Why Depreciating Rupee is good for short term..

If you look at Indian currency INR (Rupee), it has been depreciating from past 45 days, the reason might be the outflow of dollars. High inflation numbers and poor industrial performance is also not helping the stock markets. We are seeing the spur in demand of precious commodities like gold and silver as lot of economist are fearing a double dip recession. Our currency has now depreciated to more than 48 per dollar from 44.5 just 45 days back which is nearly 7 to 8%. But this deprecuition of currency might be good for the country in short term.

1. It will make exports Competitive and might improve the capacity utilization of manufacturing companies. 

2. Increase the investment in Indian equity and Debt market as dollar will get god valuation.

3. Curb outflow of investments from India and the money might be invested in Indian businesses.

4. Natural Hedge against the selling by FIIs as the FIIs will loose in dollar terms.

See the Difference ..

:)

Why Jan Lokpal law can slow India down..

We might all be cheering hard for Jan Lokpal which the Anna team has presented but are we aware that it can adversely affect the growth of the country. Following are the prominent reasons which might derail the good growth in India if very strong anti-corruption bills are passed.

1. Dis-incentive for Government machinery: The government machinery, banks, public institutions are so used to bribes that it has become a part of their compensation. Infact the salaries offered by government is so less that it barely makes up for their needs and reflect their experience and qualifications. These people are there on those roles just because  they are getting incentives from extra money they make. This also improves the speed in the system as they try to push the proposals. 99% of times wrong proposals are not passed by bribing, its just that the deserving proposal gets those extra legs and gets passed on priority. Time is money and the whole business suffers if the speed of transactions reduces.

2.  Fear of doing Wrong: Anyone and every one can do things wrong at times. Consider a bank manager working in a PSU, who passed 100 loans every day, he can get a few loans passed wrongly as people submit fake documents difficult to differentiate. Now if you will hang that person for doing wrong in 1% of those cases, he will never work efficiently. The fear of complaint, disrespect will make people take a lot of time in doing routine things and the speed of the whole value chain will be greatly reduced. For example, if I give a slap to Sehwag for getting out below 10 and no incentive for hitting a century, will he still like to play cricket. And everyone seems to know Cricket well and criticize Sehwag in this country

3. Change the draconian Laws first: The laws are required to be reformed before a strict anti-corruption law is in-acted. If you check out the rules of financing, rules of land acquisition etc. If the entrepreneur start following them as per the books, the business in India will come to a stand still. Rules might favor the established players as they have powerful lobbies and they also fund the political parties. The young entrepreneur will find it impossible to do business in India if he follows the draconian rules and not bribe his way through.

4. Crores of cases in Jan-Lokpal: If every person in India can simply write an application and get his complaint registered in Jan-lokpal how will you solve such crores of cases wnd who will monitor it ? How will you prevent people from filing wrong cases just to ridicule or blackmail the honest public servants ? The whole country is already struggling with so many pending cases in our courts. If things are pending in arbitration, it will adversely affect the growth of the country and velocity of money.


5. FDI in India: Most of the foreign direct Investment in India is nothing but the black money of Indians itself which is routed through tax heavens and is invested in fresh projects which create economic activity and employment opportunities.The tax laws in India are deterrent to a lot of growth. If people pay less tax and invest more in growth it provides compounded returns.

6. Law can not change people: Law can only create deterrent for people, it can not change people in a day.


7. Don't confuse corruption with Cop asking for money:The masses are mostly behind Jan Lokpal,specially the middle class as they feel that it will stop people in influential position abusing their power. How will you stop a cop asking for Rs 100 when actual fine is 500 and one has to wait for it in court for 5 days. You want to happily want to pay-off Rs 100 and get rid of it. If the cop is smart, you will be actually ready to pay even 500 to cop and still avoid the procedures. No law can change the way things are done in a civilized society. It takes generations to bring the change. If you change the system to no court hearing , pay 200 fine and leave. Will I have any problem in doing so ?

Everyone wants corruption free country but the question is you want anti-corruption over growth. Most honest countries might not be the most progressive or having the highest growth in the country. When India has almost half the population below poverty line, we need to ask our self, " do we need most honest country or do we need more people who are prosperous". Growth slowly tickles down and create opportunities for all. One white collar jobs lead to creation for 3 blue collar jobs. The thought is good but the timing is still a concern to me.

How to Handle Terrorism ?

Yet another bomb blast rocking the country, a lot of people died, few lost their limbs and will suffer for life because of it. Life isn't fair after all. I don't understand why do terrorist target the innocent people. Don't they have their own families ? How do they sleep in night after committing such heinous acts ? Is there any end to it?

The problem is only getting difficult with improvement of technology. Terrorists are using modern method to create panic in the society. It is very difficult to locate handful of such crack heads from millions of people. How can we handle or reduce such cowardly attacks?

1. Extra Vigilant Society: We need to be extra vigilant in crowded areas, It might look a stressful activity but  a vigilant society might reduce the number of such blasts. We need to be sure whom we are renting our hotels and flats to. We need to be careful about any unusual activity done by our co-passenger. We need to report all such activities to police at the earliest. I think its need of the hour to be extra vigilant.

2. Strict Punishment for Terrorist Activities : Make life so difficult for terrorist that they think 7 times before planning any activity. They should dread being charged for terrorism. People who support the terrorism by providing material or non material support should be be made equally liable for punishment. I dont really care about human rights activist here, We need to firstly save our human race and humanity.

3. Education: Education and knowledge improves perspective towards things, makes people more understanding and tolerant towards each other. It might not completely stop the terrorism but the more and better educated world will certainly have lessor terrorism.

4. Eradicating Poverty and inequity in society:  Somewhere or the other inequity and poverty in the society gives rise to such activities. The epicenter of such activities are mainly shabby localities where people find difficult to make a living and are lured by crime and terrorism.

5. Peaceful resolution of conflicts: Government should work with the terrorist organizations to reduce the conflicts, should peacefully resolve the problems, create jobs and employment opportunities for such people who can get healed and treated so that the poison of terrorism can be washed away from our system.

6. Reforming the antiquated systems: Some of the antiquated systems and institutions like Madarsas should be reformed and brought under clear guidelines and curriculum. These are the places where innocent peoples were systematically brain washed into believing in Jihad .

7. Better Intelligence Network and Infrastructure : Although terrorism is very difficult to curtail just by our intelligence agencies, but the way our intelligence system works, there is a huge opportunity for improvements. The whole anti-terrorism infrastructure needs to developed again. A part of money we pay as tax should be used for improving our security by investing in modern technology and infrastructure to fight terrorism.

Another Politician goes to Jail ..

Amar Singh became the new addition to the list of politician who went to judicial custody for various charges in last few months. Interestingly the whole drama of not turning up to court by showing medical reasons was strictly sorted by the court which usually does not hesitate in just giving the next hearing date. Amar Singh now have to just be happy with medical facilities of the prison. 

Mr Singh has also just added his name to the prominent list of politicians who tasted the salt of prison off-late like Mr. A.Raja, Mr. Suresh Kalmadi, Mr. Madhu Koda and Ms. Kani Modzi.   As the number of politicians going to Jail are increasing, it looks to be a positive sign for the Indian democracy. It also sends a good message to the political class that no one is untouchable when it comes to judiciary. If not in their own political term,politicians will be taken to the task once their term end for their misdeeds. So politicians should better do good things to stay away from a prison term. 

Our politicians must realize that doing corruption and escaping charges is become increasingly difficult for them as the media and use of technology is increasingly making the system more transparent.Government at times is also forced to stay away from influencing the judiciary to respect the popular sentiment of the citizens of the country. I hope it makes more politicians honest. 

Some of the question which comes to mind are how many of the politicians will finally be convicted, how much time will they stay in jail and how long will the case remain pending for judgement? I hope we witness some of the judgement in our lifetimes if not politicians.