Sunday, March 21, 2010

Hockey in India







The World cup Hockey has given a great fillip to the sport in India. The average sports lover discovered that Hockey is alive and can be exciting. The slightly more evolved sports fan got an opportunity to see truly outstanding Hockey.

The threats by Al Qaida were psychological deterrents in the early part of the tournament. But as the tournament progressed, we saw enthusiasm picking up and the crowds in the stadium were as vociferous as possible even when India was not playing. For some inexplicable reason,Germany was a particular favourite of the crowd. In the stadium, I heard ecstatic cries of ‘Deutschland’ whenever Germany touched the ball in their matches.

The Australians were fast and skilful. The Germans displayed tremendous organization. The Brits were the surprise package. The Dutch showed power and excellent long-range passing Hockey.

The Indians played Hockey with excellent dribbling in patches. But the lack of consistency and weak technical skills did not enable them to progress to the last four. Nevertheless it was a creditable performance from the Indians.


The kids enjoyed it thoroughly and for once Hockey and not Man U became the topic of conversation for most kids. The newspapers devoted two pages everyday to the matches but on 12th when IPL started, and the tournament had reached the climax with the last four stages, I found Hockey relegated to a barely noticeable part of the sports page.

Sunday, February 21, 2010

The Second Half of Life

The excessive length of life is a phenomenon of the last hundred years. In the early twentieth century, the life expectancy of an American was around 45 years. In 2007, it was 78 years. The life expectancy of the average Japanese is 82.6 years. Today, only a handful of African countries beset by poor health services and AIDS have life expectancies of below 50.

This throws up peculiar challenges for human beings. The concept of retirement at 58 was developed when life expectancies were around 65 to 70.Now many people are left with a substantial part of their life after retirement.

Many lose their bearings once they stop working and deteriorate both physically and mentally. Indians turn to spirituality. But this is not the answer.

It was Drucker who explained that after even two decades of doing the same work, many retire on the job,much earlier than the official retirement age. With empty nests and no satisfaction from work they also find their lives meaningless. But there are people who plan their second lives.They are in a minority and will become role-models and leaders.

The second life can be of social entrepreneurship, advisory roles or community service -essentially a passion or purposeful work . But the prerequisite to a second life is starting early and taking the small, initial steps around 35.

Sunday, January 03, 2010

Management Skills and Indians

In a recent alumni meet of the engineering college that I studied in(NIT, Rourkela),we had organized a talks by alumni and external speakers. The gathering was given a jolt by Anand Pillai of HCL ( a brilliant speaker) who spoke on talent transformation.

First, his earnest call to make the degrees come with an expiry date made everyone sit up. I agree with him. Peter Drucker had a point to make on this – he said that knowledge is different from other resources because it dissipates and becomes irrelevant soon. The turbulent times that we live in ensure that the really important knowledge becomes outdated faster with rapid advances in understanding .So degrees received twenty to thirty years are probably useless from a current relevance point of view. We see this in our organizations when very senior people talk in a language that nobody else understands.

Second, Anand also mentioned that a recent Gartner research has shown major drawbacks in the Indian technical and managerial talent emanating from our cultural and educational conditioning. The top rated management skills for transformational leadership are initiative, decision-making efficiency (not accuracy) and willingness to take appropriate risks. Indians have high technical skills but register the highest gaps in the most-desired leadership skills.

Monday, December 14, 2009

Regional Poetry in India - Sparkling

The regional poetry In India is sparkling with talent and some of the sharpest voices are from women.They are breaking barriers. They speak with irony,insight and courage. Here are samples from two of them – both young and original.

Salma/Tamil
When I pull him close
And fondly nuzzle his hair,
He flinches from the touch Of my breasts and moves away
Forgetting that they had once
Processed my blood to feed his hunger
When I reach with my hand
To run my fingers through his hair —Tendrils upright like reeds on a riverbank —He pushes it away, and moves on.

Sunanda Das/Orissa/Oriya
How is it possible ?
Everything smells of your body.
Detergents have no use.
However so much as I scrub,
The odour remains.
What do I do?
How do I escape ?
I am not able to lift
My little finger.
I can do nothing
Except lie down with eyes closed
And long for that fragrance.

Organised Retail Is Getting Back

Organised retail is getting its bearings back. The astronomical rentals are down. The frenetic increases in wages are a thing of the past. The supply chain and its evils/blessings are the focus of many retailers.

Many new entrants are close to store breakeven. The mall operators are more careful in planning and design. Most important of all, the customers have slowly and imperceptibly started realizing the value of modern retail – clean dealings, convenience and a good environment to shop. The problems of the store staff apathy remain but like in evolution, the customers have begun adapting to this.

Arvind Singhal published an interesting article two weeks back in Business Standard. The malls in Saket in South Delhi have taken away customers from South Ex and GK1-just last year amongst the priciest markets in the world. The productivity in these south Delhi traditional markets is down by close to fifty per cent. It was virtually impossible to imagine this and no retailer in his senses would have dared to predict that it will happen so soon. The malls have managed to do it with the right value proposition and delivery.

Even if things are still perceived as bad, I think twenty to thirty per cent growth for more two years in a row have also made things dramatically different.

Sunday, December 13, 2009

Billions of Stars and Us

There are an estimated 140 billions of galaxies, many of them bigger than the Milky way. Each galaxy has probably hundred to four hundred billion stars. The Earth happens to be one planet in one ordinary star. The earth has millions of creatures. And the universe has been in existence for about 13.7 billion years.

Yet we think we are important. We think we have been specially created by an omniscient and omnipotent God who has sent us to this world with a special sense of purpose. He also keeps an eye on all our actions and thoughts and more interestingly he has a special interest in our kitchens and what we eat on specific days. He cares if we violate the customs defined in some old text. He cares if do not bathe and enter his abode: the temple. He loves fruits and sweets and is indifferent to vegetables.

Organised religion is curious to say the least.

Wednesday, August 05, 2009

Biases


Like most other races, Indians have plenty of biases. We have biases against people from other religions – it is very rare to meet a Hindu who is completely open and does not see Muslims with some bit of suspicion. Many of us treat people from North East as strangers. The white-skinned have always tended to see the dark complexioned as inferior. In many parts of the country, there are caste discriminations. There are stereotypes about communities, gender and age.


That is why it is so silly to see cases filed against Emran Hashmi for saying that he has been refused houses because he is a Muslim. It is completely hypocritical to profess otherwise. He has just stated the truth he has experienced. Many of us know that such instances are common.


We need to confront the ugly realities of our society and eliminate them rather than hide behind legal and political obfuscation.

Leadership Lessons From Obama


The ascent of Barrack Obama has entranced millions across the world. We find people in urban India bewitched by the rise of a black man in another country. This is true of many individuals around the world. From Kenya, through Berlin and Russia to Malaysia, we are all awash with hope and a sense of optimism through this splendid leader.

Reams have been written about him, his mixed lineage, his transcendence of race and his stupendously efficient organization of the election machinery. There have also been endless discussions about the fundamental transformation of the American society which has enabled his rise.

But the Obama phenomenon powerfully demonstrates the classic principles of leadership. These are the basics, many have chosen to forget or ignore, in the daily battle for survival and growth and some out of short-sightedness. True leadership stands on the pillars of self-awareness, managing paradoxes, authenticity, vision, and ability to fight against odds in pursuit of a dream. These have defined the paradigm of timeless and effective, long-term leadership through out history from Christ to Gandhi and Churchill.


Self-awareness: The Oracle at Delphi said Know thyself and the Indian scriptures espouse the idea of self-knowledge as being the highest form of knowledge. Socrates said, “The unexamined life is not worth living.” Obama’s first book’ Dreams of my father’, he wrote at 33, is full of extraordinary self-reflections and insight into his complex years in different countries and in the fractured American society. It is an emotional odyssey that delves into his inner life, his variegated upbringing through intense reflections. It is a voyage of self-discovery as powerful and poignant as any other.

Self-awareness is the profound and deep understanding about your strengths, your desires and your sources of energy, your wings of inspiration and your place in the world. Self-awareness enables one to resolve your paradoxes, to transcend conflicts and to become the masters of our own lives rather than slaves. As Warren Bennis puts it,” You make your life your own by understanding it.” A self-aware individual has also the courage of his convictions. This is the stepping stone to leadership.

Managing Paradoxes: We live in a complex world. The leader is tested everyday by conflicts, contrasting positions and mindsets and it is his job to manage those paradoxes and contradictions. Barrack is a true master in managing paradoxes. He is a black from working class roots who studied in the best schools. He is a Harvard lawyer who chose to be a community organizer. He is a community organizer who decided to fight for presidency without any significant experience. His grandfather was a Muslim, his father an atheist and he is a practicing Christian. He diets on asparagus and salads and has complete empathy with his repressed black brethren. He fought hard against McCain and Clinton with grace and candour. He does not compromise and yet drives his point. He manages the contradictions between black and white, democrats and republicans, and change and American founding ideals with remarkable élan.

A leader has the ability to engage with diverse viewpoints, probe the ideas sincerely and then arrive at a rational solution embracing the contrasting positions.



Authenticity: A true leader is completely authentic. Authenticity inspires trust. It is about developing your personality free of falsehoods and illusions. Obama has never flinched from confronting realities about himself and his own inner contradictions. He has gone through moments of self-doubt about his race and his choices. He has always maintained with African –Americans that he is black but has never been keen on using the color of his skin to get votes. He has not withdrawn from taking on the most difficult facts about his life like his association with Bill Ayers and Jeremiah Wright and openly talking about them to the public. He is what you see and that authenticity has led to the extraordinary trust reposed in him by people across age, race and class.

Authenticity is associated with sincerity, honesty and integrity. It is a reflection of a leader’s own self and leaders have to adapt to multiple situations without losing their identity and that is why authenticity is so important and together with the ability to manage paradoxes , enables a leader to handle complex situations and uncertainty.

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Vision: Barrack has always communicated and remained steadfast to his vision. It is a vision of hope, unity and working together. It is free of rancour and negativity. It is remarkable in its scope of appealing to the best in us. It is a brave new world without any distinctions of race, creed or origins.

This vision is forged in the reality of today, is interpreted through the existing strands of culture and is an indistinct but credible version of tomorrow. The leaders need to develop a vision and communicate it continuously.



Fighting against odds: Last, Obama stands out for being able to fight against odds in every situation. His entire life is a story of overcoming odds stacked against him by his origins, his circumstances and then in the presidential battle by the formidable Clinton machine. Along the way he fights mental demons, prejudices of his closest friends and family and battles on for a brave, new world without harbouring any self-doubt.

The media and bookshelves are full of material and literature on leadership. They emphasise communication, false significance of heritage, confidence and various other attributes. They are important but they do not make a true leader. They are the secondary characteristics of a leader. The principal pillars are these timeless principles.

Saturday, May 16, 2009

Forecasts for 2009 Elections

In less than an hour, the results of the 2009 elections will start flowing in. This is turning out to be one of the most exciting elections ever with no holds barred campaigns, shifting of course by many parties and the undercurrents of socio-economic change driving preferences.

The opinion poll forecasts went horribly wrong in 2004. The forecasts started off by giving 335 plus seats to the NDA and then towards the elections came down to 272 odd. But the seats finally were much lower and the Congress came back to power in a really unexpected comeback. The media was even more confident of the NDA victory.

The media tends to hype up the parties like BJP more ,because ideological parties tend to be more passionate in articulation of their views and in their fervor. This over a period of time before any election ,starts giving a slightly higher degree of false hope and momentum to these parties. Secondly, the silent voter, most likely of a mainstream non-ideological party, keeps a low profile and so does not go to rallies and this leads the other parties to underestimate the potential of their opposition.

The media is more circumspect this time. The psephologists are also more careful. The undercurrents suggest that the forecasts of NDTV and CNN-IBN seem to make the most sense. TN, AP, Maharashtra are going the way these exit polls have predicted and not the way the media read. This means the Congress will win about 160 plus seats and the BJP marginally lesser than 140. The UPA will be comfortably ahead.

Sunday, April 12, 2009

2009 Elections


With seven hundred million voters (possibly, two hundred million of them illiterate) and a colorful cast of leading characters, Indian elections are one of the most fascinating events of our times.

Sonia Gandhi: Sixty something Italian, widow of a Prime Minister, cannot speak Hindi clearly, represents the heart of the Hindi belt, reticent and operates by consensus.

Mayawati: Dalit woman, unsophisticated and aggressive, unmarried, narcissist and uses the administrative machinery to build huge statues for herself, weighs herself in gifts of gold on her birthdays and accumulator of wealth.

Advani: Refugee from Pakistan, erstwhile RSS member, loves Hindi movies, chief claim to fame being that he rode a truck decorated as a chariot to demolish Babri Masjid, 81 years old and using the full power of the net to promote himself.

Manmohan Singh: Ph.D. from Cambridge, economist, brilliant and honest, has had three heart surgeries, lost the only election he fought, bureaucrat extraordinaire.

Jayalalitha: Ex-film star,voluptuous, rumoured to be a special friend of the earlier Chief Minister of the state, capricious, intelligent and charismatic.

Naveen Pattnaik: Sixty year old Doon school educated son of an earlier Chief Minister, friend of Jackie Kennedy and assorted New York socialites, unmarried and honest, author of a book on Indian plants,cannot speak the language of the state he is the Chief Minister of.

Narendra Modi: Risen from RSS, Chief Minister of Gujarat during the worst communal carnage in Indian post-independence history and accused of hatred towards Muslims, demagogue and strong administrator, poster boy of Hinduvta.

Prakash Karat: Marxist ideologue , never fought an election, opposes anything American.

Mulayam Singh Yadav: Ruled the largest state in the country, wrestler and rustic, promotes film stars and socialites in the party, wears dhoti himself and master of caste politics.

Lalu Prasad Yadav: Had the gumption to make his primary school educated wife the Chief Minister of a large state, supposedly turned Indian Railways around, extraordinary talent in using humour to strengthen his position, breeds cows in his official quarters and father of nine children.

Rahul Gandhi: Son, grandson and great grandson of Prime Ministers, shy and soft-spoken, still learning the art of politics , loves bikes and dimpled, thirty-eight years old and bachelor.

Tough Times for Indian Retail

The retail industry operates on extreme efficiencies. The net margins are thin and each cost element is typically tracked closely and working capital is tightly controlled. The Indian retail is going through its baptism by fire and discovering the impact of extra costs in the system. The regulatory issues, infrastructural bottlenecks, supply chain constraints, sourcing problems and lack of economies of scale are creating inefficiencies and hence additional costs. These costs have hobbled the industry and thus have led to the turmoil the industry is in.

The infrastructure in the country is generally deplorable. The supply of power is erratic and inadequate in most places forcing the retailers to invest in extra capital equipment for power and extra costs. The roads are in a decrepit condition leading to delays and wastages during transit. This also means that within the country , the best produce cannot be transported and so large retail is not able to offer the advantages that it can in price and quality.

The supply chain infrastructure is outdated and cannot , through a system of transportation and warehousing ,offer the necessary support for large scale movement.

The regulatory framework, unlike in most countries, works against the organized retail with a plethora of antiquated rules and greedy inspectors. The industry badly needs the incentives that a fledgling sector hopes for.

There are also the costs related to real estate which continues to be expensive and scanty partly also due to opaque regulations and profusion of black money.

So the industry has stumbled even before it could walk and now the challenges need to be tackled forthwith with regulatory support, restructuring of business models and some real out-of –box thinking.

Saturday, March 28, 2009

Fashion in New India


Fashion, as we know it today, had its origins in the French empire of Louis XIV. In Paris of the seventeenth century, the ladies of Versailles outdid one another in creating and being seen in extraordinary and exclusive clothes and ‘La Mode’ and ‘Couture’ were born. To many it seems frivolous in a developing country, but fashion gives a unique peek into the social trends and the follies or the tastes of the rich.

The Indian fashion scene has changed dramatically. The fashion shows give a good glimpse into what the business is going through and what the trends are. I went to the Delhi fashion week recently and found very interesting contrasts with the fashion events five to ten years back.
The big change is that fashion is more accessible. Earlier, the shows were populated by a westernized audience in their twenties or thirties. Today, the shows attract all age groups reflecting the romance of fashion even with mature age groups.

The second change is in the models. The models earlier were all clones of their western counter parts, white, high cheek boned and skinny. Today, many of them have distinctly Indian facial profiles and dark skin.
The clothes reflect a broader change in the Indian society. The clothes are no more again poor imitation of the dresses by Armani or Gaultier or of the opulent Indian variety (the type worn by Indian royalty). They are a very clever and practical mix of both Indian and international sensibilities. They could be worn on the streets of Manhattan or Colaba. The colours are bright and bold. There are clothes in purple, burgundy and yellow as much as in black and mauve. There is also a courageous experimentation in the fabrics with jute, silk, Lycra, cotton and Nylon aiding a spirit of playfulness and dreaming.

All these changes reflect the increasing maturing and confidence of the Indians. The lack of self-esteem and a certain rootlessness are definitely disappearing. The new young designers are confident in their skin and have settled in a place for themselves and the new India in comfort and in style.

Sunday, March 15, 2009

Rian, A Song for My Son

I was so elated when my son was born and this is what I wrote when he was nine months old. What is interesting is that , I still feel the same after so many years.

Rian

Into the flickering lamp of my existence,
You glided in gently,
You created a wavering in the fabric of light and darkness,
And everything changed.

In your unquenchable thirst for life,
You seem like the energy of the Brahmaputra flowing into the sea,
You are my explosive desire to embrace the sky of hope.

And you pluck my hair like it is a bunch of flowers from divinity,
When you touch my face with your tiny, innocent fingers;
You bring the rivulets of pure water,
Of immortality and sunshine, into my life;
Nothing remains the same anymore.

And I want to fight for clean water and fresh air,
I want to jump at joy.

Who said, you are an infant, weak and dependent;
Who said, you will grow up and be like a star in the firmament of life;
To me, you already are the lone star: Rian, my son.

A Poem Dug Out

A diary is an interesting tool to rediscover your past. If you are lucky, you might even understand it a little better. Rummaging through my old diary, I came upon this poem I had written eight years back.

Holy and Grey Ganga

On the road, virgins and the rest look alike,
Sometimes the virgins weep and the others are smiling.
Sometimes the others clutch at their sad and used breasts,
And the virgins dream of riding galloping horses.
It is the strangeness of a magenta and black.

The orange of the horizon is the blood of the Aztecs,
The spires of the Kandariya Mahadev echo the cries of a tortured artisan,
And the inseparable story of joy and tragedy continues.

And in the frontier of light and darkness,
Where Gods and demons dance and caress each other,
Where the wrath of a Rama and the fury of a Ravana,
Coalesce into a tragic stab on my heart,
I look for the purple prose of your blood.

And in the forest of emotions of the earth,
In the holy and grey Ganga,
I look for my dream amid the corpses. (10th July 2001)

Tuesday, December 09, 2008

Gourmet Foods in India

Indians in a few leading cities have started taking to western gourmet foods. The market really opened up four years back when import restrictions got relaxed. Today, cheese (Cheddar and Edam being particular favourites), wine (both new world and French), extra virgin olive oils are available in quite a few places. Availability, awareness and affluence will be the critical factors in driving the business in future. The advent of fine-dine restaurants, global travel and deep engagement of the elite with western countries have helped in the spread of the gourmet foods.

There was an international exhibition on food and wine in Delhi last week. There were more than one hundred and eighty exhibitors from twenty-four countries showcasing their finest wine and other products and I am sure they did very well. This is the right point to enter India. Moet and Chandon is reaping benefits of an early entry and good publicity during its earlier entry.

I made a presentation on the gourmet food retail scenario in India in the inaugural summit of the exhibition and the delegates found it very encouraging that this huge market is opening up to quintessentially European tastes.

Caviars, truffles and foie gras are to be still accepted by the Indian palate and they are a bit too heavy for the wallet. But wine, cheese, sauces, asparagus, premium coffees, specialty meats and expensive chocolates have found their next big market, for sure. India is no stranger to gourmet foods. The Mahrajahs and Nawabs had elevated food to a fine art and used the finest spices ,ingredients and techniques for their food. The Indian tradition of hospitality and lavish formal occasions are going to be other factors helping the growth of this market.

Sunday, November 30, 2008

Blaming the Politicians


There is a lot of justifiable anger and frustration at the brazen attacks and the terrible loss of life in Mumbai. The Indian state is weak and ineffective and is not able to protect its citizens. The media and the public are pouring venom on the politicians of all hues. They are technically right because the ministers in the government are supposed to be the policy-makers and supposed to take the decisions. But they have failed to do so and on the face of it they are culpable.


But these politicians are elected by us and before we chose them we knew their capabilities and character and we chose them. They were neither expected to change overnight and nor did we think they would. So what is the point of spewing anger on them?

The politicians the society chooses are actually a reflection of the society itself. A semi-literate and caste and community ridden society will choose politicians which reflect its character and our politicians by and large are what we are .

Only a literate and economically prosperous society will tend to choose politicians that the media and the average middle-class urban Indian expects.Till we transform our society, we will live with our corrupt, venal and incompetent politicians.

This is easier said than done. Amartya Sen and Jagdish Bhagwati were arguably our brightest economists and thinkers in seventies and eighties. Amartya Sen always spoke about the importance of heath and education and Jagdish Bhagwati preached free trade. We did not listen to them. We kept following a social and economic policy framework which was based on poor thinking and vested interests.


The Indian society has to get out of its habit of taking the easy way out and feeling comfortable with mediocrity. A mix of focus on primary health services, education and free trade would have made India a different country, a better society now and given us a different kind of politician today.
This is just one example of how our inherent failings and weaknesses as a people and society are leading us to a life we do not want to accept. This is the time to reflect and change.

Wednesday, October 29, 2008

What ails Indian writing ?


The Man Booker award to Adiga is a fine statement of affirmation of Indian writing. There have been previous winners too from India. But the Indian writers who have spent bulk of their lives in India still fail to fire the imagination of readers in the world.

Their stories are engagingly told and capture a time and place perfectly well. But the themes are not universal enough to connect to everybody. The writers lack the penetrating insight of a Naipaul, who harshly throws a searchlight into our souls. They do not have the suave urbanity and haunting themes of emotional loss of a Kundera. They do not provide the searing intensity of a Coetzee or the subtle romanticizing of a Mahfouz.

I think this happens because Indians grow up in protected environments. They live within defined boundaries and fail to explore the limits of their lives in relationships and in their own internal journeys. The society also tries its best to see that any behaviour or attitude beyond its five thousand years of past is smacked hard. So when an Indian writes and tries to plumb his depths of experience , he falls short of capturing deep, eternal truths and the unvarnished realities. There are a few notable exceptions in Indian languages however.

It does not help that the country lacks a culture of reading except in a few places.

There is a long way to go for Indian writing to flourish internationally.

Tuesday, October 28, 2008

All That Additional Space !


A recent report in a financial daily says that the additional mall space in India is going to double in 2010 from the current levels. The additional availability in Bangalore, Hyderabad, Pune, NCR, Mumbai, Calcutta and Chennai is 16.2 mn sq feet in 2008. This is going to become 19.1 mn sq feet in 2009 and 32.4 mn sq feet in 2010. Does demand exist for all this space?

In the US, the first mall in the world came up in Minnesota (Southdale Shopping Centre) in 1956.Victor Gruen, a refugee from Austria, conceptualized this to provide the experience of a European city centre. He made the structure covered and air-conditioned to enable people to visit it round the year. This also helped the whites perfectly well to have a cloistered environment in the suburbs. Today, the rich whites are going back to city centres and the suburbs are getting more mixed. This is taking away the principal customer segment for the malls - the affluent, white women. The conventional mall is also facing troubled times. The US has about eleven hundred malls today and no new mall is coming up.

Contrast this with the supply situation in India- NCR alone has close to seventy malls (albeit smaller ones). A back of the envelope calculation will show that the incomes, demand and availability of space are not even remotely matched. The cities are also full of vibrant open markets and shopping complexes. No wonder, the malls are faring badly and some charge exorbitant rates to break even. But that is a suicidal game because the tenants suffer and eventually leave.

The industry now needs to have a deeper understanding of demand and supply. The viable demand is much lesser than availability and the supply of space needs to go up far more slowly.

Sunday, October 12, 2008

Who is to blame for the financial crisis ?

The conventional view is that the bankers and lenders were greedy and in their attempts to get their bonuses, went on a lending spree to unsuspecting borrowers. The Wall Street has been accused of being corrupt, stupid and irresponsible. Obama and McCain ensure that the message is repeated in every rally and sound bite.

Is this true?

The root cause of this crisis is in the sub-prime mortgages. And the fact is that the US government policies have led to this fall. Right from the days of GI bill, the government has followed a policy of encouraging home ownership at any cost, blatantly flouting sound economics. The borrower had the options of refinancing a long-term loan at his convenience for times when interests went down but staying at a fixed interest otherwise. This threw the mortgage lender into a crunch in the interest-volatile periods. In order to manage the interest fluctuations esp. after the seventies, the financial system engaged in significant financial engineering through multiple instruments.

Later, the US system encouraged loans with low interest rates and poor credit checks precisely because the risk had been parceled off though financial instruments and the players like the loan originators, brokers and banks had no risk of any bad debts. This encouraged many individuals to stretch themselves thin with low down payments, high loans, long repayment periods and the party had to collapse after the increasing realty prices became unsustainable and started going down.


Now the government and the politicians want to subsidize the system through a bailout so that the individuals who borrowed indiscriminately actually get a reprieve for their follies. As in the earlier government interventions, the solution proposed is based on self-interest rather than solving the problem. This will only ensure that the system is not cleansed fully and we live to see another day.

Global Meltdown and India

The financial meltdown has sent shockwaves throughout the world. For many Indians, it is their first exposure to how integrated the world economy has become. This is a novelty for them when the newspaper headlines are not about the shenanigans of ministers or rantings by a communal organization but what is happening to Lehman or Morgan Stanley or even ICICI.

The Indian economy remains fairly robust despite the shocks. The banking system is very conservative. There is practically no use/misuse of financial instruments which have sent the Western markets to a spin. The drivers of growth like increasing liberalization, demographic advantages, low cost skill arbitrages and technology-led productivity growth in several sectors continue as they are. The stock market of course is getting battered due to fear, panic and flight of foreign capital (which is increasingly wary of emerging market returns).The overheated sectors like realty or the businesses primarily dependent on the Western markets like IT or ITes will undergo sharp changes in their business models.

I foresee no major disruption in retail or FMCG sectors due to this financial crisis. The retail sector had anyway started undergoing its own adjustments for a few months now due to its own set of dynamics.

Individual liberty overrides group identity

  Group identity vs. individual Liberty has played an outsized role in human progress and by inference societies. After the early Greek flou...