Sunday, February 26, 2006 

Taxpayer Staistics: What they Hide

Statistics are like miniskirts; what they reveal is interesting, but what they hide is significant.

~ An old Siddhuism

In the run up to the Indian Budget, one statistic that is being thrown around by the FM to support a plethora of new taxes is: In our country with a population of over a 100 crore, there exist only about 4.86 crore tax payers. Hence we need to widen the tax base, introduce more taxes, improve GDP to tax ratio.

An amazing figure, isn’t it? Less than 5% of the population actually pays taxes? Isn’t it outrageous for the taxpayer himself? Each taxpayer is supporting more than 19 other people who don’t pay taxes? So many people who don’t reveal their incomes? A parallel economy 20 times the size of the accounted one?

Well, if one scratches the surface, one will realise that there isn’t a need for such an outrage on the above statistic.

Consider this: India is a country in which 70% of its population is involved in agriculture. Taxing a farmer has been a political taboo, no matter how well off the farmer may be. Thus 70% of our population, or (let us consider for sake of argument) 70 crore people are kept out of the tax net.

What remains is around 34 crore of Indian population. On a closer look, one finds an average of one breadwinner every four people, which reduces the number of people eligible to pay taxes to (34/4 =) 8.5 crores.

People with an income of less than Rs. 1 lakh are exempt from taxes. Let us assume a very conservative figure of people with non-agricultural income of less than one lakh to be 1.5 crores. That leaves us with seven crore people eligible to pay taxes, out of which 4.86 already do, which comes to approximately 70%.

So the statistic drops from 5 % tax-payers, to 70%, a meteoric rise, just considering a few additional facts.

Doling out statistics is one thing, analyzing them is another. Politicians use such partial statistics to fool people. All that is required is a small amount of scratching, to see through our politicians’ plans.

Friday, February 24, 2006 

Rail Budget: A Fresh Approach

Being a regular and vocal critic of Lalu Prasad Yadav, I was extremely surprised (albeit pleasantly) by the railway budget announced by him yesterday. The budget went against all conventional rail budgets, and broke many an established norm of the regular budgeting policy. Check out the salient features of the rail budget here.

Year after year it was seen that first class fares were increased to subsidise the fares of the lower classes, in keeping with the socialist traditions of the country. This resulted in the first class fares exceeding that of airplanes. Automatically, passengers preferred traveling by air whenever it was possible. However this time Lalu announced that he was competing with airlines for the passengers, cutting AC-I fares by 18% & AC-II fares by 10%. It is yet to be seen if this will have the desired effect, as air-travel saves much more time.

Another area of marked improvement was the freight charges. Although the prices of freight were reduced, some smart marketing, buoyed by a booming economy helped increase volumes substantially. The freight trains a.k.a. the bread-earners of the railways thus ensured a profit of Rs.11280 crore for the railways. This has prompted the rail minister to setup double-decker freight carriages and freight corridors. He has also simplified the freight pricing policy. To reduce the effect of increasing oil prices, freight rates for diesel and petrol were reduced by 8%

Also, announced was the setting up of Garibraths, unreserved AC trains for poor people. The fares for the same will be 25% lower than 3-tier AC class. Still the fares are expected to be 15% above sleeper class. It may not help the poorest of poor, but the lower middle class making emergency travel will be benefited.

Lalu has also promised a drastic change in the conditions of railway stations, allowing ATMs, cybercafés and food plazas for all major stations. In addition, e-ticketing cost has been reduced. All this comes from the most vocal critic of IT. No doubt, he was lambasted by the left for privatization of essential services.

The criticisms to this budget have been the regulars. Very few trains for states other than the home state of the railway minister, Criticism from the left for being progressive and pro-privatisation, not spending enough on railway security etc. I agree with most of the criticism, but the budget has too many positives to focus on the negatives.

Maybe the measures taken in the rail budget will bring about a sea change in Indian railways. Maybe they won’t. What is really impressive about this budget is that a man seen to be ‘anti-development’ has learnt from his defeat. He has discarded conventional wisdom, and showed a novel approach to railway problems. He has shown how one can be progressive, and yet populist, two words rarely taken in the same breath.

Thursday, February 23, 2006 

The Magic of a Name

What's in a name? That which we call a rose
By any other word would smell as sweet."

--From Romeo and Juliet (II, ii, 1-2), William Shakespeare

Had Shakespeare seen the future, perhaps, he would have thought twice, and rejected the lines from his most famous creation. The name seems to be a very powerful phenomenon by itself. Names have acquired paramount significance for themselves.

Brands are the most obvious example here. All jeans in India (right from Levi Strauss to the local Rs. 200/- jeans) are made from the fabric purchased from the same company, i.e. Arvind mills. But we go to a major shopping plaza, and easily purchase a pair of Levis for Rs. 1500/-, while for a jean with a similar quality (or just the tag of Levis missing or changed to some local make) one will bargain at fashion street, even if the price quoted is 500.

Similar is the case with perfumes. Many celebrities launch perfumes carrying their names. If the same perfume is filled in bottles and sold in the market with the celebrity’s name, the price one would be willing to pay is much lower. Similarly, the price of a bat with a star player’s autograph becomes worth 100 times more than the same bat without it.

The significance of names can also be seen in the prices offered for domain names. The more general is the domain name, the higher is the price for it. sold for more than $ 1 million. and followed closely. (For a complete list of domains sold for more than $ 10,000 click here.) There have been lawsuits filed for domain names regularly.

It seems that one’s name also determines the fortune of the person. Recently, one has seen people change names (or alter them) after referring to numerologists. An extra letter here or a change of letter there, and voila! The person suddenly becomes lucky. The latest victim of this craze is young paceman Sreesanth, oops Sreesunth.

And it seriously pisses me off, when people misspell my name!

Wednesday, February 22, 2006 

Budgetary Expectations

Worldwide, not too much of significance is given to the budget. But in India, it is one of the most significant government exercises of any year. Preparing a budget for a coalition government is an excruciating task, but our current finance minister P. Chidambaram, seems to enjoy the event. This year Chidambaram had asked for suggestions on the budget (although not from bloggers like me). So here’s my 2 pence.

1. Improve infrastructure: (DUH! I don’t think I need to explain this)

2. Create job opportunities in rural areas: Provide incentives to MNCs to set up more industries there. (You will need to look at #1 for that as well). Provide electricity to the villages. Ensure more initiatives like e-choupal.

3. Encourage English education: A large English-speaking population is our strength. Ensure that it stays that way. There should be enough supply to ensure cost-effectiveness of the BPO industry. (An appeal to people: please get out of linguistic parochialism and send your children to English-medium schools)

4. Abolish (or at least modify) FBT: Genuine expenses are being taxed under Fringe Benefit Tax (FBT). FBT also acts as a disincentive for being employee-friendly. The tax is also being deemed unconstitutional, as this is the first tax on expenditure, while the constitution allows taxation only on income.

5. Tax agricultural Income: Read this.

6. Reduce the burden on the Oil companies, as well as the housewife: By cutting taxes on Petro-products, rather than subsidizing them to keep prices low.

7. Don’t listen to the left: Privatise, Globalise, Sign more free trade agreements. Give the Industry some breathing space.

8. Increase expenditure on sports: We don’t want the same comments after every Olympics/Asiad. And sports go way beyond cricket.

9. Introduce inheritance tax: Isn’t inheritance a genuine source of Income?

10.Please do not mask old schemes as new ones: This is what you did last year, and pulled wool even over expert’s eyes.

The above suggestions are my thoughts on how to improve the conditions of the common man in the next fiscal. Readers, please post your suggestions as comments

Friday, February 17, 2006 

Globalisation: A Matter of Convenience

There have been many posts on globalisation on Desicritics, and how the world has benefited from its positives or harmed by its ill effects. However, politicians world over want globalisation when it is convenient for them. Else protectionism is advocated.

The US and Europe have been seen as advocates of globalisation. An obvious thing to do, considering the market size of the third world economies, which the American and European companies could exploit. However, the moment the US felt that globalisation lead to job-flight, there was a huge hue and cry in the political establishment. Kerry based his election campaign on the issue. A few states even passed an anti-outsourcing legislation. While asking the third world countries to sign the NAMA (Non Agricultural Market Access) agreement, the European Union and US was reluctant to cut farm subsidies

The Europe has fared no better. The European Union is reluctant to grant membership to a few countries, on the basis of fears of migration of cheap labour, thus unsettling the local population. Also, in the case of Arcelor takeover, the French government has shown its racist face, by objecting to its takeover by an Indian. The question that has been raised is one of “European way” of conducting business. The French government has proposed to bring legislation for ensuring that the “hostile” takeover bid does not succeed. The only thing that has been hostile is the reaction of Arcelor and the French government.

Closer home, Our Indian politicians are not clear which way to go. It has been seen that the same political parties become pro-globalisation when in power, and start citing the Swadeshi mantra when in opposition. Even the Left is inconsistent. It supports globalisation in Bengal, but not at the centre.

The problem with a consistent approach on globalisation may just be democracy. China, being a communist dictatorship, has had a consistent approach with globalization and inviting overseas investment. While on the other hand, flip-flops are seen in all democratic countries on the issue of globalisation. This is because a few leaders can make a large population perceive globalisation as a threat. This will unsettle any pro-globalisation government, making it rethink its policy.

Wednesday, February 15, 2006 

Three Men In a Boat

Do you think that a funny book could at best tickle, or get a chuckle out of you, but couldn’t throw you in a fit of laughter? Do you think that if such a book exists, the characters would be far from reality? Does the first name to come to your mind when speaking about humour in literature is P. G. Wodehouse?

If the answers to the above questions are yes, then most probably you haven’t read ‘Three Men in a Boat (to say nothing of the dog)’ by Jerome K. Jerome.

'Three men in a boat' is about three regular people (George, Harris and Jerome) who decide that they need a break from the humdrum of daily life. So the three friends, and Jerome’s dog, decide to take a trip down Thames River in a boat. Nothing goes too wrong with their trip, but nothing goes too right either, and the incidents (or should I say accidents) and the related anecdotes narrated by Jerome are presented in a way so as to arouse laughter.

The beauty of the book is how easy it is to relate to the characters, and the incidents narrated as well. Every now and then, you are forced to quip, “Hey, I know such a person.” Or “This happened to me”. However the same thing did not seem to be as funny then. With the slightest of exaggeration and a touch of humour, Jerome makes regular incidents look so funny. The book was written in 1888 in England, but the fact that anyone can identify with it just goes to show that basic human nature remains the same, irrespective of time and place.

Just to show how universal the book is, here is an extract from the book. Jerome has read a circular which list the symptoms of a disease, and feels he has it.

In the present instance, going back to the liver-pill circular, I had the symptoms, beyond all mistake, the chief among them being "a general disinclination to work of any kind”.
What I suffer in that way no tongue can tell. From my earliest infancy I have been a martyr to it. As a boy, the disease hardly ever left me for a day. They did not know, then, that it was my liver. Medical science was in a far less advanced state than now, and they used to put it down to laziness.
"Why, you skulking little devil, you," they would say, "get up and do something for your living, can't you?" - not knowing, of course, that I was ill.

And they didn't give me pills; they gave me clumps on the side of the head. And, strange as it may appear, those clumps on the head often cured me - for the time being. I have known one clump on the head have more effect upon my liver, and make me feel more anxious to go straight away then and there, and do what was wanted to be done, without further loss of time, than a whole box of pills does now.

You know, it often is so - those simple, old-fashioned remedies are sometimes more efficacious than all the dispensary stuff.

There are two criticisms the book faces. One is that sometimes Jerome gets too descriptive with the scenery and the locations they visit, and tends to lose the readers interest. The second is one by most fiction readers, that this book isn’t “un-put-down-able” i.e. you can’t read all of it at one go. They way I look at it; it’s a strength, as you can have your laughter in bits and pieces. Read a little bit of the book whenever you are feeling down, this is guaranteed to raise you spirits.

(One may ask why I am reviewing a book written ages ago. Well, just because many of my friends have neither heard this of this book, nor the author. The book is freely available on the net, without any copyright issues. Click here to read)

Tuesday, February 14, 2006 

Mush is in the Air!!!

Another Valentine’s Day! Big Deal! Especially for people like me who choose to stay single (be it lack of opportunity or otherwise) what does it hold? Mush, mush and more mush (I am not talking about General Parvez Mussharraf, the Pakistani premier).

Look at the TV channels. Even the channels meant for kids have Valentines Day specials.
Thank god for sports channels!! But even their anchors don’t forget to wish you a happy Val’s day, and even their studios have heart shaped decorations all around. Even news channels are so full of stories of the opposition to Val’s day by Hindu right wing groups. And during the breaks, you can’t escape the mushy ads, irrespective of the channel you are watching. And I don’t even want to speak about the movie channels.

So, tired of running through TV channels, one decides to read the Newspapers. But they too are full of V-ay stories or list of products to buy for one’s lovers. The society pages are full of advice of how to have a perfect V-day. TOI today didn’t even spare the sports page, listing hot sporting couples in their Mumbai edition. Expecting pink papers to fare better, one picks up ET, which too highlights the other events for which Feb 14 can be celebrated (much better a read, but again, no escaping the mush).

Hoping that blog sites will do better, one turns to them, but here as well, one can’t escape the ubiquitous v-day gift ads. And then you have bloggers who are either telling you where to find love, or how they plan to spend their V-day, or just plainly critical of the concept (like yours faithfully) on their blogs. Anywhere else on the internet too, you find similar stories, as with all other forms of media.

To cut the long story short, singles and uninterested people just can’t get away from the omnipresent Valentine’s Day on Feb 14th. Is there any escape from Valentines Day?

Sunday, February 12, 2006 

One CHild Policy for India? --- Naaah!

The other day, I was involved in a debate over the one child norm in India. There has been talk of population explosion, especially now that India is set to overtake China in terms of population in the near future. But seriously, is enforcing the “One child norm” any solution? And isn’t treating population as a problem a passé?

We seem to be getting out of the mindset that a huge population eats into our resources. Rather we have just started treating our population as a resource. It is the size of our population that makes India so dear to the world as a market (thus allowing us to arm-twist developed nations into conceding in return for opening our markets), as well as ensures that India remains the world’s back-office by providing low-cost employees.

The One child norm hasn’t helped China as well. Today one sees an aging population in China, which is a cause of concern, as more and more people slip from a working age to retirement, thus acting as a burden. There are fewer recruits available to the Chinese army.

Another problem lies with the implementation. We started with Do ya teen bachche followed by Hum Do Humaare Do. That we need one child policy now implies that the earlier two couldn’t be implemented so as to get the desired result. What guarantee is it that the one child norm will work?

On a personal note, the reason for my opposition to the “One child” norm implementation is that its success would deprive children of the joy (and the pain) of having a sibling. I have shared a khatti-meeethi relationship with my sister. Having a sibling teaches one to share, give us a friend we can always rely on, and learn a lot from having some one around all the time. In addition, especially in the Indian context, wouldn’t the One Child norm spell the death of festivals like Rakshabandhan and Bhau beej?

The way I see it, implementation of the One Child norm in India seems like a waste of resources. The best family planning method that has shown that it can work is Education. Rather than change the family planning policy every decade, we would do much better if the same money is spent on education.

Thursday, February 09, 2006 

The sense, not to paint one's Mother Nude.

There has been some discussion within all forms of Indian media about MF Hussain’s latest publicity stunt. The issue has similar connotations to the caricatures of the prophet in Danish newspapers. Many have argued in favour of displaying such paintings. While Indian TV news channels have been loathe to show the prophet’s caricatures, they have been all too willing to display this controversial painting of a nude Bharat Mata.

I am not in favour of any displays of the national icons in this manner. People speaking in favour of Hussain are guilty of obfuscating issues. This is not the same as painting a Hindu goddess nude. This is one of depicting national icons in poor taste. As there is always confusion in India about Hindu fanatics and nationalists, people are looking at it from Hindu value systems, and trying to explain how nudity and sensual ness have always been acceptable in Hindu theology.

My first point of argument is: In present day India, Victorian prudishness is the established and accepted set of norms. So the painting goes against all prevalent norms of acceptability, at least present-day Indian norms.

Point # 2: The depiction is one of Bharat Mata i.e. Mother India and we do not look towards our mother’s as icons of sensuality. Incest is not acceptable in India, and most of the present day world. So those who speak about sensual depictions, please look at the context before speaking.

Point # 3: Look at Mr. Hussain’s track record. He has always been a publicity hound, looking for any free publicity that comes his way. And he also suffers from double standards, talking about freedom of expression while offending Hindus, but withdrawing his movie when it offended Muslims. So the argument of artistic expression doesn’t stand. It seems that it has been done with an eye on publicity.

Whenever nationalist sensibility is offended we generally have our national media looking to trivialize the issue, and pooh-pooh the people who take offence. But if one looks at it from a neutral perspective, all the media is doing is forgetting the facts in order to be politically correct.

Wednesday, February 08, 2006 

Demolition orders: To legalise or not?

In Ulhasnagar and Delhi, the HC has ordered demolition of illegal constructions throughout the city. These demolition orders have opened up a Pandora’s Box for the respective state governments. On one hand the state governments cannot face the public angst on the issues, while on another hand by legalizing them the governments break the laws they passed themselves, and also risk invoking the court’s ire.

The reason this issue has become such a talking point is that seeming innocent people are being punished for the crimes committed by the nexus of municipal organisations and builders. Whilst the builders and municipal officers are getting away scot-free, the common man faces demolitions. Hence, in order to set things right, the governments must bring out ordinances to legalise these structures.

Legalisation by itself causes another large set of problems. What to legalise and what not to legalise? There are certain individuals of the view that, in order to maintain its credibility, the government should legalise non-commercial building, but not legalise commercial ones, as the owners of commercial property are not common men. But haven't some of these so-called common men knowingly broken the law, by encroaching upon public spaces?

Also, wouldn't this be a dangerous precedent, where vested interests start citing ignorance of law to mount public pressure on the government to legalise hitherto illegal and unconstitutional things? And wouldn't such an act be overriding the orders of the HC, thereby ridiculing its authority?

This issue is a tricky one, with the legality of such ordinances posing fundamental questions to the relevance of court orders. But at the same time it is heart wrenching to see people lose their homes, for no fault of theirs, just because builders and municipal officers decided to make a few extra bucks.

Related links:

'State not courageous to punish its own'
Indian Government Announces Committee To Legalize Illegal Structures In New Delhi
You’re impotent, HC tells state

Monday, February 06, 2006 

Means & Ends

With so many sting operations taking place every now and then, one just can’t help ask the question, “Do the ends justify the means?”

As we know, it is as much a crime to offer a bribe as it is to accept one. However, most TV channels cite the end, i.e. revealing the corruption to public, as an excuse and expect that no action be taken against them. In most cases, no action is taken against either, the TV channels or the corrupt politicians they expose.

But is exposing corruption the real motive behind these operations? If so, how many TV channels actually file cases of corruption against the politicians, now that the have proof? And what is it that absolves them of their crime of having enticed people into committing a crime? Why is no action taken against the journalists who are shown offering bribes?

Which brings me to the topic: Do ends justify the means? If so, then why are we condemning the Jehadis, who have an end that is pure, freedom of their motherland, even though their means are violent? Isn’t claiming that the end justify the means denigrating to the Mahatma, who always emphasised that the means should be as pure as the ends? Why should, then the Indian freedom struggle stand out from the rest? What good is the principle of Non-violence, which is a slower means to any end?

The End has always been abused to justify the means. But as shown to us by Mahatma Gandhi, if we wish for a noble end, the means to achieve it must be as noble, else the end does not remain noble any more. It is because of their means that jehadis all over the world have lost support for their causes, irrespective of the nobility of their cause.

Thursday, February 02, 2006 

Cricket Diplomacy - End of Niceties?

Cut to 2003: An Indian team, after a long break from bilateral cricketing ties, goes to Pakistan to a warm reception, packed stands, and wildly cheering audiences. The players too display on field etiquette towards each other. The crowds hold up banners of “Vaat lag gayi, Mamu!!” to Balaji hitting their bowlers for sixes. Everybody talks about benefits of Indo-Pak friendship.

Cut to 2006: Another Indian team goes to Pakistan, meets cold responses, unpleasant vibes, and almost empty stands. At Faislabad, half the tickets are given away free to attract crowds. There is on-field unpleasantness, and no reports of what is happening off the field. The politicians are virtually missing from the scene, so are the benefits of the peace process. The Indian coach, on the verge of losing a test match, suddenly remembers that Shoaib’s bowling action is flawed (which, for a long time has been more than apparent), leading to some more ill-will.

Is this the end of cricket diplomacy? Where has all the good will disappeared? What happened to the camaraderie between the players? If that series was a sign of improving Indo –Pak relations, was this series an indication of the deterioration setting in again?

The answer for the last question is an emphatic NO! With the Pakistani General himself claiming that relations with India have never been better, the peace process is still on. The only thing missing is the hype, and that’s a good thing. A hyped summit is constantly under the media scanner and there is public pressure for fast results. A slow and steady peace process is the needed, so that results need not be forced, but can take their own time.