While some commentators have been saying that economies of India and China will (hopefully should) be the beacons which would pull the shrinking world economies out of the present doldrums.
Though the Indian economy is expected to clock 7% growth, I am inclined to be more skeptical.
Consider these:
++ Reserve bank of India (RBI) has been easing up on liquidity with the result banks and other financial institutions have plenty of cash. But,they would not like to lend to people with dubious credit rating and most of the people who have income to make large purchases are not inclined to borrow in view of prevailing uncertainty.
++ Also, banks are insisting on much higher percentage contribution from borrowers to prevent them from simply returning the property when the prices decline which seem to be the case in many projects.
++ Most of the real estate projects were for higher end properties which have very few takers now a days. Many of the companies are scrambling to reconfigure so that medium/low income people could buy them- but this will take some time to fruity.
++ Inflation reached record low - in a developing economy like India it is alarming in my view if sinks further.It indicates that people are not buying / spending money rather they are saving money and also there is decline in demand.
++ Most of the infrastructural projects are proceeding at snail's pace
++ Finally, UPA regime has been on a spending binge without utilizing the money for creating productuve assets. This is also pushing the deficit to record levels.
Please comment......
Thursday, February 19, 2009
Thursday, February 12, 2009
Ombudsman
There is hue and cry about Karnataka H.M. (home minister) Acharya's proposal to appoint Ombudsman for electronic media.
I think there is some merit in what he is saying - Power corrupts; absolute power corrupts absolutely This is applicable to electronic media as well.
Following is an instance regarding alleged kidnapping of CPM MLA's daughter incident in Mangalore. These are the news headlines in leading news channel
in sequential order:
++ CPM MLA's daughter and friend kidnapped from bus by Bhajrang dal activists - severely beaten up. One more instance failure of law and order.
++ Girl's father says Rama sene people were responsible - insensitivity of HM, I will take it up with central leadership. No news about girl getting beaten up.
++ Alleged perpetrators arrested, 4/5 from outside state. It turns out that they belong to CITU union (communist union)
++ News item abruptly pulled out of news headlines from all channels - no explanation given.
Half the guys including the newspapers opposing are asking what is an Ombudsman?
By the way, Times of India (TOI) did have a ombudsman many years ago.
I think there is some merit in what he is saying - Power corrupts; absolute power corrupts absolutely This is applicable to electronic media as well.
Following is an instance regarding alleged kidnapping of CPM MLA's daughter incident in Mangalore. These are the news headlines in leading news channel
in sequential order:
++ CPM MLA's daughter and friend kidnapped from bus by Bhajrang dal activists - severely beaten up. One more instance failure of law and order.
++ Girl's father says Rama sene people were responsible - insensitivity of HM, I will take it up with central leadership. No news about girl getting beaten up.
++ Alleged perpetrators arrested, 4/5 from outside state. It turns out that they belong to CITU union (communist union)
++ News item abruptly pulled out of news headlines from all channels - no explanation given.
Half the guys including the newspapers opposing are asking what is an Ombudsman?
By the way, Times of India (TOI) did have a ombudsman many years ago.
Tuesday, February 10, 2009
stimulus package
I have commented here about india's economy not needing stimulus package, though the clamor from many quarters continues unabated.
My views seem to be supported by KV Kamath of ICICI. See excerpts from the interview below as well as the link of the complete interview:
CNBC TV18: As you are indicating a turnaround in the next quarter itself then can I assume that you don’t feel any need for any additional fiscal stimulus packages in the country?
KV Kamath: Package per se I don’t think we require.
URL of interview:
http://ibnlive.in.com/news/economy-already-showing-signs-of-recovery-kv-kamath/85026-7.html
My views seem to be supported by KV Kamath of ICICI. See excerpts from the interview below as well as the link of the complete interview:
CNBC TV18: As you are indicating a turnaround in the next quarter itself then can I assume that you don’t feel any need for any additional fiscal stimulus packages in the country?
KV Kamath: Package per se I don’t think we require.
URL of interview:
http://ibnlive.in.com/news/economy-already-showing-signs-of-recovery-kv-kamath/85026-7.html
Monday, February 9, 2009
without comment
Explanation for Mangalore violence in the pub -without comment:
Sri Ram sena is a sena of Vanars (Sri Ram Sena Activists) led by their Chief Vanar (Mr. Muthalik) trying to protects Sitas (Indian Girls who have lost their composure in the Land of the Sita) from the land of demons, The Lanka (pubs/bars). They ain't doing anything wrong.. While Sri Ram also gave lots of advice to the Ravans but ultimately had to attack as the Ravans of Lanka did not bend.. So stop arguing abt the minuscule violence and start rectifying our culture in actionable terms.. Keep educating the youth the pubs not to cross extensive boundaries.. Well if they don't listen hand over them to law, and if the law of the land doesn't take action or sides with the so called pub activities then its time for moral police to come in whack one or two.
Sri Ram sena is a sena of Vanars (Sri Ram Sena Activists) led by their Chief Vanar (Mr. Muthalik) trying to protects Sitas (Indian Girls who have lost their composure in the Land of the Sita) from the land of demons, The Lanka (pubs/bars). They ain't doing anything wrong.. While Sri Ram also gave lots of advice to the Ravans but ultimately had to attack as the Ravans of Lanka did not bend.. So stop arguing abt the minuscule violence and start rectifying our culture in actionable terms.. Keep educating the youth the pubs not to cross extensive boundaries.. Well if they don't listen hand over them to law, and if the law of the land doesn't take action or sides with the so called pub activities then its time for moral police to come in whack one or two.
Wednesday, February 4, 2009
Satyam fraud saga – the real story
It is now more than a month since Ramalinga Raju (RR) made his stunning
announcement of cheating to the tune of 1 Billion dollars. Every day, newspapers and electronic media come out with new revelations , “ exclusive scoops” & plants by various vested interests.
In most cases, these stories are promptly contradicted very next day by other sources like CID, RR’s lawyers, Central govt., Andra govt. , SEBI,SFO, income tax dept. etc.
In this din of news stories, sound bites and planted stories certain core issues are getting ignored deliberately or otherwise.
Consider these:
Though RR turned out be a fraudster, there is no doubt that he has built a billion dollar enterprise capable of delivering high quality products and services. According to data available, Satyam was 3rd largest Indian software exporter with turnover close to 2 billion dollars and a Indian success story. There is no doubt about quality of output or that of its many people. Otherwise, Satyam won’t be winning orders from Fortune 500 clients (like GE) and managing to retain them for so many years.
It is now more than a month still agencies (like SEBI) who have competency to unravel the accounting fraud have not got around to interviewing RR. (only today SEBI has got clearance). It is pretty clear that agencies like CID simply don’t have competency to investigate. Govt. could have easily decided as to which agencies should have priority in interrogating RR. From this it is obvious that RR has powerful political backers who are in cohorts with him. During this delay, most of the evidence would have been destroyed.
The foreign "auditors" PwC have been certifying the company for 8 years - they are being treated with kid gloves.
After taking prompt action to dissolve the board of the company, central govt. appears to have lost its way. Minister Gupta appears to have missed out on important point that Satyam is not a public sector undertaking. Also, it appears that he does not the seem to realize that govt.’s primary task is to protect the interest of share holders (who are in India and US), customers (who are mostly outside the country), employees (many of them seem to be of good quality) and ensure this type of fraud does not happen again.
Instead, govt.’s primary focus appears to be selling off the company as quickly as possible, and for a song. This will help to protect lot of vested interests and prevent skeletons tumbling out of cupboard.
Second priority appears to be appeasing foreign share holders. In the process, keeping Satyam as an independent company, protecting interest of Indian share holders & protecting jobs of employees appear to be least of govt.’s concerns.
Consider these:
When RR made his infamous announcement, share price crashed to as low as Rs 6.5 /share from original quote of 180. Critical question to ask is why did the circuit breaker of the stock exchange not kick in and stop the trading? It appears that stock price was deliberately brought down so that valuable company can be had for a song.
No information has been made public as to extent of hole in the balance sheet even now. Why should it take so long when all the transactions are electronic?
SEBI seems to be in hurry to change the rules of takeover; It is actively considering changing purchase price to be paid to average of only 2 weeks’ quoted price from six months at present.
Since govt.’s intention to sell has been made public that too at throwaway price, there is a deluge of people ready to buy the company in as is where is condition. Why are all these guys lining up? Simple. They have realized that it is a bargain in the offing. Most of them have no competency to run an IT company, some of them have even dubious track record running companies to ground. Some are even suggesting / considering e-auction as if it is cattle feed one is buying/ selling.
Also, large number of people have thrown their hat in the ring to become CEO and CFO.
Even I am considering making a bid!!
announcement of cheating to the tune of 1 Billion dollars. Every day, newspapers and electronic media come out with new revelations , “ exclusive scoops” & plants by various vested interests.
In most cases, these stories are promptly contradicted very next day by other sources like CID, RR’s lawyers, Central govt., Andra govt. , SEBI,SFO, income tax dept. etc.
In this din of news stories, sound bites and planted stories certain core issues are getting ignored deliberately or otherwise.
Consider these:
Though RR turned out be a fraudster, there is no doubt that he has built a billion dollar enterprise capable of delivering high quality products and services. According to data available, Satyam was 3rd largest Indian software exporter with turnover close to 2 billion dollars and a Indian success story. There is no doubt about quality of output or that of its many people. Otherwise, Satyam won’t be winning orders from Fortune 500 clients (like GE) and managing to retain them for so many years.
It is now more than a month still agencies (like SEBI) who have competency to unravel the accounting fraud have not got around to interviewing RR. (only today SEBI has got clearance). It is pretty clear that agencies like CID simply don’t have competency to investigate. Govt. could have easily decided as to which agencies should have priority in interrogating RR. From this it is obvious that RR has powerful political backers who are in cohorts with him. During this delay, most of the evidence would have been destroyed.
The foreign "auditors" PwC have been certifying the company for 8 years - they are being treated with kid gloves.
After taking prompt action to dissolve the board of the company, central govt. appears to have lost its way. Minister Gupta appears to have missed out on important point that Satyam is not a public sector undertaking. Also, it appears that he does not the seem to realize that govt.’s primary task is to protect the interest of share holders (who are in India and US), customers (who are mostly outside the country), employees (many of them seem to be of good quality) and ensure this type of fraud does not happen again.
Instead, govt.’s primary focus appears to be selling off the company as quickly as possible, and for a song. This will help to protect lot of vested interests and prevent skeletons tumbling out of cupboard.
Second priority appears to be appeasing foreign share holders. In the process, keeping Satyam as an independent company, protecting interest of Indian share holders & protecting jobs of employees appear to be least of govt.’s concerns.
Consider these:
When RR made his infamous announcement, share price crashed to as low as Rs 6.5 /share from original quote of 180. Critical question to ask is why did the circuit breaker of the stock exchange not kick in and stop the trading? It appears that stock price was deliberately brought down so that valuable company can be had for a song.
No information has been made public as to extent of hole in the balance sheet even now. Why should it take so long when all the transactions are electronic?
SEBI seems to be in hurry to change the rules of takeover; It is actively considering changing purchase price to be paid to average of only 2 weeks’ quoted price from six months at present.
Since govt.’s intention to sell has been made public that too at throwaway price, there is a deluge of people ready to buy the company in as is where is condition. Why are all these guys lining up? Simple. They have realized that it is a bargain in the offing. Most of them have no competency to run an IT company, some of them have even dubious track record running companies to ground. Some are even suggesting / considering e-auction as if it is cattle feed one is buying/ selling.
Also, large number of people have thrown their hat in the ring to become CEO and CFO.
Even I am considering making a bid!!
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