bangla Deshi Citizens who strayed into India should be driven out immediately. China occupied nearly 36,000 sq. miles of Indian territory in Ladakh and Arunachal Pradesh in 1962 i.e. 52 years back. Why didn't Mr. Modi show the same concern about Chinese vacating the Indian territories occupied by them.

Even if assuming that as a Chief Minister of a State, he is not free to express his views against a large neighbor, why did he visit China four times? This nobody will and can force him to do. Again, assuming that he visited China first time, to know what was going on inside the iron curtain, why did he visit China, the remaining three times?

Only during his 2014 election tour of Arunachal Pradesh, how could he suddenly remember that China had expansionist mindset?

Love thy neighbor who occupies your territory and visit his country four times for what?

I do not mean to say that Mr. Narendra Modi should declare a vocal or real war with China.

(To continue, after checking up if the content of this post hurts any person or institution's sentiments).

Monday, June 09, 2014

010 Modinomics is not going to be different from Manmohanomics

Topics for discussion: Foreign Direct Investments, Foreign Institutional Investors, Portfolio Investments, Modinomics, Manmohanomics


Typical Indian village scene. Image courtesy Y Srinivas, Tanuku.

How Modinomics and foreign investments, are going to benefit these children of Narendra Modi?

Bourses (Stock Exchanges) in India have overreacted to the coronation of Mr. Narendra Modi as Prime Minister of India.

The speculators both foreign and Indian, have not realised that there is not going to be any major difference between the economic policies of Mr. Narendra Modi and Mr. Manmohan Singh, though Mr. Modi has not studied at Cambridge or Oxford.

There are also not many differences between the approaches of Mr. Arun Jaitley and Mr. Chidambaram, except that a neatly pressed lungi (loin cloth) has been replaced by an equally well-starched and ironed pyjama.

Both Modinomics and Manmohanomics support pumping in of foreign investments.

We must remember three things:

1. Bulk of the foreign investments we get into India may not be real "foreign investments" at all. They may be only Indian export proceeds, or siphoned of import payments/kickbacks through money laundering route. It is strange, that we call our own moneys as foreign investments.

2. India needs foreign investments in heavy industries which need most modern technology, together with transfer of the manufacturing technology. But the foreign investors are not keen on that! What we get are McDowel Pizzas, or Cobra wines, Casinos, Hotels and Prostitution Houses. They tend to contaminate India more, rather than helping in India's development.

3. Most foreign direct investing Companies are more interested in capturing land for development of real estate, rather than for construction of factory workshops, installation of plant and machinery.

This process is going to reduce Indians into security guards for thousands of acres of well-fenced estates with great sign-boards.

We shall be making a wild goose chase, by pursuing foreign investments, whether direct or portfolio investments, individual or institutional investments.

Let us not doubt the patriotic fervor of Mr. Narendra Modi, albeit he may be some- what overenthusiastic about religion. Let us, therefore, hope that he will redesign his economics in right direction. He should not commit the same mistakes which Mr. Manmohan Singh, Mr. Pranab Mukherjee, and Mr. P. Chidambaram committed. But alas, Mr. Modi and Mr. Jaitley are treading the same path. If that be so, even God cannot save Indian economy.

Thursday, May 29, 2014

009 Is Sonia Gandhi really concerned about Jawaharlal Nehru and his Economics?

009 Is Sonia Gandhi really concerned about Jawaharlal Nehru and his Economics?
Topics for discussion: Sonia Gandhi, Jawaharlal Nehru, Nehruvian Economics, Manmohan Singh, P.V. Narasimha Rao

Mrs. Sonia Gandhi, while speaking on the 50th Death Anniversary occasion of Indian First Prime Minister Jawaharlal Nehru, promised that she is still committed to the policies of Late Jawaharlal Nehru.
Staunch secularism and socialist economics are still the Congress’s core beliefs.

...Nehruvian values are being fundamentally challenged by some in the prevailing political climate...

...Congress encouraged the involvement of the private sector in wealth generation and economic growth, but it remained “profoundly wedded to Nehru's concern for the weakest sections” of society.

Even though the Congress remained committed to the four pillars of Nehruvianism — democratic institution -building, staunch secularism, socialist economics and a foreign policy of non-alignment — that were integral to a vision of Indianness, the party is not stuck in a time warp, merely repeating the conventional wisdom of 50 years ago.

...Nehru himself was a man with an open and questioning mind, would have evolved with the times, even while remaining anchored in his core beliefs.

...It had become “fashionable” to decry socialism as a “corrupt and inefficient system, that had condemned India to many years of modest growth levels...

Rajiv Gandhi said three decades ago, that over time the socialist model as practised in India developed many flaws. At the core of Nehru's socialism was the conviction that in a land of extreme poverty and inequality, the objective of government policy must be the welfare of the poorest, most deprived and most marginalised of our people…Today, we refer to this as inclusive development.

...Today, Congress welcomes the involvement of the private sector in wealth generation and economic growth and in making possible so many new opportunities for the young to succeed in a globalising world. But we remain profoundly wedded to Nehru's concern for the weakest sections of society.

Comments of ybrao a donkey

Mrs. Gandhi had just read out some speech written by expert in her samsthAn. She does not know anything about Nehru or his economics. Otherwise, she would not have allowed Manmohan Singh to dig a big trench and bury the Nehruvian Economics in it.

Of course, Mr. Narendra Modi also may not really know or bother anything about Nehruvian Economics. No need to mention about Mr. Arun Jaitley.

Sunday, November 20, 2011

008 Where is India leading?

Late Jawaharlal Nehru, the first Prime Minister of India was a visionary. He launched India on the path of socialism which aimed at and partly succeeded in creating a sustainable public sector. The merit of Public Sector reaching commanding heights visualised by Nehru was, the social ownership of India's natural resources and means of production.

Mr. Manmohan Singh, the 2004-11 Prime Minister of India, garlanded Nehru's statue, on the 19th Nov. 2011 as a part of the ritual of Nehru's birthday celebration. It is a pathetic site to see the demon Singh paying tributes to the first PM.

Mr. Manmohan Singh has the dubious distinction of reversing everything Nehru visualised and introduced, in the name of economic reforms, liberalisation, privatisation and globalisation (LPG). The demon Singh, instead of taking ahead Nehru's policies to the next higher level, stabbed them.

We, now have private monsters, in every activity in India, with glaring inequalities of income and wealth, disproportionate by any standards of reasonableness. E.g.: Antilia, the 27 floored house of Mr. Mukhesh Ambani, the scion of Dhirubhai Ambani. The 27 floored house was intended to be a dwelling of just Mukhesh Ambani, his wife Nita, three children and his mother. Total is, just six. We can now, compare this opulence and garish luxury with the slum dwellers of Mumbai, where 20,000 people can pack themselves in the same area, with the housing being too scarce and too expensive.

Another example. National Mineral Development Corporation was the mining organ of the Government of India. Some States have their own Mineral Development Corporations. Then how is it, that Mr. Gali Janardan Reddy and his Obulapuram Mining Company could make nearly $1 billion exporting iron ore? How is it that Rashtriya Ispat Nigam Limited, Visakhapatnam, a public Sector Steel Company is suffering from shortage of its raw material, the iron ore? The Governments are feeding the private sector tycoons and starving the Public Sector.

One more example. Nehru, J.R.D. Tata and other visionaries developed Air-India and Indian Airlines as a public sector entity which would cater both to forward regions like Maharashtra and backward regions like the North East. But what did Mr. Singh and his ilk do? They brought in a dozen private airlines with promises. The Private Airlines, by their recklessness not only became sick , but also made Air India sick. The Government, now, wants to sell Air-India. Where are the buyers? The Private Sector in the eyes of Mr. Singh's team, is supremely efficient. Then, how is it Kingfisher Airlines unable to pay its fuel bill? How is it, that its planes do not fly as per schedule? Had this taken place for the public sector Airline Air India, the industrialists and their crony media would have made hue and cry pin-pointing repeatedly the failures of public sector. Why don't they now speak about their own failures?

The Media, even now, trumpets Mr. Singh as the great emancipator of Indian Economy. He and his assistant-turned-boss Mr. Pranab Mukherjee repeatedly assert that they are going to launch the second phase of economic reforms. Mr. Mukherjee is very keen on disinvestment of public sector, by disposing off the shares held by the Government. This, they are going to do in profit making public sector undertaking, because the private sector industrialists will not buy the shares of loss-making public sector Undertakings unless they have lands which can be converted into real estate. Why nobody buys Air India? Why everybody wants ONGC or IOC?

Thus the economy is on the reverse gear, by selling shares in profitable Companies and holdng on to loss-making Companies.

Tuesday, October 11, 2011

007 Multiple Choice Questions in Indian Monetary Economics


To whom this test will be useful:
Candidates appearing for
*SBI Probationary Officers' Examinations.
*Probationary Officers' Exam. of Bank of Baroda.

Wednesday, September 14, 2011

006 Javascript for calculating natural logarithm of a number

I have recently assisted a friend to prepare for the 'Dealer's module examination for Derivatives (NCFM)' conducted by NSE Ltd., Mumbai, India. I have, at the time, faced a problem of calculating ln(natural logarithm), while computing interest rates with continuous compounding.

The calculator available on my mobile as well as the calculator on my laptop did not have a button for calculating the natural logs. It became inevitable for me to write a small javascript for the purpose. This is based on the help scripts available on the Net. I express my gratitude to such helpful netizens.

Here is the script. Open a text editor (say note pad in windows - or gedit in linux) and type the following code.

<html><head><script language='javascript' >

function fnatlogcalc(){

var vtemp = prompt("Enter the number for which log is to be calculated", 2.718)

var vnatlog = Math.log(vtemp)


} //end func fnatlogcalc



<body onload='fnatlogcalc()'>

<input type='button' onclick='fnatlogcalc()' value='Calculate natural logarithm of the number you feed'></button>

Try the above script here:

After pasting the above script in your note pad /gedit, save the file as some name.html (e.g. natlogcalc.html). Select 'all types' at the bottom of the save window in notepad.

Open the html in your browser. You will see the button 'Calculate natural logarithm of the number you feed'. Click it. You will get an alert to enter the number for which you need the natural log. Default appears as 2.718. You can enter any number and click ok button. You will get another alert showing the natural logarithm.

I am not an expert on javascript. I had to write it because a compulsion arose. While going to the Derivative Dealer's test, I believe, you will be permitted to use a scientific calculator which will have a natural log button.

The above javascript is intended for a situation where you have a laptop/pc in hand, but no scientific calculator.

Tuesday, September 15, 2009



The answer is "not unlikely" unless some politician of the opposition party has some large deposits and the Government of India wants to harass him.

The Indian Prime Minister declares that he wants transparency in banking transactions. It is hypocrisy.

Mr. Ramjethmalani, former Union Minister and a Senior Advocate, filed a petition in the Supreme Court, seeking a direction to bring back the Rs. 70 trillion crore ($1.5 trillion approx.). The petition has political overtones.

Mr. L.K. Advani, the Senior B.J.P. leader also asked the UPA Government to bring back the money in Swiss Banks. He himself was Dy. Prime Minister for five years. Why didn't he take such steps?

The non-co-operative attitude of the Swiss Banks is also a blessing in disguise for the Indian politicians.

India tops all the countries whose citizens deposited their stashed money with Swiss Banks. Added on 20.05.2014 The new BJP Government headed by Mr. Narendra Modi appointed a Special Committee headed by Retd. Justice Shaw, consisting of various Agencies of the Government of India, asking the Committee to dig out the black money.

We have to examine this aspect in depth.

Sunday, July 15, 2007



The appreciation of Indian Rupee vis-a-vis US Dollar might have hurt the Indian exporters. The exporters' lobby prevailed and the Government of India shelled down Rs. 14000 million = Rs. 14 billion = USD 300 million approx. as relief to them.

When US Dollar rises and Rupee falls, the Indian exporters make cool windfall sweeping profits. They do not pay anything to the Reserve Bank of India or the Government of India. Why?

Numerous facilities are available to exporters in forex markets for protecting themselves against adverse fluctuations in rates, such as Forward Purchase Contracts, Forward Options, Forward Futures, Rolling Contracts. The exporters have to trade in goods and services and not in foreign currencies, that means they should always try to protect themselves through appropriate hedging arrangements with Authorised Dealers in India. That they do not do because they are interested in windfall profits from exchange gains.

It also reflects a sad state of our economy and our export business culture that our exporters depend more on weakness of Indian Rupee for their export competitiveness rather than the price and the quality of their product/service. When export of anything is artificially propped up through a weak Rupee, India loses its wealth by exporting more "value of goods/services" than really due. Some countries might have temporarily succeeded using this technique by resorting to repeated devaluations. But this tool does not always work. Besides, the tool is effective only when a country's external value is bloated than its real worth, by artificial means in the past.

In the current managed exchange rate mechanism adopted by RBI, it is difficult to say whether RBI is artificially bloating up or pulling down Rupee. If market forces truly operate the trends should reflect both ups and downs. However, the real problem of protecting Indian Rupee from the wolves of speculators who have nothing to do with genuine exports/imports of goods and services is an extremely difficult task for RBI.

Saturday, July 14, 2007



Shri Varun Soni reported in Financial Express that the Government is planning to introduce mandatory insurance for builders.

The ostensible object is to ensure structural soundness of buildings against earth quakes and fires; reduce insurance costs to citizens.

There is a proverb in Telugu. "Taad`i cett`u emduku ekkaavamt`ee, duud`a gad`d`i koosam annad`at`a.) Anecdote: A person climbed a palm tree and was sitting there. Passers by asked him why he climbed the palm tree. He replied that he was searching for fodder for the calf. Will fodder be available on a palm tree? The Govt. is like the fellow who climbed the palm tree.

The Govt. is under pressure from the insurance lobbies, most of which today are dominated by foreign insurance companies or their joint ventures. Somebody turned the screw in Urban Development Ministry. If structural soundness is foremost in the minds of the Government, several Government Departments and Agencies today have powers to inspect the buildings and ensure that the precautions are taken. In fact an occupation certificate is to be given only after all the safety requirements are conformed with. The Departments particularly the City Corporations even have power to demolish the buildings. How many buildings have been properly inspected and building safety norms enforced? How many non-complying buildings have been demolished? The real structural weakness is in the Government to enforce safety. One of the most corrupt countries in the world, India can never ensure safety of buildings, except on paper. The fate of the citizens can be safely left to the Gods and Goddesses of all religions. Anyway, wives pray for the safety of their husbands and families.

Expecting the insurance companies to discharge the duties of a Govt. is naive.

When a real earth quake occurs in India, how many insurance Companies are going to honor the claims without demur, can be a matter of conjecture. The small print will then come to the fore.

The checkered history of foreign and private insurance Companies in India, the people may forget. But history does not forget.

Sunday, December 10, 2006

001 Review of Indian Economics

001 Review of Indian Economics
Topics for discussion: 001, Trickledown Economics, West Bengal, China, PPP TRICKLEDOWN ECONOMICS


The CPM Government in West Bengal is imitating China in clamoring for foreign investment. Its CM is visiting US to invite American Companies to invest in his State. Hitherto, CPM at Centre is extremely critical of India allowing foreign investment. Now, a volta facie.


The Prime Minister of India revels in canvassing Public Private Partnerships. But, in fact, the PPP in India has become "Pirates in Public Properties". Proof: The Private Sector Industrial magnets mismanaged their industrial empires and enriched themselves, leaving the public (common small shareholders) subscribed units high and dry. They have also simultaneously saddled the Public Sector Banks with thousands of sick units blocking billions of Rupees in Non Performing Assets.

The Public Sector Banks coolly wrote off those amounts from the profits earned by them on advances to healthy units and moved the bad debts to Off-Balance Sheets assets so that they do not get closely scrutinised by the Auditors or the Parliament, with afflux of time. This is a punishment to disciplined borrowers, and reward to willful defaulters.
Now, the PM Mr. Manmohan Singh expects the industrialists to participate in joint sector, manage the public sector units profitably. This is against the very nature of the industrialists. The PPP is going to be a sort of buffalo. Govt. will feed the buffalo with grass. The industrialist will milk the buffalo. Hey! What a healthy partnership?




Yesterday, (Dec. 26, 2006), when a Bank at Narasaraopet, Andhra Pradesh, India, opened its doors after Christmas vacations, it found that its FIRE AND BURGLARY RESISTANT SAFE was broke open with gas cutters and gold worth about USD 1 million was burgled. 4 kg. of molten gold was untouched. Large cash was also not touched. The Bank had insured its valuables and will get itself indemnified. The Insurance Company may be safe because it would be paying from the pool of premia collected from thousands of banks. The Bank did not have any security guards posted at the locked shutters. If the burglars melt the gold and sell it, the people who kept their gold in bank will only get an approximate value of the gold ornaments. Definitely, not the actual jewellery ornaments which may have personal attachment to the citizens.
'PR'>Is it a national loss? As long as the gold does not move out of a country, it cannot be called a national loss. Instead of individuals holding it, the thieves or buyers from them hold it. Gross Domestic Product (GDP) may not change.

But Can we say that insurance really serve any purpose?

SEBI (Securities Exchange Board of India) is planning to create an Investor Protection Fund, to protect the small investors. It proposes to use the fines and penalties collected from listed Companies for the purpose. SEBI also wants to initiate an Investor Awareness Programme.

'PR'>Spreading investor awareness is always welcome. But creating a protection fund may not serve any purpose, because 1. the number of fly-by-night operator Companies is very large. 2. Investors are supposed to be on their guard. Most of them want speculative profits and burn their fingers.

If SEBI can take really punitive action against the defaulting Companies, it should be sufficient. The premia collected in Initial Public Offers is very high vis-a-vis performance of the Companies and the promoters. Still, they get oversubscribed several times only with a speculative motive. The Companies cannot collect astronomical sums and vanish in thin air. Investor Protection Fund is a sort of insurance. It protects inefficient investors. It penalises listed Companies. Real defaulting Companies prefer to get themselves delisted.

Company failures and disappearances have become routine. SEBI does not know even the addresses of the Directors of the closed Companies. Its preventive as well as corrective investigative wings are to be strengthened.

(Feb. 16, 2007) reported that Funds Managers are shifting their investment preferences from China and India to Korea and Taiwan.

COMMENT: If this really happens, will the Indian Stock Exchanges dry up?

New York Stock Exchange (NYSE) acquiring 26% stake in National Stock Exchange (NSE) is being touted as a great achievement and recognition for India. Following the que, Bombay Stock Exchange (BSE) according to news reports, is falling at the feet of the London Stock Exchange, NASDAQ, Deutsche Bourses, Singapore Stock Exchange to buy 26% stake in BSE.
PR'>COMMENT: What a shameful downfall? The famous Moghul emperor of 1627, tempted by gifts and gold coins, permitted the English merchants to build their godowns at Surat. Venkatapati Rayalu II and his vassal leased out Chennai to East India Company and permitted them to build a fort. The Europeans occupied the whole country and robbed it for 250 years.
What did we learn from history?

Nobel Laureate Amartya Sen rides on two horses. 1 Market Economy. 2. Welfare Economics.
'PL'>The West recognised his talents. It gave him Professorships, awards and rewards. It gave him a cousy shelter. Hence he cannot afford to neglect Market Economy. Fortunately he has a Government of India and a Government of Bengal who are equally devoted to the Market Economy.
Whenever he visits India, he gets worried about hospitals, hostels and schools He feels that Government is not spending adequately on welfare. He is fair enough to recognise that Market Economy will not build hospitals, hostels and schools, because the Market gets nothing from such generosity. Yet the sametime, he raised a question that Market Economy should consider the benefits by addressing to issues of rural poverty. This suggestion will be overlooked by the market economy, while at the sametime it does not mind to shower some awards on Sen. Because, Market Economy today wants Super Profits and not normal profits which were part of cost of production, discussed by the classical economists like Adam Smith. Indian Rural Economy is emaciated, has no flesh to generate super profits. Showering awards is easier for the Market Masters.
Governments will not spend more on welfare. The early Govts. after freedom 1947 were led by freedom fighters. Hence, they had a genuine zeal and honest thinking to raise the Nation. Today's rulers are industrialists and mafia leaders who send millions just to get elected to Parliament. They have to get back their investment. Every Rupee spent by the Govt. will, therefore, be their private capital generating profits for them. Where is the place for welfare? Probably welfare of their own party workers and supporters whose services they have to use for booth capturing and rigging.

'PL'>Mr. Joseph Stiglitz, Nobel Laureate Economics 2001, in an interview felt that Trickledown Economics did not work in USA. Implication: US has a very high GDP growth rate; but its poor are not receiving the benefits of growth in US.

Prime Minister and Finance Minister always sing the song "Our growth rate is going to 10% p.a." . The PM himself admitted that there are gross income and wealth inequalities and the benefits of development have not reached the minorities, SCs and STs. Their party ruled 50 years out of 59 years of independent India. Another study report indicates that 200 million Indians survive on a daily wage of less than Rs. 12/-. If this true, then it implies that the fruits of development have been pocketed by the Congress rulers and the bureaucrats. As a former Finance Secretary and Governor of Reserve Bank of India, our PM should also accept his share of responsibility.

Since, he pledged to remove the inequalities, it will be apt if he donates 50% of his wealth for the welfare of minorities.