Warrier's My Page, October 2012

M G Warrier’s
My Page
A monthly bulletin from M G Warrier incorporating select published letters/articles (and some stray thoughts based on what he read/saw and wrote during the month). Mailed during the last week of every month. Please send your responses and views to mgwarrier@rediffmail.com

Vol II, No 10, October 2012
M G Warrier, 2005/1-D, DREAMS, Bhandup(West), Mumbai-400078 (9349319479)



Dear Reader
From last issue, My Page is being posted on Warrier’s Blog accessible at mgwarrier.blogspot.com Links to articles and important comments are posted at the blog as and when they are published. Those esteemed readers who have difficulty in accessing blog can contact mgwarrier@rediffmail.com
Regards
M G Warrier

The following articles were published during this year so far:

1. Men in khaki did the police proud: Hindu, March 4, 2012

2. Gold management needs a makeover: Business Line, April 13, 2012

3. What ails new pension scheme: July 2012, Moneylife.in

4. Poor human resources management in public sector: July 2912, Moneylife.in

5. Corruption: A challenge for managers: August 2012, Moneylife.in

6. A finishing school for politicians: September 2012, Moneylife.in

7. Middleclass at crossroads: September 2012, Moneylife.in

8. Emerging Kerala: Submerged priorities: September 2012, Moneylife.in

9. Money grows underground: September 2012, Moneylife.in

Letters/Online comments
September 27
The statement attributed to Sibal that ‘institutions like CAG might have perhaps unwittingly, erroneously interpreted the SC judgment relating to the 2G case and thought that all natural resources must be auctioned’, is too vague and misleading. Institutions like CAG do not work on vague thoughts like this. Such statements are meant to divert attention from main issues, almost like the ‘zero loss’ theory when 2G issue came up.
On subsidy:

We must go deeper into the concept of subsidy. War efforts and elite research to quench the curiosity of developed world are subsidized by the resources which belong to the entire humanity. Under-pricing of raw materials, starvation wages paid to workers, over-ivoicing/pricing of finished products, pricing of non-existent things or natural resources based on demand and supply factors and several other games the rich and the powerful play involve subsidy in different forms. We are being fooled.


Guv post in Bank of England is getting vacant: ET editorial: Online comments
Let us look at this story in a different way. It conveys three important messages for those in charge of governance. One, for filling vacancies in the top, the exercise must start sufficiently early. Two, There should be an open mind as to whom all the selector will consider. Three, there should not be any entry barrier for someone who is confident about qualifications and feels that he/she can carry out the responsibilities expected. Four, may be, like ET is suggesting three names, any blind, duff or short-sighted person may fill in an application on behalf of someone who may be competent (The story is silent about signature!). If our people follow British system, perhaps we may not as many headless wonders as we are finding these days.

Business Line, September 27

Letters

Egg-proofing inflation

The new Chief Economic Advisor Raghuram Rajan’s argument that inflation is being fuelled by people who have become rich and are demanding food products such as milk, eggs and meat rather than cereals (Business Line, September 26) may be right theoretically, but his solution will help only the rich, in whose household budget food items have low share.

The more immediate priority should be to address the impact of price rise on the majority of Indians who spend more than 70 per cent of their earnings on food, shelter and healthcare.

M.G. Warrier

Mumbai

(This article was published on September 26, 2012)

M G Warrier, Mumbai

Online comments on Sam Pitroda’s first online Twitter Meet

Expected more from a person with good leadership track record. Catch phrases like 1.2 billion people turning to be 1.2 billion opportunities are for the gallery. Information, to be of any use, literacy has to improve. Literacy will improve, only if this 1.2 billion are able to manage hunger, health and shelter problems. There is a vested interest working against improvement of literacy and poverty alleviation. That vested interest is afraid that healthy and well-fed population will ask for a share from the cake they are building up.

Letters: What was the hurry?

Business Standard / New Delhi Sep 25, 2012, 00:15 IST

This refers to the report “FDI moves now official, no signs of reforms abating” (September 21). While appreciating the boldness shown by Manmohan Singh on a day when the support system of the United Progressive Alliance-II seemed to be collapsing, one feels that things could have been pushed with more grace. It was a bad move to make more announcements on the day on which a section of the population was already protesting against certain other policy measures.

Having waited this far, even if an endorsement from Parliament was difficult to come before implementation, the prime minister should have shown the maturity to ensure that the notifications were issued after his planned monologue to the nation. Heavens would not have fallen by a 24-hour delay.

M G Warrier, Mumbai

Business Line, September 24, 2012

End of a long association: B S Raghavan’s article on G Kasturi

Online comments:

The people of India will definitely welcome a reformed Congress rededicating itself to the ideologies for which Indian National Congress stood when Mahatma Gandhi was alive. But, though Gandhi's wish to disband Congress was not acceded to in 1947, the successive leaders especially after 1964 have ensured that the Indian National Congress survives only in the memory of veterans like B S Raghavan. If Congress accepts the challenge for introspection and correction prescribed here and bases its vision and mission on ideology and inherent strength and not on a defensive posture accusing opponents of the same deficiencies, other major political parties also will be compelled to go for drastic reforms and democratisation of functioning.

from: M G WARRIER

Posted on: Sep 21, 2012 at 18:19 IST
Online comments on PM’s monologue to the nation on reforms:
This direct channel for PM’s address to aam aadmi was always open. Even here, by opting to talk to the nation after the event, Dr Manmohan Singh gave an impression that he takes parliament and people for granted. Governance is not just about managing numbers in legislatures and giving protection to the top functionaries of government. The kind of over-confidence about post-facto legislative approvals and about aam aadmi taking everything lying down was not there during the initial years of Congress rule when the political leadership never had to worry about numbers needed to pass a bill. Though the kind of electronic media was not there, those days, PM shared his concerns and anxieties with the nation gracefully. Jawaharlal Nehru did not teach us where the money grew.
TOI commentlive email alert

THE TIMES OF INDIA

Dear Reader,

Your comment on the article ''Money grows on trees for corporate sector, says Brinda'' is now displayed on timesofindia.com.

''This is not the time for third and fourth fronts. Till UPA II is in power, in whatever formation, it is the duty of all right-thinking people, including those inside UPA and NDA to force PM to be on right track at least in relation to major policies affecting national interest. The infight within parties and fronts is doing irreperable damage to India. Unfortunately, sane politicians and a section of the media are also taking things lightly. In the anxiety to remain in power, one can understand UPA II's behaviour. What is intriguing is the casual approach of political parties which are not sharing power now and the pedestrian approach of media.''

To reply to this comment , or see the whole conversation, click here.


Thanks for sharing your thoughts, and keep up the good work!

Regards,

Team TOI
M G WARRIER (MUMBAI)

Business Line, September 24, 2012

Letters

Congress’ strategy

This refers to the article “Time to reinvent Congress political strategy” (Business Line, September 21).

The people of India will definitely welcome a reformed Congress rededicating itself to the ideologies for which the Indian National Congress stood when Mahatma Gandhi was alive.

But, though Gandhi's wish to disband the Congress was not acceded to in 1947, the successive leaders especially after 1964 have ensured that the Indian National Congress survives only in the memory of some earnest veterans.

M. G. Warrier

Mumbai

(This article was published on September 23, 2012)

TOI commentlive email alert

THE TIMES OF INDIA

Dear Reader,

Your comment on the article ''Government to handle selection of auditors for public sector banks'' is now displayed on timesofindia.com.


''It is not very clear when the shift from involving RBI in selection of auditors of PSBs (suggestion by ICAI) to ‘appointment of auditors’ by GOI happened. However, the temptation of finance ministry to centralize ownership, administration and decision of auditor in one place may not be consistent with the spirit of ICAI suggestion. Perhaps, RBI and CAG could be asked to provide a shortlist of ‘approved’ auditors for four or five zones from which PSBs could make appointments.''

To reply to this comment , or see the whole conversation, click here.


Thanks for sharing your thoughts, and keep up the good work!

Regards,

Team TOI

Online comments on appointment of PSBs auditors by GOI:
It is not very clear when the shift from involving RBI in selection of auditors of PSBs (suggestion by ICAI) to ‘appointment of auditors’ by GOI happened. However, the temptation of finance ministry to centralize ownership, administration and decision of auditor in one place may not be consistent with the spirit of ICAI suggestion. Perhaps, RBI and CAG could be asked to provide a shortlist of ‘approved’ auditors for four or five zones from which PSBs could make appointments.

On new bank licenses:
RBI should not succumb to FM’s pressure, this time also. Earlier when Chidambaram was FM, he told us that India has 100 crore population and one new bank per 2 crore population will solve problems of outreach. The concept of Local Area Banks was born. All one-time money-lenders and some NBFCs approached RBI for LAB licenses. The project LAB did not take off as people who expressed interest were mostly erstwhile money lenders or those with some interests other than banking. At present GOI and RBI should concentrate on structural reforms in the financial sector envisaged in the report of the Committee on Financial Sector Reforms (Narasimham Committee) before adding new banks.

Investment seminar at Kochi: Entry free

Moneylife Foundation with Dhanam and other sponsors is conducting an investment seminar in Kochi on Saturday, October 6, 2012.
Moneylife has requested me to forward the information.I am in Mumbai and will not be attending.
Thanks and regards
M G Warrier

TOI commentlive email alert

THE TIMES OF INDIA

Dear Reader,

Your comment on the article ''We need to contain subsidies, money doesn't grow on trees, Manmohan Singh says'' is now displayed on timesofindia.com.
''This speech could have preceded notifications. Not that it makes a big difference, as after all, trees do not grow on heaps of money either.Skipping legislative sanction in a routine manner gives an impression that PM is sure of getting post facto approvals for even very important decisions. Eight years have gone after introduction of New Pension Scheme replacing an existing social security system by an investment instrument and even today the action has not been approved by Parliament as the relative legislation is still before parliament. We are moving towards a "Notification Raj"''

To reply to this comment , or see the whole conversation, click here.


Thanks for sharing your thoughts, and keep up the good work!

Regards,

Team TOI


On gold prices:
Compared to stock market prices gold prices have remained stable for so long. There is no reason to speculate a crash. The effort here is not to encourage more import or ‘additional’ purchases by households, but to bring existing domestic gold stock to mainstream and reduce the appetite for accumulating gold jewellery stock by offering alternative ‘gold’ routes.

On HR management in government and public sector
HR management in government and public sector needs an overhaul. Deficiencies are not restricted to top level selections. Some institutions, I do not want to name any, change norms for each selection process depending on whom they want to select. To ensure efficiency and professionalism, we have to look into the inadequacies in the existing system. As for selection of CMDs and EDs, wrong selection to that level end up in costly experiments with policies of the institution. One instance is the ‘Executive interns’ experiment in RBI.
RBI to issue gold sovereign bonds to strengthen rupee

by FP Staff Sep 20, 2012

The Reserve Bank of India is planning to set up a panel to suggest a roadmap to tap into India’s gold holdings reports CNBC-TV18‘s Siddharth Zarabi.

RBI and the finance ministry have discussed various possibilities and are considering four different instruments. India’s gold holdings exceed 18,000 tonnes and have a market value of over $900 billion.

Gold bonds would help in reducing the weakness of the rupee.

The panel is expected to present its report in a couple of weeks.

On Sucheta Dalal’s tribute to V Kurien in Moneylife:
The best obit on Dr Kurien for content and use of facts befitting the context. When others were searching for anecdotes or quoting Kurien out of context, here is a brief essay without missing the essentials. This architect of Amul showed the world that the cooperatives can succeed, if proper leadership is provided. It is our failure that we did not exploit Kurien’s talent to bring professionalism in cooperatives in other geographical areas of India, even as Sreedharan’s leadership qualities are being now used. Dignity of Bharat Ratna will increase, if Kurien is honoured with it.

On Govt business for private sector banks:
This is the right message from the Finance Ministry. Private sector banks, especially the new generation banks have been concentrating only on the creamy layer of business when it comes to provision of credit and even deposit acceptance (small depositors are discouraged by various disincentives). When it comes to priority lending, they try to achieve targets by depositing funds in Rural Infrastructure Development Fund and avoid small accounts. SBI and PSBs should be compensated at least by allowing them to continue their existing share of government business.

Cartoon controversy:
This is a wider issue media also should take cognizance of and debate. Governments in power and the political parties and others who are able to silence law enforcement arms do misuse or misinterpret ‘law’ to their advantage. A cartoonist was arrested for basing his drawings on a national symbol. But, how many times tricolor is used to the advantage of political parties including Congress? Even the use of tricolor as flag by some political parties does not add respectability to National Flag.



Subsidy:
Subsidy in various forms and names exist all over the world. Linking price-management with subsidy is itself a wrong approach. Without going into the merits of the present price hike, if one dispassionately examines the link between costs and prices it would have to be conceded that while subsidy is linked to making operations economically viable, prices have to be in tandem with ground level realities. The seventh cylinder approach in pricing LPG is part of a recently invented tactic of UPA II to divide the victims of their bad policies. Now, the assumption is those who use less than 7 LPG cylinders will not join any protest.


A message from a reader on “Money grows underground” published in Moneylife
September 18, 2012
Congratulations Mr. Warrier for the beautiful and critical piece of article on “Emerging Kerala” in Money Life. It is true and I do share your thoughts to a large extent. Having born in Kerala worked in Mumbai and presently working in Bahrain ( Middle East); I could correlate your sentiments and thoughts clearly.
Having said; I am critical of few areas;
• The cost benefit analysis of ‘these’ projects (announced) for the locals and future generations;

• Does these projects turning to be a just real estate projects creating inflationary pressures?

• It is remained to be seen how many of these projects start in next few years rather than ‘Popular’ announcements.

• As indicated by the RBI Deputy Governor; Kerala also needs to capitalize the inherent strengths such as development of water ways, infrastructure (Power, roads/rail facilities) etc to be a Emerging Kerala for future.

I am sure the future Governments can only govern when they deliver to masses rather than resort to Populism and mere announcements.
Best wishes,
Abraham Jacob
On microfinance and cooperatives:

Divide and rule is the name of the game. Two decades back, just when microfinance was just a few hundreds of Self-Help-Groups, almost the same activities were being carried out on another side of the fence by cooperatives. Government and political leadership remained mere spectators when the cooperative movement was getting into wrong hands and being made a laughing stock by the entry of commercial interests into the areas which sustained the cooperatives. NABARD looked the other side and supported commercial banks and government (in the name of infrastructure). The need of the hour is an integrated approach to microfinance taking into account the existing network of cooperatives, commercial banks, NBFCs and social organisations including SHGs.

On an army veteran’s open letter to the Prime Minister
Moneylife deserves a special thanks for giving space for giving vent to feelings like this. Let us not get into details. The underlying frustration of a senior citizen about the state of affairs with particular reference to decay of governance must be addressed. The ‘open letter’ approach is the right thing. This is a wake up call for all of us. Let us take in that sense and let us not try to ‘fix’ anyone. Let the leadership-those in charge of leading government, those in charge of the four pillars of democracy- introspect and come out with suggestions for improving governance.

On CRR cut:
I am wondering, are we not putting too much pressure on Dr Subbarao by pressurizing for CRR reduction and rate cut? Some aspects like excess SLR maintained by banks, NPAs caused by mismanagement of corporates and ‘business houses’, guidance to banks to bring down Net Interest Margin(NIM), improving customer service which will result in chanelising more of household savings to banking channel, increasing direct outreach of banks to semi-urban and rural clientele and so on are concerns which are these days being addressed in inaugural speeches of seminars or some review meetings of banks. These aspects, if addressed with support from GOI and political leadership, together, will release much more funds for providing credit for economic development than a quarter percentage point reduction in CRR.

Your article on “Emerging Kerala” has been published on the Moneylife website. You can check it out by clicking on this link: http://www.moneylife.in/article/emerging-kerala-submerged-priorities/28526.html

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