Sunday, August 31, 2014

Governor (Justice) Sathasivan

Appointment of retired Chief Justice of India as the next Governor of Kerala deserves to be welcomed. He was a non-controversial CJI and the UPA was in power when he presided over the Court. Therefore, there could not have been any quid pro quo between him and the present ruling dispensation.

The government should move away from the unhealthy practice of appointing political persons as Governors of states. The nauseating spectacle of governors resigning with change of ruling party in the centre must stop. Governorship should cease to be a sinecure or a refuge for criminals to dodge the consequences of their past venal ways.

Friday, August 29, 2014

Jan Dhan Yojana

15 million savings accounts were opened in Indian banks on 28th August. Financial inclusion is certainly desirable. If accounts are based on targets, there is an inherent potential for misuse.

If KYC norms were too strict earlier, we are now erring on the other extreme. RBI has permitted banks to open accounts even if the depositor has provided proof only for an earlier address and the current address is only self-declared. When rules are relaxed, the probability of benami accounts increases.

What then is the incentive for opening benami accounts? Clean overdraft of Rs.5,000 per account is an invitation to aggravated bad debts. One can also open multiple accounts in different banks and get Rs.5,000 overdraft in every account.

Provision of accident and life insurance is a thoughtful step. Finance ministry deserves to be thanked for this social welfare measure the need for which was felt for a long time.

Narendra Modi, the shrewd politician, is shoring up his vote-bank through this scheme. Banks need to be extra-careful to prevent misuse of the scheme by fraudsters. It is too early to forget the IPO loan fiasco.

It is surprising that there is no dissenting voice from banks, commercial or central. Whenever there is no contradictory opinion that is openly expressed, we are seeing the beginning of some adverse development.

Added on 4th September:

It is surprising that it is not yet decided how and who will bear the premium for life insurance. It is reported that LIC is not willing to meet the cost by itself. Annual premium is expected to be around Rs.750 crore. This is a social expenditure which has to be met by the government. It is neither good politics nor healthy economics to herald a new scheme with many loose ends.

Monday, August 18, 2014

Corruption in Banks (contd.)

Writing in The Hindu, C.R.L.Narasimhan, a respected financial journalist makes the following observation:

"The usual way senior executives of government banks get into trouble is through the actions of their subordinates in which case it becomes a question of vicarious responsibility. It is likely that where the number one person actually instigated the action that leads to criminal behaviour on the part of one or more of his subordinates he will be clever enough to camouflage his own role.
That leads to the puzzling question as to why Mr. Jain was brazen enough to demand a bribe over the telephone (and that too the one which he normally uses). A person with even half the intelligence a CMD of a bank has (or presumed to have) would have a thousand other ways to ask and receive bribes if he wants to be corrupt.
It is also logical to think that the vice-chairman of a large corporate ‘negotiating’ a bribe with a senior executive of a nationalised bank would be more discreet."
The writer has subtly indicated that corrupt deals are normally transacted in a more recondite and esoteric manner so that the guilty will have easy escape routes. Those conversant with banking transactions tend to believe that corruption is very rampant.
Therefore, Narasimhan's conclusion that " However, their top executives certainly do not deserve to be tarred with the same brush just because of the alleged corrupt ways of one of them" strains our credulity.
It is more realistic to say that  honest bankers are not yet totally extinct.

Sunday, August 17, 2014

Are we Constitutionally secular and socialist?

When our Constitution was enacted, we were only a sovereign democratic republic. The 42nd Amendment to the Constitution made us 'socialist, secular'. This Amendment was initiated by Indira Gandhi for political, ulterior motives. Indira Gandhi's and her successive governments brought in many regressive steps in the name of socialism and secularism. There is a need to revisit this gross mistake.

According to Wikipedia, Hormasji Maneckji Seervai, a jurist and an eminent authority on the Constitution, severely criticized this amendment stating that the newly inserted words are "ambiguous" and "should not have been inserted in the Preamble without a reason"

Amendment to the original preamble is an extreme measure that is supposed to happen only when the system of government changes and not because it serves the narrow interests of a political party. The preamble of the Constitution as originally expressed must be reinstated. 

Socialism and secularism are defined and also manifested in different ways. Therefore, they cannot qualify a Republic. We have to unravel all government institutions that seek to promote either of these two ill-defined concepts. Proposed abolition of the Planning Commission is, therefore long overdue.

Restructuring at the RBI

Reserve Bank of India has of late issued a spate of circulars on credit restructuring. Now it is going one step further and contemplating an organisational and HR restructuring to cope with emerging economic realities. In a jargon-studded notification, the RBI says:

"The Reserve Bank has been deliberating on a broad Human Resources (HR) restructuring exercise. The purpose of the exercise has been to align the organisational resources and structures of the Bank with the needs of the domestic economy and changes in the external environment.
The proposals essentially revolve around bringing functional synergies in operations by grouping departments into clusters and also leveraging human resources to bring about greater professionalism and specialisation so as to enhance the effectiveness of the Bank’s operations and policy making. The proposals involve professionalization of HR functions in the Reserve Bank, including a more effective Performance Management System and responsive and proactive skill and leadership development programmes.
The restructuring proposals and the grouping of departments into five functional clusters have been widely discussed at various levels in the Reserve Bank. One of the proposals envisaged the creation of an additional position of a Chief Operating Officer of the rank of Deputy Governor to head one of the five functional clusters.
The proposals were discussed in the Reserve Bank’s Board meeting. The Board approved the broad contours of the proposals. It advised the Reserve Bank to operationalise the restructuring, while taking into account the need to continuously keep communication channels open with stakeholders as the process moves forward. It also asked the Reserve Bank to initiate a dialogue with the Government on the additional post of Deputy Governor and the legislative changes that will be needed. The Reserve Bank will proceed further in the matter keeping such advice in view."

The economic media have been unsparing in their observation that the RBI Governor is trying to bring in his friend and classmate, Nachiket Mor as RBI's COO. Mor could be an apt choice.

But this move raises an interesting statistical puzzle. Isn't casting the net wider a saner alternative than confining one's search to one's classmates or friends? Cronyism among regulators may not be much better than crony capitalism. One may expect Nachiket Mor who stayed away from consideration as ICICI Bank CEO to preempt the Governor's suspected move to rope him in.

Saturday, August 16, 2014

Doctor - Patient Relationship

We come across different types of doctors in our daily life. Some are quite good in diagnostic skills and very courteous in dealing with patients. Such doctors are perhaps very few in number.

Some medics are experts in diagnosis, but patient - unfriendly. Patients normally put up with them valuing them for their expertise and adjust themselves in order not to get exposed to doctors' ire.

Yet some others are patient-friendly, but unfortunately are not adept at diagnosis. Patients tolerate them if they have minor ailments and sometimes gain access to better skilled-doctors through the friendly doctor.

The fourth category is society's bane. Their diagnosis is faulty and patient-relationship adversarial.

I had the misfortune to come across such a doctor last Monday and Thursday. He is an eye-surgeon practising in Mandavelipakkam, Chennai. I accompanied a patient who had red right eye. The eye-doctor lost no time in 'diagnosing acute viral conjunctivitis'. He had a ready-made prescription on his table. He only wrote the name of the patient on the prescription and asked him to come back on Thursday for review.

When the patient visited on Thursday, the doctor insisted that it was a case of acute viral conjunctivitis. He added it was an infection and would spread unless adequate precautions were taken. He was aware that there was no problem in the left eye and that the ailment had not infected others. He continued to maintain it was viral, an infection and the affected part was conjunctiva.

The doctor orally abused the patient and warned him not to 'keep telling others' that the doctor was useless. The patient was surprised at this uncalled for warning. I confronted the doctor protesting  against wild allegation and warning. (I don't know if the doctor was getting frustrated with his inability to diagnose.) The unprofessional doctor took exception to the patient and me saying that the symptom (redness of eye) had worsened since Monday. He claimed that only doctors can comment on symptoms, as if the affected patient knows nothing about his own symptoms. Obviously, the doctor was mistaking symptom for the ailment causing the symptom.

Taken aback by the doctor's callous rudeness and un-Hippocratic behaviour, we went to another eye-doctor. This doctor examined the patient as any doctor is supposed to do and clarified that the ailment was not viral, not an infection. It was diagnosed as iritis, an inflammation of iris which surrounds the pupil of the eye. The doctor advised the patient not to use the inappropriate medicines prescribed by the other doctor. Iritis is a more serious problem than conjunctivitis (aka Madras eye).

I understood from this doctor that it is very difficult for an eye-doctor to mistake iritis for conjunctivitis. Some doctors specialise in doing the difficult !

Friday, August 15, 2014

Modi's Independence Day address

Narendra Modi's maiden independence day address is a far cry from Manmohan Singh's innumerable addresses. It was extempore. It was not soporific. It dealt with quotidian issues. There was no announcement of a new scheme named after Rajivji or Indiraji.

Expectedly, the Congress has denounced the speech. "Bogged down in pedestrian issues" claims Manish Tewari. If sanitation, safety of women and aid for the poor are 'pedestrian issues', the prime minister should continue to concentrate on such issues speech after speech. 

Saturday, August 09, 2014

Demeaning the Presidency

It is customary for politicians in power to advertise their 'achievements' periodically. The President is not supposed to be a politician looking for flattering references.

It is unfortunate that the ASSOCHAM has released an advertisement 'congratulating The President of India on Two successful years of Governance and Statesmanship' !

Rashtrapathi Bhavan should publicly disapprove such sycophantic releases.

Daughter on Manmohan Singh

"Strictly Personal" is the biography of Mr. and Mrs. Manmohan Singh written by their daughter, Daman Singh. It is but natural that the book is full of unadulterated filial compliment to the former prime minister. In an interview with The Hindu, the biographer has said,

"Basically, my father started his career as a lecturer in Punjab University. He’s never applied for any job ever since, the offers just came to him. That’s how he went to the UN, to Delhi School of Economics, to the Ministry of Foreign Trade, the Planning Commission, RBI etc etc etc. That’s how he became finance minister. That’s how he became prime minister. So, I suppose his work sort of spoke for itself."

It is not surprising that there is no reference to her father becoming Chairman of University Grants Commission through a subterfuge. As is well known and as vouchsafed by Arun Shourie and others, Manmohan Singh in a way appointed himself to head the UGC. When Chandrasekhar had already become a care-taker prime minister, Singh placed a pre-dated note to him for approving Singh's appointment as the chief of UGC. Obviously Manmohan Singh knows how to protect his personal interests. It became clear later on when he allowed his ministers to run amuck that he cared little for the nation.

Yes, Manmohan Singh is perhaps better than many other politicians. He is however not a saint. 

Law is an ass

Law is not an ordinary ass; it is an abominable ass. In the year 1989, a huge fire broke out during the celebration of Founder's Day of Tata Steel in Jamshedpur. 60 persons died in the mishap and over 100 were gravely injured.

The company deposited Rs.6.95 crore in the court as its earnest effort to compensate the families of victims. Of course, the loss was too grave to be monetarily compensated.

Criminal proceedings were initiated against company officials for negligence which led to the fire accident. The Supreme Court on 8th August quashed the criminal proceedings because the complaint was barred by limitation as it was filed three months after the offence came to the knowledge of the inspector. It is strange that criminality can be extinguished by mere lapse of time before a complaint could be lodged.

Sunday, August 03, 2014

Salman Khurshid's strange logic

Salman Khurshid is known for his perverted logic. In an interview with Times of India, he has made the following observation:

"He  (Natwar Singh) has indicated that the decision (on Volcker report regarding food for oil scam)  was hurried because he was too close to Sonia Gandhi and then fingers may point at Sonia Gandhi?

That is right. If you are close to your leader. If you are far away from your leader then there is no problem, but if you are close to your leader, what perceptions get created and therefore you have to do damage control. You can't allow if something happens and if I am seen as close to my leader, I must be dispensed with because we need to protect our leader. What are leaders there for? Leaders have to be protected, in the faith and confidence that if you are right your leader will turn around and protect you as well. If it is a choice between you and your leader, your leader must be protected first and your duty becomes to protect your leader."

It is usually said that leaders exist to protect their followers. Here the shameless follower claims with all obsequiousness at his command that followers should protect their leaders. One cannot become more slavish. Of course, Khurshid must have meant that the reference was only to Sonia Gandhi's leadership.

Saturday, August 02, 2014

Corruption in banks

S.K.Jain, Chairman and Managing Director of Syndicate Bank has been arrested on charges of corruption by CBI today (2nd August). The surprise is not that CBI has sensed bribery in Syndicate Bank. The shocking surprise is CBI's inability / unwillingness to identify corruption in so many other banks.

It is generally believed that the positions of Executive Directors and CMDs in public sector banks carry a price tag. Only those who pay a 'decent sum' to powers-that-be are promoted to such privileged positions. It is rationalised that such payments are recovered by charging speed-money from borrowers.

This is not to say that all top executives are mercenaries. A preponderant majority perhaps is. Venal politicians have an unhealthy say in bank appointments.

Friday, August 01, 2014

"Venomous" and "obsessively suspicious" Sonia Gandhi

Natwar Singh has characterised Sonia Gandhi as venomous and obsessively suspicious. In normal circumstances, 'one life is not enough'. But anyone associated with Sonia Gandhi is bound to feel that one life is more than enough. If in doubt, ask Manmohan Singh.

It is not entirely her fault that Sonia Gandhi is what she is. Undue obsequiousness of Congress leaders demeaned the party. Natwar Singh was not an exception as long as he was in the GOP. Almost all Congress leaders feathered their respective nests while continuing to pay obeisance to Her Royal Highness as an insurance to procure impunity from accountability. 

Natwar Singh asserts that Rahul's vehement resistance was responsible for Sonia Gandhi's reluctance to become the prime minister in 2004. At that time, she had claimed that she was going by her 'inner voice'. Sonia could easily have said that her inner voice supported Rahul's opinion and that her conscience was the deciding factor. But this did not occur to her because of her lifelong duplicity.

Rahul Gandhi has not yet responded to Natwar Singh's assertion. We do not know if he is now in India at all. According to Natwar Singh, Priyanka mentioned Rahul Gandhi's minatory request to his mother to stay away from prime ministership in the presence of Sonia, Manmohan, Natwar Singh and Suman Dubey. Therefore, this information obviously cannot be wrong. In the year 2004, Sonia Gandhi took the country for a ride with her histrionic and mendacious 'sacrifice'. We were as gullible as anyone could be.

Sonia Gandhi has promised to write her autobiography. Which ghost writer would oblige her in the changed circumstances? In an uncharacteristic manner, Sonia Gandhi has got openly provoked by the submission of her erstwhile confidante. Hopefully, at least now the Congress leaders would show her her place. The party and the country have suffered enough.