Food for thought

1.Congress spokesperson: GOI has appointed Viral Acharya as RBI Deputy Governor. He obtained 5th rank in IIT JEE in  1991. Why did GOI ignore the first four? Another case of unexplained supersession!

2. Nobel prize committee has received the nomination of Jayalalithaa for the Peace Prize. But there is a technical hitch. How can they overlook the claim of Chinnamma?

Madras High Court wakes up

A Division Bench of the Madras HC consisting of Justices S.Vaidyanathan and V.Parthiban has noted that there is suspicion about the cause of Jayalalithaa's death in Apollo Hospital. The court has castigated the central government also for not coming clean about the treatment given to the former chief minister.

Justice Vaidyanathan has bemoaned that he also has doubts about the mysterious death. A petition was filed in the High Court when Jayalalithaa was supposedly alive demanding more information from the government. That petition was dismissed by the court. Is the court waking up when it is too late?

If the judge strongly feels that there are suspicious circumstances, the judge ought to have suo-moto ordered an investigation instead of waiting for a PIL. The court's response is too little, too late.

With both state and central governments anxious to bury the suspicions about the demise, it is very likely that the court will also soft pedal the issue. Even otherwise, this is a typical case of justice delayed, justice denied.

AGMs and Board Meetings

I used to think that only shareholders' meetings are 'tamasha', but after reading minutes of Tata Sons Board Meeting sacking Cyrus Mistry, I have realised that board meetings are even more funny. It is shocking that directors rate the chairman's performance to be exemplary and within a few weeks decide to sack him even in the absence of any intervening adverse development. Most Independent Directors have shown themselves to be Ratan Tata's stooges.

Krishna Palepu, a professor at Harvard Business School, was an independent director in Satyam when the promoter, Ramalingam Raju, committed a major fraud. Apparently, the professor had no clue about Raju's shenanigans. Remarkably, the present dean of HBS, Nitin Nohria is an 'independent' director in Tata Sons Ltd. He has actively supported Ratan Tata's subterfuge. Nohria's guilt is graver than Palepu's.

Shareholders need to be careful in electing 'eminent' academics as independent directors. Is it possible that HBS would sack Nitin Nohria for his inappropriate role in Tata Sons? Is it time for HBS to prohibit its professors from becoming 'independent' directors? Isn't the reputation of HBS at stake?

Corruption in banks: Demonetisation

There were occasions earlier also to discuss corruption in banks. Post dated August 2, 2014 had this to say:

"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."

The entry of August 18, 2014 noted:

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."

The aftermath of demonetisation has brought to the fore the large-scale prevalence of bribery in banks (sadly, including the Reserve Bank of India). Axis Bank, in particular, has been shown to be extremely susceptible. There is no reason to hope that other banks are ethically more robust. Corruption in banks is rampant, endemic and disastrous. RBI and the government now have one more opportunity to test the corruption-index of various banks and to take remedial steps. However, if earlier experience is any indication, they will once again turn a nelson's eye to this toxin and carry on nevertheless.

A tamasha called 'AGM'

Some time ago, I saw a ‘Bottom Liners’ cartoon in The Hindu wherein a company’s Chairman is informing the shareholders , “I wanted to share some good news. Unfortunately I can’t seem to remember what it was.”   This triggered my desire to understand what typically goes on in the Annual General Meeting (AGM) of shareholders of a company. I attended a few AGMs and felt amply entertained.

AGM is a legal compulsion mainly for the purpose of approving audited financial statements, electing directors and appointing statutory auditors. In addition, it gives an opportunity to shareholders to get to know their company better. However, few shareholders are interested in attending the meeting save for the purpose of receiving sweet packets.

I found to my amazement that shareholders and chairpersons fall into easily noticeable stereotypes. The shareholders are classifiable into value-enhancers (or the thrifty ones), carping critics, paraphrasers (aka the filibusterers) and serial attendees.

 Chairpersons may be martinets, delegators, charmers or the nonchalant.

Value-enhancing shareholders: These thrifty shareholders are obsessed with the idea of maximising the benefits they derive from the company. They may have only five shares, but these five will be split in the names of five different members of the family. Thus they get five sweet packets. The value of these packets may be more than the quantum of dividends they get from the company. Some are so time-conscious that they leave immediately after sweets are obtained. Some others do not mind getting into the AGM hall with their big bags containing multiple sweet packets and dozing off for some time.

Carping critics: These fault-finders find the company’s annual report to be a cornucopia of information to criticize the company’s management. They mesmerize the meeting with their statistical analysis of company’s poor performance. Some of them double up as value-enhancers as noted above and they compare and contrast the market prices of sweets distributed by the instant company and other companies. There are shareholders who cavil at the choice of venue and timings of the meeting if company’s performance is not bad enough to warrant criticism. At the other extreme, there are ardent admirers of the company who praise the company for shareholder-friendliness if handsome dividends are declared and applaud the company for its emphasis on conservation of funds for growth if dividends are slashed.

Paraphrasers: These wearisome shareholders deal with the annual report para by para and figure by figure. In their desire to be comprehensive in analysis, these stodgy shareholders take the liberty of misinterpreting the figures that they don’t understand thereby causing consternation in the minds of Board members some of whom may be equally clueless about company’s performance. Some chairpersons patronize these paraphrasers because they ensure that the time available for meaningful discussion is thereby filibustered away.

Serial attendees: These are busy shareholders who have a series of AGMs to attend the same day. They do not want to deny their co-shareholders the benefit of their views. So, despite their hectic schedule, they exercise their right to speak in the AGM. Three minutes into their speech when they appear to be ready to zero in on a crucial issue, they regret their inability to continue their sagacious speech any further because they are in a hurry to attend another AGM.

Some shareholders exhibit a combination of these traits making the AGMs even more lively.

Chairpersons are an equally interesting lot. The martinet who enforces total discipline in the meeting will not brook any light-hearted comment from any shareholder. Any person pointing out some deficiency in company’s performance will be strictly warned that the company reserves the right to proceed against him for defamation. Whenever a shareholder indulges in a meandering talk or strays from inane and courteous utterings, the martinet-chairperson applies the guillotine immediately.

Delegators: If a shareholder asks an embarrassing question, the delegator-chairperson is only too quick to pass on the query to company’s secretary or some other official for their response. The chairperson proudly calls this abdication as empowerment of his officials. If the shareholder turns obstreperous, the chairman thanks him for his thoughtful remark and moves on to the next shareholder aspiring to talk.

Charmers: Charming chairmen take the sting out of any damaging remark by simply smiling it away. He is laconic in oral observations but liberal in facial expressions. Thorny shareholders will be requested by the chairman to grace his office with their presence over a cup of coffee. The charmers can disarm any disgruntled shareholder with ease.

The nonchalant chairman: Some seasoned chairmen don’t give two hoots what shareholders say. They believe that “every dog and every shareholder have their day, but every company and every chairman have their way.”

Of course, there are AGMs which are largely attended and where meaningful discussions do take place thanks to the presence of knowledgeable shareholders and responsive chair of the Board. But these are few and far between.

Jayalalithaa

Behind every demise, there is a mystery. The mystique of 'Mannargudi mafia' is behind the life and death of Jayalalithaa.

The mafia has acted as the sole protector of Jayalalithaa particularly after the latter was admitted to the Apollo hospital in September. That no one was allowed to meet Jayalalithaa had added to the mystery.

Hypothetically, it is worth analysing if the passing away of the former chief minister could help the mafia in any way. As co-accused in the criminal case pending in the Supreme Court, the case against them abates with the death of the main accused. It is also rumoured that Jayalalithaa's properties are set to devolve to the mafia.

The grip of the mafia was so strong that even the priest attending the household ('VEDA NILAYAM') is from Mannargudi. Jayalalithaa alias Komalavalli would have preferred someone from Srirangam!

It is ironic that Cho has left his mortal coils so soon after Jayalalithaa's exit that one wonders if he would advise her in the other world also. What if someone from the mafia also is there?

Tool and blunder

As an economist, Manmohan Singh could have said, "Demonetisation is an effective monetary tool and it is a blunder that it was not used by UPA" instead of mixing up loot and plunder.

Loot and plunder

Former Prime Minister Manmohan Singh spoke in the Rajya Sabha today and lambasted the government for indulging in 'organised loot and legalised plunder'. He was referring to demonetisation of high denomination notes. Of course, he knows what loot and plunder are. Did he not preside over the largest illegitimate plunder ever perpetrated by any government in India?

Larry Summers on Indian demonetisation

Larry Summers, a former US Treasury Secretary who missed a possible chairmanship of the Fed because of his politically incorrect statements on female professors, has thought it fit to comment on ongoing demonetisation of Rs.500 and Rs.1,000. [Summers had earlier infamously found "the basic, slightly lead-eyed premise of [Mr. Rajan's] paper to be misguided" with reference to Raghuram Rajan's unique prediction of global downturn. According to Summers, Rajan was a Luddite.]

Larry Summers is patronising enough to call the demonetisation move 'the most sweeping change in currency policy in the world in decades.' When the European Central Bank put an end to Euro 500 Bank notes in May, 2016 , it was widely welcomed by many economists including Summers. Euro 500 note was nicknamed 'Bin Laden' since it was the currency denomination of choice for terrorists and drug peddlers. The modus operandi adopted by ECB was different from what RBI is doing now. Euro 500 will be phased out by the end of 2018. In the meanwhile, whatever notes come back to banks will get withdrawn from circulation. A similar approach by RBI would only have ensured planned failure of its move. Summers is now seeking an end to US$ 100 notes.

Since India is deeply troubled by terrorism and black money accumulators, a long time window for conversion would have been imprudent. Naxalites and terrorists from across the border would have welcomed such a tolerant move.

Summers adds, "We recognize that many of those who hold large quantities of cash in India have come by their wealth in corrupt or illegal ways.  So, the temptation to expropriate is understandable.  After all, as the argument goes, anyone who came by their wealth legally has nothing to fear from coming forward and exchanging old notes for new ones." 
However, he also insists, "Most free societies would rather let several criminals go free than convict an innocent man.  In the same way, for the government to expropriate from even a few innocent victims who, for one reason or another, do not manage to convert their money is highly problematic.  Moreover, the definition of what is illegal or corrupt is open to debate given commercial practices that have prevailed in India for a long time." This is an argument for 'live and let live' policy very pleasing to the ears of the guilty.

It is surprising that Summers assumes that despite a two-month window for exchange of notes (lengthened by a further 3-month period for exchange directly at RBI), some 'innocent' people will lose their money. Ten days of chaotic queues in India are enough to enable the noted economist to conclude:  "We were not enthusiastic previously about the idea of withdrawing existing notes from circulation because we judged the costs to exceed the benefits. The ongoing chaos in India and the resulting loss of trust in government fortify us in this judgement."

Demonetisation is not a narrow economic measure. It has social and ethical underpinnings. If it helps in undermining the anti-social forces, be they terrorists, Maoists or black moneyed politicians and businessmen, withdrawal of high-denomination notes becomes imperative. Hopefully, the government will follow up with more measures to penalise the criminals.

Ratan Tata - Cyrus Mistry confrontation

Ratan Tata would scarcely have expected Cyrus Mistry to be of such stern stuff which the latter has exhibited in the ongoing confrontation. Mistry has dug his heels in and may go the long haul to disprove the 'Tata Magic'.

Longer the fight festers, more will be the loss to Tata's credibility. Some independent directors have started shamelessly exhibiting their loyalty to and dependency on Tatas. O.P.Bhatt and Mallika Srinivasan belong to this 'dependent independent' category. Tatas have started maligning independent directors like Nusli Wadia and Vibha Paul Rishi who are insistent on calling a spade a spade. Wadia had earlier fought against Dhirubhai Ambani (Bombay Dyeing vs Reliance) and of course lost heavily. He may lose yet again. Between Dhirubhai and Ratan, the former was more transparent about his deviousness. Wadia may be feeling the heat of nemesis visiting him. He had earlier supported Ratan Tata to unscrupulously oust Russi Mody and other stalwarts from Tata companies. What goes around comes around.

Independent directors in IHCL and Tata Chemicals were able to put their foot down on the egoistic machinations of Tatas. Independent directors in Tata Steel , some of them, lack nerves of steel. The director representing workmen sided with Ratan Tata and expectedly so.

Media observations which were initially against the unfair treatment meted out to Mistry have started softening. Ratan Tata, according to some reports, has activated his association with Niira Radia. With friends like Siva and Radia, Ratan Tata's judgment cannot but be clouded.

Tatas: an update

Ratan Tata has accused Cyrus Mistry of deviousness. Is Mistry devious because he has refused to be bullied?

Link for the 9-page letter of Tata Sons decrying Cyrus Mistry is http://www.business-standard.com/article/companies/didn-t-expect-such-deviousness-from-mistry-full-text-of-tatas-letter-116111000544_1.html

It is surprising that Ratan Tata has found fault with SEBI, Stock Exchanges and shareholders for seeking clarifications on Cyrus Mistry's 'disclosure' from the companies instead of from Mistry. This misplaced blame is another proof of Ratan Tata's hollowness. What a fall!

Brexit plus, plus

Donald Trump has achieved an unexpected victory over Hillary Clinton to become the 45th POTUS. This proves the media predictions totally wrong and is a jolt to stock markets.

How did this come about? Media's constant belligerence towards him has earned him public sympathy. People are vexed with political culture and have voted for a rank outsider. Paranoia among workers is very strong and they have caused what Trump calls a Brexit plus, plus.

Trump as President is likely to be different from the cantankerous candidate that he has been. Republican majority in both Houses will make it unnecessary for him to be bellicose. His deputy, Mike Pence is said to be a seasoned politician and therefore there may not be too many faux pas. Given Trump's freakish behaviour, it is also possible that he may voluntarily step down after a couple of years and enable Pence to be President.

His election was unpredictable. His possible contribution as President as of now may also be unpredictable. It is unlikely though that he will fare worse than his predecessors.

Added on November 10th: It is noteworthy that markets recovered fast after a brief crash. People have realised that President Trump is a different animal from candidate Trump. Competition sometimes vulgarises and degenerates a person whereas a position of authority may ennoble a person. Power may corrupt, but it may also elevate one. 'Crooked Hillary' must be feeling terribly let down. Domestic differences with Bill Clinton are likely to manifest.

Pathetic Ratan Tata

Santanu Chowdhury says in The Wall Street Journal: Our comments are in red:                                          

In his second letter emailed to the around 600,000 employees at India’s largest conglomerate following the news of Mr. Cyrus’s departure, Mr. Tata said “this difficult decision, made after careful and thoughtful deliberation, is one the board believes was absolutely necessary for the future success of the Tata Group.”
This is an admission that the past performance was not adversely affected by Cyrus Mistry. Future is anybody's guess. It is easy to demonise anyone by quoting future possibilities. Ratan Tata has taken on an astrologer's role. Pathetic!

“As a group, we are steadfast in our resolve to maintain the Tata culture and value system that all of us have worked so hard to nurture over the decades,” Mr. Tata’s letter said. What is this cliched term 'Tata culture'? Does it include sacking a person sans objective reasons? Does it only mean subservience to Ratan Tata?“The focus has to be on ‘leading’ rather than ‘following’,” he said. And only Ratan Tata can lead?

In the letter, Mr. Tata said he was excited by the opportunity to “maintain stability and continuity of leadership,” while also “looking forward with equal excitement to the finalization by the selection committee of a world-class leader to be the new chairman of the group.” Stability of leadership and whimsical dismissal of Chairman do not go together.

Trump stages a comeback

Donald Trump is not a sure loser anymore. He may even win though it continues to be unlikely. What was considered impossible has now become only improbable. Hillary Clinton must be worried. She deserves to be.

Media and Markets are overwhelmingly against Trump. The former do not want their prediction to go wrong. The latter do not want to face the uncertainty of a new ideological face at the White House. There is near unanimity among the voters that whoever wins, the loser is the American voter.

In the unlikely event of neither candidate winning 270 electoral votes (because there are two independent candidates also in the fray), the electoral process may be repeated offering an opportunity to wash more dirty linen in public. It is also possible that voters may utilise the additional time to come to a better decision.

Global allergy towards Trump is misplaced given that the alternative is equally or more corrupt and immoral. Bill Clinton in the last one year of his presidency is said to have exhibited bizarre behaviour. Hillary Clinton may do it sooner. Americans do not deserve this fate. ISIS should be happy.

Cracks in the Bombay House

Cyrus Mistry's letter / email to Tata Sons board subsequent to his ouster from chairmanship contains serious allegations on the lack of propriety on the part of Ratan Tata. He has alleged that Ratan Tata continued to boss over him and never allowed him to be independent. C.Sivasankaran, a friend of Ratan Tata, was granted unmerited loan by Tata Capital which turned sour. R.Venkataramanan, a protege of Ratan Tata, brought pressure on Cyrus Mistry not to reveal a corporate fraud in Air Asia. Mistry was not provided any clue at any time that his performance was poor.

It is incumbent on SEBI and stock exchanges to probe the matter fully in order to protect interests of shareholders of the group companies. Even if Mistry and Tata patch up, SEBI and others cannot abdicate their fiduciary responsibility to investing public. Obviously, all is not well in the state of Denmark.

It is becoming clear that Ratan Tata is touchy about his legacy and cannot tolerate anyone undoing it even by way of clearing the mess. His teflon image is losing its magic and his feet of clay are becoming visible.

Rumblings in Bombay House

Cyrus Mistry, Chairman of Tata Sons, has been unceremoniously shown the door. He occupied the prestigious and demanding position for less than four years whereas the Tatas are known to have faith in long-term performance.

Prima-facie, Ratan Tata has acted like Narayana Murthy of Infosys. There is of course a difference. Murthy is actually a founder of Infosys whereas Ratan Tata is only a legatee-promoter. He was not born in the family of promoters, he was adopted in. Therefore, Ratan Tata is not entitled to the extenuating psychological excuse of inability to let go of one's creation. Ratan Tata has acted like a typical psychopathic boss who can tolerate only those who do his / her bidding.

During Mistry's chairmanship, the Tata companies did perform well despite tough circumstances. Ratan Tata knows only too well how stormy his own initial term was. Mistry has been sacked when he has just settled down and started taking tough decisions like how to manage Corus. Mistry initiated the process of disinvesting white elephants to facilitate deleveraging. A man struggling midstream needs help to swim ashore.

Ratan Tata had earlier eulogised Mistry's willingness to learn and his humility. If the latter had taken some missteps, he could have been corrected. Ratan Tata through apparent penchant for backseat driving has let down Tata shareholders. It is worth revisiting what we thought when Cyrus Mistry was anointed as Chairman:

http://srivarahan.blogspot.in/search?q=cyrus+mistry

The Succession Charade

Ratan Tata has announced that Cyrus Mistry, the son of  Pallonji Shapoorji Mistry and the brother of Noel Tata's wife, will succeed him as the chief of the Tata group. As reports go, Cyrus Mistry is a cultured gentleman who espouses humility and respect for governance. Prima facie, the choice is apt. Though only 43, Cyrus Mistry is well experienced in construction business and apparently receptive to advice from well-wishers.

Ratan Tata had earlier observed that his half-brother, Noel Tata, is not experienced enough to succeed him. The question that arises now is: Is Cyrus Mistry more experienced than Noel Tata? The answer may not be reassuring. Ratan Tata also made a mysterious remark, perhaps more philosophical than pragmatic, that Noel Tata's lack of readiness to head the Tata empire was partly his own making. This enigmatic statement gave the game-plan away.

Earlier, a 5-member committee was formed with a great deal of fanfare to do a "global search" for the successor. A world-wide search was made for more than a year only to discover that the target was in Tata's backyard. This brouhaha was, in retrospect, a deceptive ploy. Shapoorji Pallonji's family owns about 18% of Tata Sons. This family seems to have asserted its rights to manage the business empire. This is what happens in many business groups and there is nothing ethically wrong about this development.

However, what is disconcerting is the elaborate drama that was enacted to make us believe that the group was professional and mature enough to delink ownership and management completely. The search committee owes it to the Tata shareholders to inform them the rationale for the ultimate selection. There is no doubt (based on what information is available in the public domain) that Cyrus Mistry is a good choice. It is doubtful however if the committee could not have found a better choice.

Such a nasty election debate !

Trump - Clinton debates preceding the presidential election have descended to the level of street brawls where reason and logic are at a deep discount.

Three debates are over and thankfully we won't have any more of them. Normally in debates we try to find out who spoke better and who conveyed more sense. But in these T - C debates we need to find who was less nasty. It is difficult to conclude who was.

American media has been mainly anti-Trump with or without adequate reason. Hence we are unable to discern who will a better - or less bad - president. Whoever is elected will find it extremely demanding to get out of the gutter politics spawned by the indecent and sub-human debates. May the less-fit lose !

Nobel prize: Western bias?

Year after year, most Nobel awards are won by academics from the U S and Europe. This year, announcement has already been made in the fields of medicine, chemistry, physics, peace and economics. The ten awardees are British (5), French (1), Finn (1), Japanese (1), Colombian (1) and Dutch (1).

Interestingly, six of these are based in American universities teaching , doing research and of course publishing. There is no doubt that American universities are among the best. These universities can afford costly equipment which is perhaps a necessary wherewithal for high-quality work in science. In the normal course these universities should not have any edge over others in Economics. There is empirical evidence, however, that association with an American university is a necessary condition for bagging the Nobel prize in Economics. This skew is disturbing.

This is not to suggest that there is a deliberate discrimination in these awards. It could be that economists in other countries are not doing enough to catch the attention of the Nobel committee that decides.

Is the Third World all that bad?

Politicians of the First World are wont to claim that vulgarisation of politics is a defining feature of the Third World and that politeness is the hallmark of politics of the developed world. Is this claim borne out by facts?

Recently some leaders of the UKIP , the party that was at least partly responsible for the Brexit decision, exchanged blows while discussing the Brexit process. Steven Woolfe, a serious contender for the presidentship of the UKIP party, was physically floored in an altercation with another party luminary, Mike Hookem. UKIP is now conducting an election for its leadership following the resignation of Diane James who resigned in disgust after knowing that Nigel Farage, an active and articulate leader of the UKIP, had once called her a b---h.

Reacting to the attack on Woolfe, several hours later the former Ukip leader (Farage) told reporters the incident didn't make Ukip “look good”, describing it as something seen in “Third World parliaments”.

Mr Farage said: “We’re talking about a dispute that finished up physically. It never looks good. It makes us look like – you see Third World parliaments where this sort of thing happens."

In the US, the debate between contenders for presidency, Hillary Clinton and Donald Trump, eclipses the Third World politicians for its debased language and impolite conduct.

The First World is called so only because of its material progress. It is as bad as the Third World in terms of uncultured behaviour.

RBI's inflection point?

Any change in leadership of an organisation is bound to create some reorientation however mild it is. If the differences in the personalities are huge, the reorientation is likely to be stark. Are we witnessing such a development in RBI?

Raghuram Rajan and Urjit Patel may not be as different as chalk and cheese. Yet, they are not birds of the same feather. Those who were witness to the overt camaraderie between RR and UP during the monetary policy announcements are apt to suppose that Patel would follow the policy laid down by Rajan to prioritise certain measures to control inflation over uncertain steps to promote growth. Rajan was an inflation hawk and could Patel be drastically different?

On October 4th, Urjit Patel announced a 25 basis point reduction in the policy repo rate as if to prove that he has a mind of his own. He paid glowing tributes to external members of the Monetary Policy Committee (MPC) as being of 'outstanding pedigree'. Patel is as taciturn as Rajan was articulate. It is good that he is, for see what he said about the merits of MPC. "MPC members bring value and a diversion of opinion, which is what the MPC is about." Did he mean diversity of opinion? Further, if there was unanimity regarding repo rate cut, there could not have been any expression of healthy divergent thoughts.

Ashok Lavasa, the Finance Secretary, pronounced unadulterated nonsense when he welcomed the cut in repo rate as "a decision which will go down well with all sections of the economy." Does he really expect the savers to welcome reduction in deposit rates?

Rajan believed that the real policy rate (that is the difference between repo rate and CPI inflation rate ought to be between 1.5% and 2% Now the RBI has scaled it down to 1.25% to 1.5% This is sought to be justified in the background of negative interest rates being witnessed in some economies.

Central banks which have ushered in low / negative interest rate regime have no clue about what needs to be done hereafter to stimulate growth. They have been on a thoughtless slippery path. Raghuram Rajan repeatedly cautioned against such unconventional policies which would be very difficult to wind down. Urjit Patel perhaps is not convinced.

Reduced cost of borrowing will be inflationary through the aggregate demand side though its stimulatory impact on growth is uncertain. Demand for lower interest rates is addictive and we can expect more clamour for further reductions. In the meanwhile, senior citizens who depend on interest income will continue to be left in the lurch.

India's Pak policy

It is odd that India expects the world to declare its neighbour a terrorist state without itself doing so officially. It is equally strange that we want the world to impose economic sanctions against Pakistan while we continue to offer it MFN status.

Foreign policy needs to be logical and firm. Flipflops do not make a policy. Every nation in the world barring India ensures that its policy is first protective of its own interest. Any other dominant priority is misplaced.

The U S despite knowing that Pakistan is the most prolific generator of terror treats it with kid gloves. This is because the U S has to depend on Pakistan on some issues. Pakistan was protecting Osama Bin Laden and yet the U S was not willing to call Pakistan a terrorist country. Russia welcomes joint defence exercises with Pakistan for its own strategic benefit.

Since we are most vitally affected by cross-border terrorism, we have to defend ourselves muscularly. The world respects that nation which proves it is capable of defending its own interests. Let us not expect anything else from the world and get disappointed.

Stumpf stumped

John Stumpf, CEO and Chairman of Wells Fargo, was earlier a non-controversial bank executive. He was recently questioned by the U S Senate wherein Sen Elizabeth Warren found him to be a 'gutless leader'.

Wells Fargo was comparatively untainted by the banking excesses which characterised the 2008 crisis. It is now revealed that since 2009 the bank has been opening sham accounts and issuing fictitious credit cards. In effect, persons who had not requested opening of accounts were charged some fees unauthorisedly.

This fraud has been attributed to the pressure created to meet targets of individual employees. How could such an obviously egregious malpractice go on for seven years before getting outed?

Carrie Tolstedt was in charge of banking operations. She was aware of the problem. Stumpf admitted that no action was taken against her because her performance was otherwise spectacular. A similar treatment was meted out to Nick Leeson by Barings Bank because he was instrumental in generating huge profits. There is a lesson here. If supervision of performers by management becomes lax, they tend to degenerate into 'rogue' performers.

Management by targets suffers from two main weaknesses. Employees limit their performance to targets even if more is achievable. Secondly, the pressure to achieve targets may result in employees cutting corners and committing frauds.

John Stumpf is both CEO and Chairman of the board. It is moot whether combination of these two positions makes frauds more likely.

Donald Trump or Hillary Clinton ?

The presidential contest between Donald Trump and Hillary Clinton is becoming more interesting by the day. Their styles are different, their abilities vary and the only thing common between them is their low level of credibility.

Trump is a rank outsider to Washington politics whereas Clinton was born and bred in it. Trump has been a longtime businessman facing both successes and failures. He has authored books (perhaps ghost-written) conveying practical lessons for doing business. If presidency is considered as CEO-ship, there is no reason why he is not acceptable as president.

Clinton (SHillary Clinton as Nassim Nicholas Taleb derisively calls her) is a past master of politics and intrigues. Her substitution of private email for legally mandated government email while functioning as Secretary of State under President Obama was typical of her guile. Well-connected and well-funded, she is a formidable contestant. However, she is not invincible as Obama's easy victory over her in presidential primaries in 2008 had showed.

Trump is waxing proud about his health despite his over-weight. Clinton's unseemly unsteadiness in a recent function in remembrance of 9-11 has certainly created suspicions in many minds. Her critics have pounced on this ill-luck to declare that her problem is both her health and her stealth. Her normally sophisticated expressions are in striking contrast to Trump's uncouth style of making polarising comments.

It is surprising that American media is overwhelmingly in favour of Hillary Clinton. This may create some sympathy for Trump in people's mind. This is one of the reasons why sometimes underdogs ultimately prevail.

Everyone looks forward in anxious expectation to November 8th which day will  decide global destiny for the next four years.

Added on October 11: It is a pity that the choice is between a groper and a schemer. There are two more candidates in the fray namely Mr.Johnson and Dr.Stein. Johnson is a Republican, a former Governor of New Mexico, a social libertine and a fiscal conservative. He is known for his abject ignorance of anything that is not American. Stein is a doctor from Harvard University and  an espouser of Green issues. She is  a Democrat.

Quota for teachers?

A PTI report warns that HRD Ministry intends to introduce caste-based reservation in teaching positions at IIMs. This move is as shocking as it is surprising. There are great teachers in all communities and castes; institutes are desperately trying to attract them into their fold. However, to compel IIMs or for that matter any educational institution to tweak their selection procedures on a caste basis is short-sighted.

Persons who belong to a caste that has suffered historically from social injustice need preferential treatment to enable them to overcome social handicaps. Such students obviously need to be helped through quotas. Extending quota system to teachers,however, is a self-defeating exercise that is better not experimented with. Students belonging to any caste should not be denied the opportunity of being taught by the best teachers simply because such teachers belong to a caste that is already statistically over-represented in the teacher community. Similarly, students should not be forced to be taught by a teacher simply because the teacher is from a particular caste.

It may be politically expedient to introduce the quota system among teachers. But there is no surer way to stall or slow down the progress of future generations.

Copyrights and photocopying

In a historic (not necessarily just) judgment , the Delhi High Court has held that photocopying books is not an infringement of publishers' / authors' rights. Some activists and intellectual property lawyers are justifying this view as paramountcy of public good over private rights.

This view is debatable. Just as private rights cannot be at the cost of public good, public good also cannot be to the detriment of private rights. If there is no restraint on photocopying, publishers of books will have no incentive to continue their business. In the process, public will lose in the long run. The judge should have empathised with the publishers a little more.

Interestingly, the name of the judge who pronounced this judgment is Rajiv Sahai Endlaw.

Entitled politicians

One former Finance Minister's wife and son were summoned by investigative agencies to obtain details about some alleged criminality. Both of them have refused to visit the investigators' office and are quoting laws as to why they cannot be summoned. The lady says that being one, she can be questioned only in her house. The son says that unless he is told the subject of investigation, he will not appear.

These arguments may be technically correct. But, do they try to ensure that others are also provided similar rights? The New Indian Express has published a series of articles referring to the alleged misdemeanours of the peripatetic son.

The present government makes noise about the scams of earlier government whenever it suits them, but does not take effective steps for prosecution and punishment. It is difficult not to entertain the thought that BJP and the Congress have an implicit understanding to keep barking and avoid biting. This is not in national interest.

Bitter Sweet

Following report shows how some Harvard professors connived with the sugar industry to sugarcoat sweets:

http://time.com/4485710/sugar-industry-heart-disease-research/?xid=newsletter-brief

St.Teresa

Mother Teresa has been canonised; she was earlier awarded Bharat Ratna and Nobel Peace prize.

Despite her greatness, she was not spared by critics. Since criticism emanated from noted writers like Germaine Greer and Christopher Hitchens it gained easy currency.

Germaine Greer, a feminist of influence, was offended by Mother Teresa's unstinted opposition to abortion. Hitchens influenced by atheists like Richard Dawkins was put off by her religiosity.

Criticism was mainly about lack of modern medical facilities for the poor who were looked after by Mother Teresa and her receiving the best medical attention. This criticism was illogical because no individual however noble can afford to extend costly medical treatment to the multitude of the poor who were neglected by others before the merciful lady took them in her fold. It may be good rhetoric to argue that she loved poverty and not the poor, but it is bad reasoning.

We should be thankful that she accepted medical treatment for herself because it lengthened her life which benefited thousands of the poor and the uncared. Her aversion to abortion was a religious tenet.

To say that Mother Teresa was a fanatical fundamentalist fraud (Hitchens said so) is nothing short of a canard.

Raghuram Rajan's legacy

As Raghuram Rajan demits office today (Sept.4th), it is tempting to dwell upon his achievements and failures though it may well be argued that it is too early to know the consequences of Rajan's actions as Governor as one of the most respected central banks in the world.

He has his share of admirers and critics. But no one can contest the fact that he made RBI Governorship more visible and more audible.  His argument that the Governor had a duty to be articulate on issues economic and quasi-economic may not have many takers. However, he religiously practised what he claimed was his duty.

He focused singularly on containing inflation. The government constrained him (most probably, he loved this constraint imposed on him) by holding him accountable to the single target of 4% plus or minus 2% inflation p.a. This was manna from heaven for a monetarist like Rajan. He made it appear as if he had a cross to bear and therefore he was forced to be insouciant to the need for growth.

Rupee was tumbling when he took charge. He stabilised it through innovative FCNR schemes. However, Rajan said oftentimes that these schemes were not his idea. He created many schemes for revitalisation of stressed assets. Results of these schemes could not have delighted him. He forced more transparency on commercial banks. Dirty linen became public but was not cleaned. Rajan was attempting a Sisyphean task.

Rajan's contribution towards turning the economy around may not be obvious, at least as yet. Still his willingness to attempt some bold steps like confronting the NPA problem head-on and making the banks more transparent which were not in the radar of former Governors deserves our gratitude.

Urjit Patel as RBI Governor

Choice of Urjit Patel as the Governor of RBI is apparently appropriate. He is like Raghuram Rajan in aversion for 'excessive' inflation. He prioritises price management over growth though he would not admit / claim it so bluntly. Businessmen who are looking or interest rate reduction will be disappointed in the short run.

Rajan put the fear of God into borrowers who tried to backtrack on repayment commitments. It will be interesting to see if Patel would resist pressure from business bigwigs. The Patel community of Gujarat had produced an RBI Governor even earlier in I.G.Patel. Urjit Patel was chosen as Deputy Governor of RBI by the UPA and hence he is politically non-controversial. His academic background is formidable having studied in LSE, Oxford and Yale. However, my sense is that (a hangover from Rajan) the Governor needs luck as much as academic credentials. We have to wait and watch if circumstances would be favourable to him.

His earlier association with the Reliance group as an employee is bound, sooner or later, to set some political tongues wagging.

Brexit: Political Tantrums

Political behaviour during and after the referendum was strange. Close friends like David Cameron and Boris Johnson who had similar views for a long time fell out with each other,  Boris Johnson, a former mayor of London, becoming a fanatical Brexiteer and Cameron opposing the exit option.

There were splits in both Labour and Conservative parties in their support / opposition to the exit option. Jeremy Corbin, popular among the Labour voters but despised by the Labour MPs, was listless in his opposition to exit. His lethargy contributed to many Labour voters opting for exit. UKIP (UK Independence Party) was the only one unanimously in favour of exit. Its the then leader, Nigel Farage, insisted that if the exit proposal lost narrowly by say 48-52, there should be one more referendum. In the event, exiteers won by 51.9-48.1 and Nigel Farage did not think that fairness demanded another referendum. Surprisingly, Nigel Farage has since quit leadership of his party.

David Cameron decided to quit primeministership owning responsibility for the referendum verdict.It was widely expected that Boris Johnson would try to become the prime-minister since he was mainly instrumental in the country taking the plunge. It was also expected that his friend, Michael Gove, who campaigned equally fiercely for exit, would support Johnson. But in an act of epic betrayal, Michael Gove announced his own candidacy for Tory leadership. Johnson thereafter decided not to contest. Did Johnson realise that voting for exit was easy but executing the exit was Sisyphean? Was Johnson waiting for an excuse to disown executive responsibility for his own proposal to exit?

Johnson suffered one more ignominy. He supported the candidacy of Andrea Leadsom and made flattering comments on her 'leadership skills'. Subsequently she made some most inappropriate comment on childlessness, got ridiculed and withdrew from leadership contest. In the end, only Theresa May remained in the field and she became the prime minister.

Political tamasha did not end there. Theresa May's preference was for the country to continue in EU. However she accepted voters' verdict and made the interesting observation that 'Brexit means Brexit'. She made Boris Johnson the Foreign Secretary. Johnson had earlier commented awkwardly on many leaders including Barack Obama, Hillary Clinton and Donald Trump. "Obama is half-Kenyan and his ancestral distrust of Britain is to be expected." "Hillary Clinton looks like the sadistic nurse in a lunatic hospital." (Can one be more impolite?) "Trump is not fit for the post he is aiming at." Donald Trump has now started calling his competitor 'Hillary Rotten Clinton'. Boris Johnson is a colourful buffoon though he was a successful mayor of London.

Brexcitement

Crises normally throw up a bunch of new words. Brexit has spawned many of which Brexcitement, Bregret and Neverendum are more colourful. 'Neverendum' is already known to Canadians.

Brexcitement means excessive excitement over any event. Brexit qualifies for this because it is a story that is a heady cocktail of historical recidivism, political tantrums, economic misinterpretation and bureaucratic bungling. Each of these four misadventures is capable of landing us in immense trouble. Together they can result in a disaster.

Europe has been repeatedly torn asunder by wars, major and minor. The Religious Wars of 1618-48 proved that religious differences could destroy societies. Desire to bring about sustainable peace resulted in the Treaty of Westphalia which brought to the fore the concept of nationhood to enfeeble religious movements. First half of the twentieth century saw two World Wars with European roots caused by the urge to uphold the superiority of one nation over others. Emotive nationalism proved cataclysmic and self-defeating.

In 1951, Europeans understood the need for uniting as a group to counter the business competition from the American behemoth and also to avoid internecine conflicts among the nations in the Continent. Thus were born the European Coal and Steel Community, European Economic Community and the European Union. The EU enabled maintenance of political independence of 28 European countries even while reaping the benefits of economic union.

Globalisation was an inexorable consequence of  the realisation that nations could achieve more through cooperation and by forgoing political sovereignty over rules of trade and investment. EU facilitated growth of globalisation which inevitably led to weakening of sovereignty of nations. Dani Rodrik, a Turkish economist with Harvard University, captured this situation beautifully when he said "societies cannot be globally integrated, completely sovereign and democratic at the same time".

Something had to give way. Some EU members started wondering if they must not reemphasise the priority of national sovereignty over the spirit of globalisation. In other words, they started going back in history to recapture the Westphalian essence. This recidivism was the foundation for Brexit.

The Telegraph captures the chronology as follows:

·         1957

Treaty of Rome is signed

France, West Germany, Italy, Belgium, Luxembourg and the Netherlands, six founding members of the European Economic Community, sign the Treaty of Rome, but Britain withdraws from early talks.

1963

With its economy flagging, Britain makes its first attempt to join the Common Market but is vetoed by Charles de Gaulle. The French President accuses Britain of a “deep-seated hostility” towards the European initiative.

·         1973

Britain joins EEC

With de Gaulle out of office, Britain is allowed into the European Economic Community at last, but within a year calls for major reform of Common Agricultural Policy as well as changes in way the budget is financed.

1975: EEC Referendum

Harold Wilson’s Labour government holds a referendum over EEC membership, which splits the party but results on two thirds of British voters saying they want to stay in.

·         1983

Michael Foot defeated

Labour leader Michael Foot promises withdrawal from EEC in his election manifesto, but his party is heavily beaten by Margaret Thatcher’s Conservatives.

1984: Thatcher wins rebate

A key victory for Mrs Thatcher sees her win a “rebate” from Brussels. She had threatened to halt contributions because Britain was receiving far less in agricultural subsidies than some other members, notably France.

·         1990

Britain joins Exchange Rate Mechanism

Britain joins the Exchange Rate Mechanism, 11 years after it was set up to harmonise European countries’ financial systems before the creation of a single currency.

·         1992

Black Wednesday

In what became known as Black Wednesday, Britain is forced to withdraw from the European Exchange Rate Mechanism, after failing to stem intense currency speculation.

·         1997

Single European Currency

Britain declares it will not be joining the euro for the duration of that parliament, after the single currency fails Gordon Brown’s ‘five golden tests’.

1999: British Beef Row:

Tensions rise over France’s ban on British beef during the “mad cow” disease outbreak. France given an ultimatum from Brussels but the ban is not lifted until years later.

·         2007

The Lisbon Treaty

Gordon Brown misses a televised ceremony of leaders signing Lisbon Treaty, which hands greater powers to Brussels. The controversial treaty took two years to negotiate, after plans for an official constitution were abandoned.

·         2011

Bank levy clash

David Cameron clashes with Europe over plans to introduce a levy on banks and restrict London’s financial sector. The Prime Minister promises to bring back powers from Brussels.

·         2013

Cameron makes referendum pledge

David Cameron promises an “In-Out” referendum if he wins the 2015 general election, which he does. He reiterates his manifesto commitment to hold a referendum before the end of 2017.

2016 Feb:

EU Referendum deal:

David Cameron negotiates “new EU deal” for UK after 30 hours of talks but has to make series of concessions. The Prime Minister then announces the referendum will be held on June 23.

2016: June 23

In a close-run vote, the British public decides to exit the European Union. An emotional David Cameron resigns as prime minister the next day.

  

Sundaram Finance AGM

This year's AGM of Sundaram Finance Ltd. was held on July 22nd. The meeting was unusually and even indecently vituperative.

The Chairman did not think it necessary to introduce the members of the Board despite a reminder from a shareholder. A shareholder, Mr. R.Sivakumar, was on the offensive from the word go. He took up cudgels on behalf of another shareholder, Mr.Padmanabhan, who was apparently not present. Sivakumar wanted to know from the Chairman why a legal notice was sent to Padmanabhan for making insinuation about insider trading in the last AGM. He refused to accept Company Secretary's intervention on behalf of the Chairman.

Are there limits to freedom of expression in an AGM? Is the company's reputation fragile enough to be adversely affected even if a shareholder suspects (perhaps without basis) insider trading by the company's associates? Is AGM a public forum or a private meeting?

The Chairman testily responded that Sivakumar was talking 'rubbish'. Sivakumar wanted withdrawal of this 'unparliamentary' word. The chair did not budge. After exchanging some more 'unpleasantries', Sivakumar set off for another AGM. On his way out, he was confronted by another shareholder who took exception to his behaviour. Sivakumar returned to the AGM to protest what he thought was company's practice of bullying the dissenters.

As I was coming out of the meeting another shareholder told me that Ashok Leyland which held its AGM the previous day was much more liberal in distribution of sweets to shareholders !

Added on July 27: In the Minutes of the Meeting submitted to Stock Exchanges, the company has totally ignored the allegations made by shareholders.

Too big to jail / Too big to nail

Following contents explain themselves:

TOO BIG TO JAIL:
INSIDE THE OBAMA JUSTICE DEPARTMENT’S DECISION
NOT TO HOLD WALL STREET ACCOUNTABLE

REPORT PREPARED BY THE REPUBLICAN STAFF OF THE
COMMITTEE ON FINANCIAL SERVICES, U.S. HOUSE OF REPRESENTATIVES

HON. JEB HENSARLING, CHAIRMAN

114TH CONGRESS, SECOND SESSION
JULY 11, 2016

This report has not been officially adopted by the Committee on Financial Services and may not necessarily reflect the views of its Members.

                                                                 Executive Summary

 In March 2013, the Committee on Financial Services (Committee) initiated a
review of the U.S. Department of Justice’s (DOJ’s) decision not to prosecute HSBC
Holdings Plc. and HSBC Bank USA N.A. (together with its affiliates, HSBC) or any
of its executives or employees for serious violations of U.S. anti-money laundering
(AML) and sanctions laws and related offenses. The Committee’s efforts to obtain
relevant documents from DOJ and the U.S. Department of the Treasury (Treasury)
were met with non-compliance, necessitating the issuance of subpoenas to both
agencies. Approximately three years after its initial inquiries, the Committee
finally obtained copies of internal Treasury records showing that DOJ has not been
forthright with Congress or the American people concerning its decision to decline
to prosecute HSBC. Specifically, these documents show that:

 Senior DOJ leadership, including Attorney General Holder, overruled an
internal recommendation by DOJ’s Asset Forfeiture and Money Laundering
Section to prosecute HSBC because of DOJ leadership’s concern that
prosecuting the bank would have serious adverse consequences on the
financial system.
 Notwithstanding Attorney General Holder’s personal demand that HSBC
agree to DOJ’s “take-it-or-leave-it” deferred prosecution agreement deal by
November 14, 2012, HSBC appears to have successfully negotiated with DOJ
for significant alterations to the DPA’s terms in the weeks following the
Attorney General’s deadline.
 DOJ and federal financial regulators were rushing at what one Treasury
official described as “alarming speed” to complete their investigations and
enforcement actions involving HSBC in order to beat the New York
Department of Financial Services.
 In its haste to complete its enforcement action against HSBC, DOJ
transmitted settlement numbers to HSBC before consulting with Treasury’s
Office of Foreign Asset Control (OFAC) to ensure that the settlement amount
accurately reflected the full degree of HSBC’s sanctions violations.
 The involvement of the United Kingdom’s Financial Services Authority in the
U.S. government’s investigations and enforcement actions relating to HSBC,
a British-domiciled institution, appears to have hampered the U.S.
government’s investigations and influenced DOJ’s decision not to prosecute
HSBC.
 Attorney General Holder misled Congress concerning DOJ’s reasons for not
bringing a criminal prosecution against HSBC.
 DOJ to date has failed to produce any records pertaining to its prosecutorial
decision making with respect to HSBC or any large financial institution,
notwithstanding the Committee’s multiple requests for this information and
a congressional subpoena requiring Attorney General Lynch to timely
produce these records to the Committee.

 Attorney General Lynch and Secretary Lew remain in default on their legal
obligation to produce the subpoenaed records to the Committee.
 DOJ’s and Treasury’s longstanding efforts to impede the Committee’s
investigation may constitute contempt and obstruction of Congress.

 The Committee is releasing this report to shed light on whether DOJ is
making prosecutorial decisions based on the size of financial institutions and DOJ’s
belief that such prosecutions could negatively impact the economy

Does Supreme Court want deaf , dumb and blind Governors?

Supreme Court's observation in the Arunachal Pradesh judgment that the Governor must keep clear of any political horse-trading, and even unsavoury political manipulations, irrespective of the degree of their ethical repulsiveness is intriguing. Isn't Governor's role partly that of a watch dog? Should the post be reduced to a rubber stamp of the Chief Minister?

Justice Ruth Bader Ginsburg on Donald Trump

Justice Ruth Bader Ginsburg's vituperative comments on Donald Trump only proves that even evolved minds like those of supreme court judges are not free from overpowering prejudices which make them forget the role of their office. The learned judge's observations have attracted disdain from all quarters.

In allowing emotions to overwhelm her rational self, she has even downgraded the majesty of the highest court. She has since realised her folly but has stopped short of apologising to Donald Trump. Strangely, Trump's response has been measured and unemotional. An apology to the likely presidential candidate will be in order.

Ginsburg has fatally shot down the assumption that judges will be unbiased in disposal of matters before them. She has lost the right to sit in judgement over possible petitions in the supreme court involving Trump. It is remarkable that even decades of experience as a judge do not elevate the human mind into an objective faculty.

Who is the next Prime Minister of UK?

Andrea Leadsom has withdrawn from the contest for next prime minister of UK making it all but certain that Theresa May gets into the hot seat next. Boris Johnson, the buffoon, must be regretting the flattering comments he made about Andrea Leadsom.

Andrea Leadsom made some nasty observations on childlessness to show herself to be better than Theresa May who is childless. Insensitive comments do not make for a good leader.

Theresa May has ably managed the ministry of interior for six years and has proven leadership and reconciling abilities. UK must have learnt a big lesson from the Brexit referendum. It is reasonable to hope that UK's future will be brighter than what we assume now.

Conflict of interest: who is to blame?

It is argued by some that Jayant Sinha, an alumnus of IIT, Delhi and Harvard Business School and a former investment banker, was packed off from the Finance Ministry because of conflict of interest emanating from his spouse being nominated as an independent director by Infosys. Dr.Punita Kumar Sinha is an alumnus of IIT, Delhi and Wharton School.

"Conflict of interest" may well be a red herring. Jayant Sinha's shift from Finance to Civil Aviation is more likely a message to his rebellious father, Yashwant Sinha, who keeps criticising the NDA government off and on. A minister's spouse occupying a position by one's own merit should not normally be mistaken as conflict of interest.

But since Caesar's wife must be above board, it is advisable to avoid such positions. In the instant case, Infosys also needs to be blamed. The company needs to introspect and truthfully satisfy itself that the appointment would have taken place even if Jayant Sinha was not in the Finance ministry. It may not be blatant cronyism, but is cronyism nonetheless. This is a test for Infosys's much-vaunted corporate governance standards.

An open letter to Rahul Gandhi

The following was written when there were thick rumours that Rahul Gandhi was about to become the president of GOP. But he is still in no mood to take up the challenge.

                                    An open letter to Shri Rahul Gandhi

Dear Shri Rahul Gandhi,

It is widely believed that you will soon be selected as Congress president. I am avoiding words like ‘coronation’ because I fondly hope that Congress continues to be a democratic party.

You are taking over presidentship of the Grand Old Party of India at a time when the party’s fortunes are at the lowest ebb. This is a daunting challenge. Tough challenges have the knack of bringing out the best in all of us. As a concerned citizen of our country, I hope and trust that you will prove your critics totally wrong and energise the party to regain its lost splendour.

You are the fifth person from the Nehru family to become president of the Congress party. At 46, you may feel diffident because of your young age. But your great-grandfather assumed this position when he was only 40 years old. Your grandmother was 42 and your father 41 when they became party’s chief. You have been the vice president of the party from January, 2013 and therefore you are not unaware of aspirations of the party members and expectations of the public from your party.

The country now desiderates a strong national party that will fulfill the democratic requirement of an effective opposition. A party with hoary traditions like Congress owes it to the nation to be effective whether it is a ruling or an opposition party. This is possible only if the grassroot members of the party are motivated enough to place total confidence and trust in their leaders.

Belonging to the Nehru-Gandhi family is at once both an advantage and a handicap. You would have gained enormous experience with leaders around you all the time. At the same time, there will be accusations that you are only a beneficiary of crass nepotism till you prove that you are a leader in your own right. So you are starting your term as president with a blessing and a burden.

Chief of the Congress party is a potential prime minister of India. Therefore your presidentship of the party attracts nervous and expectant attention not only from the party members but also from the citizens at large. You would have learnt from the circumstances which have shaped you so far, what is in the nation’s interest and what is not.

You must assemble a team of young and experienced persons with unquestionable integrity to provide honest feedback to you. You must desist from the dangerous desire to associate with a coterie of sycophants who will tell you only what they think you want to hear.

Politics is not a part-time job. It will demand your 24 x 7 attention. Of late, Congress party has gained a worrisome reputation as an obstructionist party. If you enable the party to get rid of this negativism and start offering constructive support to the government while being eagle-eyed to notice its misdoings, you will easily convince the concerned citizens that you are the leader that the party and the country need at this crucial hour.

Wishing you all the best,

Yours expectantly,

A concerned citizen.