Warrier's blog

Letters: The cost of welfare | Business Standard Letters The issues raised in Ajay Chhibber's article "How to improve the  welfare  state"(September 28) are relevant, especially when  government policy  is going through a churn, with proposals such as re-inventing the whole planning process and fuelling hope at the ground level with promises such as providing toilets and bank accounts for all. Every elite economist and most of those who express their views in the mainstream media have an aversion to subsidies. As I am not a student of economics, I can easily define  subsidy  as a product of bad employment, income, price and wage policies. If the state is able to manage these policies with the overall welfare of the people in view, subsidy bills will come down. Policy changes should factor in, among other things, the assured opportunity for education up to 18 years of age, a minimum wage policy that ensures "living wages" for all workers, a realistic and re...

'Make in India' campaign - Moneylife The comment “Let us First Discover India and its potential. Armed with this information, we can Develop India. ” should go deep into the  thought process of planners and policy makers. India is yet to even measure the country’s resources including gold. The government should own up responsibility for not exploiting and managing nation’s resources for the welfare of the people. M G Warrier, Mumbai 

The ‘Made in India’ Problem - Moneylife Amazon CEO Jeff Preston Bezos gave an interview to Hindu Business Line which was published on September 29. My response to the published version of the interview is copied below for information and taking the debate further: “The positive approach to doing business which helps Bezos keep smiling all through is admirable and worth imbibing by any entrepreneur anywhere in the world. The $2 billion cheque brought in by Amazon is a good omen when Prime Minister Modi is inviting the world not only to do business in India but to ‘Make in India’ and do business with the rest of the world. The World Bank Group(2013) which rated India at 179 under the parameter ‘Starting Business’ in a group of 189 countries, should revisit its assessment and see how many of the countries which were positioned above India got an individual single external investment of $2 billion or above in 2014.  The assertion made by Bezos that ‘Every country in which we do busin...

Gift this book to someone who will read it The link  Banking REFORMS and CORRUPTION  or   http://freepressjournal.in/banking-reforms-and-corruption/ will help you read the review of my book “Banking, Reforms & Corruption: Development Issues in 21 st Century India” by PP Ramachandran  published in the Freepress Journal on September 14, 2014. The book published by SAMPARK, Kolkatta(samparkworld@hotmail) expresses some thoughts, which I feel, can change India. My book is available at Amazon.in Link:   M G Warrier   (Author)  Of late I am a regular contributor of articles to Moneylife and The Global ANALYST (website can be accessed at www.theglobalanalyst.co ). The following link will enable accessing several of my articles published at www.moneylife.in Other stories by Warrier If  you need any help in buying my book or my daughter  Reshmy’s book “Mirror, Mirror on the Mind…” (Under the category Contemporary Indian Engli...

India is working well for us: Amazon CEO | Business Line The positive approach to doing business which helps Bezos keep smiling all through is admirable and worth imbibing by any entrepreneur anywhere in the world. The $2 billion cheque brought in by Amazon is a good omen when Prime Minister Modi is inviting the world not only to do business in India but to ‘Make in India’ and do business with the rest of the world. The World Bank Group(2013) which rated India at 179 under the parameter ‘Starting Business’ in a group of 189 countries, should revisit its assessment and see how many of the countries which were positioned above India got an individual single external investment of $2 billion or above in 2014. The assertion made by Bezos that ‘Every country in which we do business, there are regulations. Our job is to accommodate those regulations. So, let us use it as an opportunity, instead of just complaining about it.’ should be an eye-opener for all those who grumble about...

Ajay Chhibber: How to improve the welfare state | Business Standard Column Online comments: The issues raised in the article are very relevant, especially at this point of time when government policy is undergoing a churning phase with proposals like re-inventing the whole planning process(existing structures like the Planning Commission are proposed to be demolished for rebuilding new ones) and fueling hope at the ground level with promises like providing toilets and bank accounts for all(this is a welcome improvement over bank accounts and mobiles for all). Every elite economist and most of those get space to express their views in the mainstream media have an aversion to subsidy. As I am not a student of economics, I can easily define subsidy as a product of bad employment, income, prices and wages policies. If the state is able to manage these policies with the overall welfare of the people in view, subsidy bills will come down. The policy changes should factor in, inter alia...

Exclusive interview with Daman Singh author of ‘Strictly Personal’ - The Hindu

S&P ups India's outlook to 'stable' from 'negative' - Moneylife A mainstream financial newspaper captioned today’s(September 27, 2014) editorial “Standard & Poor’s Upgrades Itself”. The international rating agencies will continue to follow ‘blow hot, blow cold’ approach to satisfy their masters. Allow me to recall my November 19, 2013 comment in response to a report: “The international rating agencies were never kind to India. The ratings have always been guided by external parameters common for the sectors irrespective of strengths and weaknesses specific to countries rated. Of late, some agencies have started openly judging India’s ‘political climate’ as also commenting on structural aspects of institutions which have evolved based on the need for economic development. High time rating agencies, or for that matter whosoever judges the performance of economies, changed their parameters to factor in the inherent strengths and weaknesses of natio...

Govt to revive 5 out of 11 sick PSUs, says Geete - Moneylife The last two decades have seen a conscious neglect of development of public sector units across sectors which have competition from private sector in India. Some of the undertakings now proposed  for closure , like HMT, were household brands during the three decades that preceded the LPG(Liberalisation-Privatisation-Globalisation) era. All these 6 units should, in the fitness of things, be  revamped  or merged with other good-working units in public/private sector, so that the infrastructure and other assets are put to optimum use, giving an opportunity for the employees to migrate to the new entities. Now GOI is going for the softer option of ‘getting rid of’ employees’ first, sale of movable assets next, followed by  transfer  of the most precious and valuable asset to private entities/individuals waiting to  make easy money . Even at this late hour, GOI should consider creating an umbrella org...

Made in India, by small enterprises - The Hindu

Modi’s target to put India in the top 50 in ‘Ease-Of-Doing-Business’ a pipedream? - Moneylife Studies and rating agencies make 'wild' comparisons. If Modi succeeds in driving in the need to compare comparables and get India ranked among nations which have population equal to, say at least equal to the most populous state of Tndia, or among nations having GDP of at least 20 per cent as much as India's or among countries having per capita geographical area equal to or less than that of India's India's ranking will be different! Read more on this in Chapter 1.1 Reforming Regulatory Environment, 'Banking, Reforms & Corruption: Development issues in 21st Century India' By M G Warrier(Published by SAMPARK, samparkworld@hotmail.com)   M G Warrier

Letters: Managing national resources | Business Standard Letters Also read the submitted version copied below: September 24,  2014 The Editor Business Standard Letters Costs, prices and profits This refers to the report “Ratan Tata for low-cost manufacturing”(September 24). The short report covers Ratan Tata’s vision about doing business in India excellently well. The Tata NANO experiment can never be considered a failure. Through NANO, Tata demystified the cost-benefit concept. The company exposed the per unit profit margins enjoyed by manufacturers of goods by factoring in high prices for luxury, comfort and the feeling that only a privileged few own certain goods. With reference to Tata’s observation that ‘We have foreign exchange reserves large enough for Indian companies to look at acquisitions of international companies to fill a product or a technology gap’, without disputing the accuracy of the statement, one would like to add that India is yet to even measure...

Mangalyaan LIVE: India creates history, reaches Mars orbit on maiden attempt Vanita Srivastava, Durga Sen Gupta and Osama Salman , Hindustan Times    New Delhi, September 24, 2014 First Published: 04:18 IST(24/9/2014) | Last Updated: 08:38 IST(24/9/2014) India created history on Wednesday, becoming the first country in the world to succeed on its first Mars mission when Isro's Mangalyaan slipped into Martian orbit after a few nail-biting moments. The country joined the United States, European Space Agency and the former Soviet Union in the elite club of Martian explorers with the Mars Orbiter Mission, affectionately called MOM.   Earlier, there were some tense moments at the Indian Space and Research Organisation (Isro), which commanded a series of tricky manoeuvres to position the spacecraft in its designated orbit around Mars. The insertion started at 4.17am when the spacecrfat switched over to the medium gain antenna for providin...

Government Banks CEOs - Moneylife Response to a comment: Such laments may give some temporary relief from the frustrated feeling the writer and the reader gets looking at the mismanagement of institutions. My guess is that the HR management is not much superior in the private sector organizations too, though some exceptions are there(Just for a diversion, please read the story “How many Bank VPs to Change a Bulb? 1000s” published in Economic Times on September 23, 2014). Such exceptions are there among public sector organizations also. In Indian situation, destroying public sector the way in which it(the destruction) is being managed by vested interests has long term negative impacts. The one and only option is to revamp public sector. The debate should be taken forward by suggesting how best this can be done.  M G Warrier

Call for alertness | Business Line Please read my letter on "Banking on relationships" published in HBL using this link. The submitted version is copied below: September 22, 2014 Editor The Hindu Business Line Letters Banking on relationship This refers to the report  “Now, SBIs education loans come with credit cards” (September 22). This is a most appropriate and welcome initiative from the country’s biggest bank and all banks should follow suit, no, not by introducing the same product, but by factoring in the need for ongoing relationship and monitoring of client’s financial health, irrespective of whether the client is a depositor or borrower. One is sadly aware that at a time when banks hate the footprints of their clients on the floors of their premises even for making deposits, maintaining a relationship between the bank and the customer is not easy. The success of efforts in this direction will depend on the willingness of the bank to see the customer as th...

I recommend this page: Heaven's bankers by Harris Irfan. You can read it on: http://freepressjournal.in/heavens-bankers-by-harris-irfan/ My online comments: Banking, for that matter any business or profession, in the present day world, is dependent on investment(deposits in the case of banks generally) and return for survival. Whether you call it interest, rent or profit-sharing, or dividend are matter of details. Conceptually ISLAMIC BANKING is a better idea, since the ingredient ‘greed’ is less in that concept. We must, more and more debate on the advantages and disadvantages of all options in doing business legally and bring in changes in legislations of each country depending on the principles of common good and national priorities. Profit should not be at the cost of the interests of the investors who are not represented in the ‘management’ of any business. The present tragedy is, legalizing corruption and corrupt practices by the rich and the powerful who capture governa...

Many dimensions to stake sale in PSUs - The Hindu

The teacher of timeless wisdom - The Hindu Excerpt from the article: All but forgotten in India, the land of his birth, but remembered widely and fondly in the West, particularly in the U.S., Easwaran, through his books, conversations and lectures, has succinctly analysed ‘life’ in its totality and illuminated for humanity the path for leading a rich, value-based life that would yield sustained happiness.

Ajay Chhibber: Stop talking about monetary policy | Business Standard Column Online comments:  Though all may not subscribe to all the arguments put forth by the author to prove that RBI’s Monetary Policy is weak as of now, the focus on need for much more Fiscal Policy support to strengthen it cannot be disputed. One wishes, authors of Fiscal policy read the concluding two paragraphs of this article which tell us that “In India we see our own excessive focus on the role of monetary policy when its impact on medium-term growth and inflation is marginal” and “India needs now to focus on genuine structural reforms: get the goods and services Act moving; build consensus on labour market reforms; ease land acquisition; supply more infrastructure; and above all reduce red tape” with crisp and clear reasons for making such observations. These suggestions are timely, as the In-house work in the Finance Ministry for Budget 2015-16 gathers momentum from the current quarter. M G...

Why Penalise the Account-holder? - Moneylife Also read: Definitely an Improvement This is with regard to “Will Narendra Modi Go after Chain-money Schemes?” by Sucheta Dalal. A comprehensive and holistic approach to financial inclusion is yet to emerge. The present initiative is definitely an improvement, if we compare with earlier efforts. Here, life cover, a conditional loan (overdraft) facility,  a credit card  and a proposal for continued relationship, which both sides will have to nurture, are factored in. Several informal and formal arrangements for credit, especially in the rural areas and among small ‘borrowers’, do not get space in the picture emerging. MG Warrier

After the review of my book “Banking, Reforms & Corruption: Development Issues in 21 st  Century India” by PP Ramachandran was published in the Freepress Journal on September 14, 2014(Link:   Banking REFORMS and CORRUPTION  ) I am getting encouraging responses from many readers. I have no words to adequately thank them, individually. As a ‘return gift’ I offer a link to some of my earlier articles published by Moneylife. Some of them, like ‘Money Grows Underground’(It is a pure joke) will be of interest to some of you who may be interested in the lighter side of finance.  Please use the following link to read my articles posted at moneylife.in Other stories by Warrier Warm regards M G Warrier

No need for a financial super-regulator | Business Line Online comments posted on September 19, 2014: The idea of creating a Unified Financial Agency for all financial regulators except RBI, truncating RBI by separating Public debt Management and keeping the agency doing that work (presumably with the same work force) in RBI premises, later UFA subsuming even RBI, all give a feeling that the FSLRC was not allowed to “apply its intelligent mind” and in the eagerness to satisfy all, and so fast, it had forgotten its own brief. Perhaps, the purpose would be served better, if the RBI is allowed to function with its present mandates, a coordination committee sorts out issues among the remaining regulators and if the government’s aim is to reduce the number of regulators, merge with RBI, the agencies outside RBI one by one, as work stabilizes. The twin goals of one Unified Financial Agency and   managing   the man-power-related issues normally emanating from structural ...

Only good governance | Business Line The Hindu Business Line, September 17, 2014 Letters This refers to the report “Public sector banks should not be seen ‘as an extension of the Govt’ ”(September 16). The ‘ownership rights’ being exercised by the finance ministry over PSUs, including statutory bodies, in a negative manner has been an issue which impacts the good governance of all organisations in the public sector. Mild protests by several stakeholders were ignored by successive governments. Even this well-argued case for PSUs to be provided a level playing field, comparable with well-managed private sector entities, may get diverted as an issue between the RBI and the Central Government. The debate being opened by Raghuram Rajan should be taken forward in the national interest. Only good governance in the public sector can handle national priorities speedily enough to catch up with the developed world; the private sector has so far been interested only in the creamy layer of the de...

Robust review before PSU bank chiefs are selected | Business Standard News Online comments posted on September 16, 2014: While the present initiative by Reserve Bank of India to make the selection process for top positions in Public Sector Banks is most welcome, this need be considered as just fire-fighing operation or ‘first-aid’. RBI should make use of this ‘opportunity’ to make GOI understand the need for better Human Resources Management in public sector organizations including statutory bodies like RBI. A thorogh review at the national level covering recruitment at various levels, career progression, talent retention, remuneration package, in-house skill-development and tenure of incumbents at top-most levels in these organisations is overdue. Finance Ministry and political leadership have been ‘enjoying’ the advantages of vacant or inefficient top positions in public sector organizations. Weakening of UTI and several other PSUs including Hindustan Machine Tools can be traced ...

Who takes the credit? - The Hindu

Rajan says banks needs to review priority sector lending categories - Moneylife The concept of priority sector lending was introduced to ensure credit flow from the banking sector to certain neglected sectors including agriculture. The need for some persuasion to encourage banking system to provide adequate credit to priority sector is still there as banks on their own would prefer to deploy credit in bigger urban ventures. Several attempts to shift responsibility by lending to service/consumer sectors, investing in RIDF etc were allowed to achieve priority sector targets. Internal reviews by RBI or at state level forums also concentrated on ‘targets’ and their achievement and a comprehensive look at willingness and capability of each bank to finance priority sector especially in rural areas is yet to happen. Viewed in this context the loud thoughts by RBI Governor is most welcome. Still, the review need to be done by RBI and GOI and appropriate guidance should be issued t...

Banking REFORMS and CORRUPTION Please read P P Ramachandran's comprehensive review of my book "Banking, Reforms & Corruption : Development Issues in 21st Century India" published in The Free Press Jornal, September 14, 2014. M G Warrier The book was published by SAMPARK, P 34, Kalindi Housing Scheme, Calcutta-700089 Price Rs250- Contact email ID; samparkworld@hotmail.com

Well begun | Business Line Online comments posted on September 12, 2014: The leadership provided by RBI in creating awareness about the role of banks in moving towards 100 per cent financial inclusion and the willingness expressed by the new government to support the initiative have helped in commendable initial success of the Pradhan Mantri Jan Dhan Yojana(JDY). JDY will definitely succeed and make a change in the future of millions who were excluded from the mainstream growth story so far, provided the responsibility is equitably shared by the banking system(both public sector and private sector banks should be made to share the burden) and central and state governments. There should be transparency in sharing of costs and providing subsidy where necessary. M G Warrier, Mumbai

Letters: Sectoral bias | Business Standard Letters Unedited version of the letter(online comments posted on September 11, 2014): September 11, 2014 The Editor Business Standard Letters Sectoral bias This refers to the article “Privatisation not a panacea for PSU banks” (September 11). This is a well articulated piece on the options before GOI for infusing efficiency into the conduct of Indian banking system. Perhaps, the example of Jan Dhan Yojana(JDY) is very relevant if one has to find out the reasons for the inefficient functioning of public sector organizations in general. The JDY which roped in 2 crore new bank accounts within days of announcement of the Yojana had the following salient features: ·          Near total dependence on public sector  banks for implementation. ·          Presuming that LIC will meet insurance cost of 750 crores or more out of its revenues. Abuse...

Shankar Acharya: The National Development Policy Commission | Business Standard Column

The illiteracy of innovation - The Hindu

Rajiv Lall: 'Minimum government, maximum governance' in public sector banks | Business Standard Column Read with Rajiv Lall's article published in BS on 11/9

Rajiv Lall: Privatisation not a panacea for PSU banks | Business Standard Column Also read Rajiv Lall's article published in BS on August 27, 2014. This is a well articulated piece on the options before GOI for infusing efficiency into the conduct of Indian banking system. Perhaps, the example of Jan Dhan Yojana(JDY) is very relevant if one has to find out the reasons for the inefficient functioning of public sector organizations in general. The JDY which roped in 2 crore new bank accounts within days of announcement of the Yojana had the following salient features: ·          Near total dependence on public sector  banks for implementation. ·          Presuming that LIC will meet insurance cost of 750 crores or more out of its revenues. Abuse of public sector organizations for achieving near-term political mileage is not a new thing. But, as asserted in the article, such misuse has a cost ...

The Hindu Business Line, September 10, 2014 Letters RBI talent hunt This refers to the report “Reserve Bank to pick talent via UPS-like test” (September 9). In the present scenario, the move to go for common-cadre of officers in RBI and making recruitment process more broad-based and professional is in the right direction. But, the hurry with which the RBI top management is trying to implement the well-intended measures may make its own path slippery. Till a decade back, RBI used to learn from its own experience and make corrections midway. The present move gives an impression that RBI has not learnt any lesson from the failure of its ‘Executive Interns’ experiment*. One option to minimize damage could be to allow the existing staff(within certain age limit and having needed qualification) to migrate to the new cadre after testing their ‘fitness’ through an appropriate evaluation. Better still would be creating a Financial Sector Service on the pattern of IAS and Tata Adm...

RBI's Consumer Charter undermined by ATM usage diktat - Moneylife

Open a Healthy Debate! - Moneylife Please read my letter published in Moneylife M G Warrier Moneylife, September 18, 2014 Letters to the editor Open a Healthy Debate! For once, India has asserted that this country has its own position on global issues that will factor in India’s interests which originate in a battery of country-specific and externally-caused situations. For decades, the compulsions of coalition politics and our dependence on external support in various sectors were being exploited by vested interests. The stance taken on the WTO deal sends out a message that India understands the ‘game’ being played by developed countries under the leadership of US. This is no occasion for celebrating ‘successful stalling of a wrong move’ or lamenting over delay in ‘clinching a deal’ which would have changed the global business environment. So far, developed countries had successfully persuaded the Indian elite to believe that subsidy is a bad word, while they thems...

Access and accountability - The Hindu

New highways to economic growth - The Hindu

Pension reforms miss the wood for the trees - The Hindu This is a thoughtful analysis of an issue which is viewed by different people depending mainly on the individual age and job profile. Having said that there is need to debate the inadequacies in the old age care and social security systems considering the alarming rate at which the population of ‘senior citizens’ is growing and the disgraceful manner in which that category is being described as a burden on the ‘working’ and ‘earning’ population. C R L Narasimhan writing in his column  Financial Scene on July 21, 2014 had referred to a response from me and said that The Hindu will revisit issues like the NPS, the method of calculating pension and the capping of the minimum wage. Seen in this perspective, the issues like inadequacy of returns on retirement savings, the unprofessional way in which funds with EPFO and NPS are managed raised here and the greedy manner in which government look at and handle funds with FPFO, LIC...

Gold management needs a makeover | Business Line This is a repeat. Posted in the context of the new scheme for interest earning gold deposits with banks being considered by major Indian banks. Please see previous Blog. M G Warrier

Tops Indian banks ponder over proposed 'Gold Deposit Account' scheme | Resource Investor Very happy to see this report. I am posting as a separate blog today(September 5, 2014) my article 'Gold management needs a makeover' published in the Hindu Business Line on April 13, 2012. M G Warrier

The man who turned the economic tide - The Hindu India was waiting for the kind of leadership Dr Raghuram Rajan and Modi are capable of providing. Both have some common qualities. Both are willing to work for the country's good. Both are good listeners. Both lead from the front. Both are willing to change course, if someone is able to convince that there are better options. In their respective fields, both have the advantage of age. Both are lucky to be at the right place at the right time. M G Warrier

Jan Dhan cover: LIC says no to premium | Business Line Online comments posted on September 5, 2014: The initial response to Jan Dhan from implementing agencies and prospective beneficiaries has been encouraging. The ‘packaging’ was attractive with bank account, a ‘credit’ card and elements of life insurance and eligibility for a small overdraft conceptually conceived as part of one financial product. It is understandable that the new government did not get enough time to refine all linkages and take into confidence all stakeholders. This does not absolve government’s responsibility to find funds for financing projects it wishes to implement. Even indirect coercion to force LIC or public sector banks to incur losses in the process of implementing schemes beneficial to society is not welcome. LIC’s dissent has to be seen in this perspective. Transparency in accounting each rupee with LIC and the depositors’ funds with banks is a must. Government should not use its ‘ownership rights’ to...

A big bang reform that may be spot on - The Hindu

VITALINFO: Raghuram Rajan’s year at the wicket : ..............Central bankers are usually judged in two ways—their track record in maintaining the value of the currency as well as the sy...

VITALINFO: Well Begun is Half Done : ............. What about Rajan' performance in areas that are exclusively the RBI's domain? Here the record is mixed. The two broa...

One year of Raghuram Rajan: A spring in his step | Business Standard News

VITALINFO: LOCAL AREA BANKS - Can Small be Beautiful? - M.G.W... : .........Writing in the Hindu Business Line (August 8, 2014) S S Tarapore made the following crisp observations about small banks and paym...