Warrier's blog

Hidden wealth* Apropos “FM: Black money info will not be shared with other agencies” (Business Standard, June 29), one is tempted to suggest that a reverse assurance that there will not be punitive measures from other enforcement agencies based on the information furnished under Income Declaration Scheme(IDS) 2016 would have given more comfort. This is because there could be legal hurdles in preventing sharing of information, in certain situations. IDS is about black money. There has to be a conscious effort to plough back into the mainstream the concealed assets hoarded in various pockets. They lie idle in the form of land, buildings, hard cash, gold and jewellery and other various forms of moveable and immoveable assets with individuals and organisations. Unless these assets are also mapped and their appreciation/depreciation watched on an annual basis, assessment of income based on potential taxpayers’ declarations will be an incomplete exercise. An audit of such assets under

Policy Watch: Why we need to talk about a basic income : In 1974, the Canadian government conducted a randomised controlled trial in Winnipeg, Dauphin and rural Manitoba. Lower-income households across the region were randomly allocated into seven... My VIEW: June 30, 2016 Real wages This refers to the article “Why we need to talk about a basic income” (The HIndu, June 30). This is a well researched, interesting article on the need for a debate on basic income keeping in view the livelihood needs of those who are not able to inherit assets or earn enough to meet current expenditure and save for periods of unemployment, by getting employed. It is comforting to see that several significant aspects of ‘living wages’ has been touched in this article by someone who can articulate the concerns before GOI and the political leadership responsible for evolving policy on such matters. At this stage of development, there is a felt need to bring some correlation between the pay, per

Protect govt servants from political attacks : The barbs directed at top economy managers could not have been worse timed. Such conduct should be made punishable... Excerpts: " All of a sudden, government servants in charge of managing the economy are under attack. Following the resignation of the RBI governor, BJP Rajya Sabha MP Subramanian Swamy has gone on the offensive against the chief economic advisor and the economic affairs secretary. It is high time ground rules are laid out and observed, on the relationship between legislators (including ministers) and government servants." My VIEW: DO NOT TWIST FACTS! Let it be known that RBI Governor Dr Raghuram Rajan has not resigned as alleged in paragraph 1 of the above article (Excerpts quoted above). Actually, in a message to RBI staff recently, Dr Rajan has asserted his intention to complete his present tenure.  M G Warrier

The makings of a theo-lingual conspiracy? : Why do we write ‘god’ with a capital ‘G’? God is a concept that stems from the human’s theological conditioning. Unlike a proper noun like Madras, Jesus, Durga, among others, god is an idea. So why... Excerpts: " Why do we write ‘god’ with a capital ‘G’? God is a concept that stems from the human’s theological conditioning. Unlike a proper noun like Madras, Jesus, Durga, among others, god is an idea. So why should it be written with a capital ‘G’?" My VIEW: Why some languages have 'capital' and 'small' letters? My language does not have capital letters.  M G Warrier

Had started ‘exposing’ Rajan since 2013, says Swamy : Rajya Sabha MP and BJP leader Subramanian Swamy has said that he had started ‘exposing... Excerpts: " ‘No degree in economics’ Of course, in 2014, when the BJP formed the government, Swamy had advised it against retaining him. Rajan is actually a B. Tech student from IIT and a management student from MIT, Swamy said, adding that Rajan doesn’t have a formal degree in economics, which is a complex subject. “I’ve been a professor of economics for almost 50 years, have taught in the best universities, and been a joint author with world-famous people of the likes of Paul Samuelson. “I know the subject; it’s a very complex one. There’s no simple rule that if you raise interest rates, prices will come down.”" Good old days... Going by his year of birth (1939), Subramanian (do not know whether he was Swamy then) would have had his post-SSLC education circa 1953-58. Those days in South India, ‘intelligent’ stude

Remains of the day: Britain’s messy EU referendum has left two fractured political parties and a deeply fissured country : To anyone who visited London in the days running up to the Brexit referendum vote on Thursday, the idea that the country would vote to leave would have been a non-starter. Bright red, white and blue... Excerpts: " Where will Britain go from here? Ardent Brexiteer and bookies’ favourite to be Prime Minister, Boris Johnson has attempted to portray this as a “glorious opportunity” for a forward-looking country seeking to forge stronger links with nations well beyond Europe’s borders. But after the vicious campaign of the past few months, the victors will struggle to shed the view that many across the world have built of them — that of a nation that had so much but chose to abandon it in favour of a xenophobic, small-island mentality." My VIEW: The message is loud and clear. This referendum will not address the basic issues it was intended to resolve. May b

Indian Banking Sector: Rejuvenation Mode* M G Warrier This decade will be marked in India’s banking history as one which has seen unprecedented changes in the financial sector both from structural and policy perspectives. The major player in the country’s financial sector, namely commercial banks, by and large, received parental care from government and the regulator (Reserve Bank of India), ever since the Reserve Bank of India Act, 1934 and the Banking Regulation Act, 1949 came into effect. The debate about the damage control in progress to save commercial banks from stressed assets (read wilful defaulters or mischievous borrowers), is trespassing all boundaries, to the extent of impairing the effectiveness of the interventions and policy initiatives from government and the regulator, that have protected the interests of savers and depositors who have been providing precious resources for banking business. Just on the eve of Finance Minister Arun Jaitley’s scheduled in

WEEKEND LIGHTER: HIJACKING COMMON SENSE! (June 25/26, 2016, No. 26/2016) Weekend Lighter is posted every Saturday @mgwarrier.blogspot.in Feel free to mail your views on this edition of WL to mgwarrier@gmail.com I Opening Remarks IMMINENT SWEXIT Perceptions on issues can differ. They depend on the constituency to which the person belongs. In public interest, all of us need to try to protect institutions, even while trying to bring back on track the individuals who stray away and try to score their points. Some of them may still continue to bark at the wrong tree. That is part of the game. We are going through interesting times. Rexit (the brand name given to Dr Rajan’s expression of intention to go back to academia once the present tenure gets over on September 4, 2016, while simultaneously telling us he will be available to the nation when needed) has done wonders. It has woken up India. The quick announcement of some reform measures, GOI’s expression of willingness t

Not deriving any benefit : Lord Krishna tells Arjuna that very few try to know Him. And among those who strive to know Him, few understand Him. “I am the means and the end,” says Krishna. “There is nothing higher than Me. There... NOT DERIVING ANY BENEFIT* Lord Krishna tells Arjuna that very few try to know Him. And among those who strive to know Him, few understand Him. “I am the means and the end,” says Krishna. “There is nothing higher than Me. There is none superior to Me.” The Lord clarifies to Arjuna, that all animate and inanimate things are like gems strung on a thread, the thread here being the Lord Himself. Just as one string holds all the beads together, so does the Lord uphold the entire universe. Once beads have been strung together, the string is no longer visible. But that does not mean that the string is not there, or that it is inferior to the beads, explained Valayapet Ramachariar in a discourse. However, while the string is present only inside the beads, the Lord is

June 23, 2016 Reining in Swamys This refers to the report “Jaitley to the rescue after Swamy targets Subramanian” (The Hindu, June 23). Dr Subramanian Swamy is trying to settle scores with a political system which didn’t reward him up to his expectations. He is a learned man with the backing of thousands of like-minded people who are disgruntled with the establishment and present government for different reasons. He is celebrating the ‘issue-based’ support he is able to command from different constituencies.  The earlier the BJP takes cognizance of this, the better for Modi government and the nation. Options before BJP are dwindling. Nomination of Dr Swamy to RS has complicated an already messed up situation. Still it may be possible to wriggle out of the impending chaos, if BJP acts now. One option at this late hour could be, telling the party’s members who hold positions in government and party to raise their differences of views with government and ministers first in par

RBI: Time to initiate changes from within?* The decision of Dr Raghuram Rajan not to continue or seek second term as governor of Reserve Bank of India (RBI) has finally ended months of speculations. However, at the same time, the way this issue was being kept alive through media, brings some other important issue of reforms within the central bank, especially the casual approach in appointing the top executives.  We should better use this opportunity to go deeper into the legacy of the RBI, which has made its top management vulnerable to public criticism. It is time we had a re-look at our own casual approach to employment at top level, especially in organisations like RBI.  Allow me to quote a paragraph from Sir Thomas Munro’s 31 December 1824 observations appearing in East India Papers (Vol iii, London 1826, quoted in Economic History of India, Romesh Dutt, CIE) to open the discussion: “Even if we could suppose that it were practicable without the aid of a single nati

Omkar Goswami: Very wrong decision… but RBI won't suffer : The Centre has messed it up with Rajan's resignation. But the RBI is too independent to kowtow to New Delhi... AN EXCELLENT PIECE ON THE 'REXIT' STORY SO FAR... M G Warrier

Warrier's blog: A V Rajwade: Recapitalising public sector banks : A V Rajwade: Recapitalising public sector banks : Privatisation or consolidation into half a dozen large banks might not rescue public sect... ORIGINAL POST DATED MARCH 17, 2016 March 17, 2016 RBI's capital This refers to A V Rajwade’s piece “Recapitalising public sector banks” (Business Standard, THE OTHER SIDE, March 17, 2016). After reading the observation “ The chart shows that RBI is an outlier with an equity share of about 32 per cent, second only to Norway and well above that of the U.S. Federal Reserve Bank and the Bank of England, whose ratios are less than 2 per cent” in the Economic Survey 2016, I was also trying to find out the extent of capital owned by RBI. RBI’s capital has remained static at Rs 5 crores since inception. Table XI.1 of the latest RBI Annual report gives the following position as regards the central bank’s reserves, which has come down from a level of 11.9 per cent (of to