Black Money and Bubbles

RBI Governor, Raghuram Rajan whose name is often mixed up as Raghuraj Raman by Manmohan Singh (Mansingh Mohan?), was recently speaking to a news channel. He expressed his well-known mantra that RBI does not want to flip- flop in administration of interest rates. Therefore, he would rather wait till softened inflation becomes sustainable before deciding to reduce the Repo rate.

This conservative strategy is not necessarily a wise strategy. In the stock exchange, one cannot time the market. Similarly, money market also does not respect timing strategies. However, given RR's standing, very few people would point out that he is without clothes even if he is naked.

He pointed out how RBI was trying to prevent formation of bubbles in real estate. He referred to insistence of a minimum stake of borrower's equity stake in purchase of house. Ceiling for debt amount and floor for equity preempts bubbles.

Usage of black money in purchase of real estate, he said, further bolstered the equity. The Governor is bold enough to accept the almost universal reality of black money in such transactions. This, of course, is not a justification of black money. The government should take some strong measures against black money. Clarion calls from the judiciary alone will not do.

Bharat Ratna: Masterly choice

The government has decided to award Bharat Ratna to Vajpayee and Madan Mohan Malavia. I am forced to mention the full name of the latter because Bharat Ratna to him was totally unexpected.

Congress, as is the unfortunate tradition in India for an opposition political party, deems it its duty to criticise each and every move of the government. But in this case, the government has been extremely clever.

MMM was the president of Congress four times. So, present day Congress leaders are unable to criticise the choice. He was also in the Hindu Mahasabha. Thus the government has shrewdly created a precedent to present what are called 'the religious right' in a positive light.

Historians like Ramchandra Guha may criticise the choice. Congress however is forced to accept the decision because otherwise it will again be ridiculed for not accepting any Congress leader save the Nehrus.

Guha's argument that there were many Indians who outshone MMM in patriotism and scholarship is beside the point because no one is above everybody else. Guha's plea that posthumous awards be avoided is worth considering.

The government, or whoever conceived the surprising idea, has cleverly exploited the coincidence of birth days of Vajpayee and MMM. In the absence of MMM's connection with Congress, leaders of the decimated party would have 'discovered' parallels between MMM and KKK.

President's health

Shri Pranab Mukherji is supposed to have undergone angioplasty in the Army hospital in the capital today. Earlier he had complained of stomach pain. Investigations in the hospital revealed blocks in an artery. Angioplasty was done without loss of time.

When the Rashtrapathi Bhavan was asked about the reports, the press secretary deigned only to clarify that the President was likely to be discharged from the hospital by Monday. He would neither deny nor confirm the reports about angioplasty. So much for transparency.

In the USA, the public is deemed entitled to know about the health of their President as a matter of routine. Of course, Indian president is only a figurehead. But still ---

Policing Corruption

Following is a report in The Hindu datelined Visakhapatnam 7th December:

"Lobbying for plum posts in important police stations began a couple of months ago. But of late, it has acquired a new dimension.

Earlier, lobbying was primarily based on caste lines.

At present, it is learnt that MLAs of various constituencies have set bid amounts for postings, depending on the importance of the police station.

On the one hand, the caste factor, the dominant being Kapus and Velamas, continues to hold sway, and, on the other, close confidantes of MLAs have been in touch with police officers, promising the desired posting for a price.

A senior officer said that he was approached by the personal assistant of an MLA for posting in a particular police station for a price of Rs. 15 lakh.

He informed The Hindu that the price varies on the income-generating capacity of the police stations.

Heading the list are Parawada, PM Palem and Pendurthi police stations, where shady land deals are on the rise due to expansion of the city limits.

Following them are the Harbour, Two Town, Three Town, Gajuwaka, Four Town, Fifth Town, and One Town police stations. The rate varies from Rs. 15 lakh to Rs. 8 lakh, says an officer.

According to an officer of Additional SP rank, the practice of lobbying for posts and the interference of politicians who desire to have his or her known officer in the native constituency is a known fact. But setting of such high stakes is something new.

He, however, wonders why police officers have to pay politicians for the postings!"

This is no news because everyone knows that this is a normal feature in every part of the country. "Auctioning" 'opportunistic' posts is a country-wide practice.

Squabbling economists

It is interesting to know how 'top class' economists rate among themselves. Raghuram Rajan accuses Paul Krugman of paranoia. To Stiglitz, the three R's namely Rogoff, Reinhart and Rajan are third-rate economists. Rogoff dismisses Stiglitz as a loose cannon. Lawrence Summers sees Rajan as a Luddite and his economic theories misguided.

Rajan does not spare non-economists also. Justice Srikrishna is, according to Rajan, schizophrenic. In turn, Justice Srikrishna finds Rajan to be a split-personality, one as an independent academic and the other as RBI Governor.

Justice Krishna Iyer

Justice V.R.Krishna Iyer who passed away today (4th December) was a legend in his lifetime itself. His compassion for the poor and the distraught was proverbial. He gave a human face to law. He made full use of his command over highfalutin words  to creatively interpret (distort, if you are not in agreement) legal provisions.

He was not without his share of controversy. He took recourse to 'democratic dharma' to grant a conditional stay to the Allahabad High Court judgment invalidating Indira Gandhi's "corrupt" election. Had he ruled otherwise, declaration of the infamous Emergency would have been non est. It is possible that he would have regretted, in later years, his out-of-the-way judgment.

He lived to complete 100 years. His demise is a great loss to whoever cares for the neglected and the forlorn. May his kind soul rest in eternal peace.