The Infosys drama

The whistle has been blown once again in Infosys. It is alleged with recorded evidence that the CEO Salil Parekh and CFO Nilanjan Roy care two hoots for accounting niceties and they have been exhorting the Finance team to play ball. The whistle-blowers claim that the CEO has told the Finance team, "No one in the board understands accounting principles, they are happy as long as the share price is up. Those two Madrasis (Sundaram and Prahlad) and Diva (Kiran Mazumdar-Shaw) make silly points, you just nod and ignore them."

If the CEO has really said what is ascribed to him, he has no right to continue in the company. If the CEO has no respect for the board, either the CEO or the board needs to quit right away. It is easier for the company if one person departs. The term 'Madrasi' has multiple meanings. Originally it referred to a person from Madras Presidency which was a substantial part of southern India. Later on, the word started representing anyone from the Madras state (now called TamilNadu). There was a time when the north Indians would refer to anyone uncomfortable with Hindi as a Madrasi. Now that most people from the south are proficient in Hindi, this epithet has lost its linguistic meaning.

The sense in which Salil Parekh has used the term perhaps is that any person who asks an inconvenient or trivial question is a Madrasi.  Prahlad, a relative of N.R.Narayana Murthy is probably not a Madrasi since he could be from Karnataka. Since the CEO is averse to Mr.Prahlad, he may also be spoiling his relations with NRN which means that Parekh's departure is only a matter of time.

Mr.Seshasayee, a former Chair of the board, must be enjoying the fun now. He was overthrown unjustly or so it appears in retrospect. It is time for the present Chairman, Nandan Nilekani to take tough decisions. He has to explain why the board has apparently been quiet for almost a month since the whistle was blown. The audit committee has belatedly retained Shardul Amarchand Mangaldas and Co. to investigate the matter. A predictable but costly trick to buy time.

The drama taking place in a company whose promoters are justifiably known for better corporate governance is a cruel joke on the shareholders. The company's share has lost 14% of its value in the market since the news became public. Who or what is to be blamed for this? The CEO's urge to 'perform' by hook or crook or the market's expectation of sustained growth or the board's incapacity to assess how the company was faring or the 'Madrasis' ' penchant for questioning?

N.Ram's blitzkrieg

Ram has launched a blitzkrieg to retrieve P.Chidambaram from the ignominy of incarceration. A lengthy leader in The Hindu , an article in the same newspaper questioning the legality of custodial  interrogation and Ram's retweet of Kart Chidambaram's "4 Raids, 25 Summons and Custody has yielded results!" (sic) are the day's loyalty fee to PC.

Let us deal with the main arguments one by one. 1) Why pre-trial imprisonment? Is it not punishment before judgement? There are thousands of pre-trial and under-trial prisoners in India. This has not been held unlawful by the courts. PC brought pre-trial imprisonment upon himself by his execrable conduct in responding to the investigative agencies. The Hindu which did not feel the necessity for condemning arbitrary arrests and torture of innocents during the Emergency is now pleading for freedom of an allegedly corrupt former minister because he happens to be Ram's friend. When Kanimozhi and A.Raja were lodged in Tihar jail pending court hearings in the 2G case, PC found nothing wrong in the law taking its own course. (Of course, The Hindu was not in favour of their arrest also.)

2) "Custodial interrogation should be disallowed because one should not be forced to incriminate oneself." This argument is acceptable in the case of common people against whom 'third-degree methods' are possibly adopted during such interrogations. Investigative agencies dare not apply such methods where a person as well-connected as PC is involved.

3) "So many raids, so many summons and yet what has been found?" This is exactly the problem with the alleged offenders whose loyal contacts cultivated over time in many places brief them on confidential information on raids. Chidambarams are intelligent enough to throw the investigators off the scent and then ask "what have you found?" The perverted smartness of PC leaves the CBI and ED with no choice but to seek extended incarceration and custodial interrogation of the accused.

4) It is disappointing that PC is treated differently from other prisoners. How many prisoners are permitted to avail of home-made food? How many of them are allowed to meet their relatives on a daily basis?

Abhijit Banerjee's inconsistent criteria

Abhijit Vinayak Banerjee is one of the three economists honoured with the Nobel this year for adopting Randomised Controlled Trials in attempts to alleviate poverty. These trials emanated in the pharma industry and adopting them in economic studies is a trail blazer in its own way. Just like any adoption of a new methodology in any field, this transplant of a pharma idea in the economic field has attracted a lot of scepticism. But the Nobel committee thought it fit to award the prestigious prize to the pioneers in this area namely Abhijit Banerjee, Esther Duflo and Michael Kremer.

It is an opportune time for Banerjee and Duflo to market their recently published book "Good Economics for Hard Times." Any trial aims to isolate the variables which result in a particular consequence. For example, one may try to find out which variable results in faster reduction in poverty: adoption of Universal Basic Income or incentives for investment.

These trials will yield useful results only if strict criteria are made applicable to understand the cause and effect relationship. If Banerjee's recent utterances are any indication, Banerjee does not seem to apply consistent criteria. He keeps saying that high rates of income tax do not negatively impact economic growth. He arrived at this conclusion because the American economy grew at a fast pace during Dwight Eisenhower's presidency when the marginal tax rate was vertiginous at 95% (Is it not possible that other variables counterbalanced the impact of tax rates? There was no controlled study done.)

Applying the same logic, when Banerjee was asked if the NYAY proposal was an electoral failure because the Congress party which included this in its electoral campaign was comprehensively defeated, his response was disappointingly different. With an apparent self-interest (Banerjee was one of the architects of NYAY),  Banerjee claimed that there were other variables which caused the defeat of Congress at the hustings.