Reality Check India

Budget and industry moguls

Posted in Uncategorized by realitycheck on February 29, 2008

I watched several champions of industry perform on TV yesterday. They were each discussing what they want from the budget. Some wanted excise cuts, others extension of various holidays, still others wanted license fees cuts, one of them even suggested that some two-wheelers be moved into the “merit list” because sales was dull. Not one, not even one, said “Just give us enough electricity and good roads to the nearest port or railhead. Leave us alone, in turn we will pay fair taxes”. Big Indian industry has never been too keen on goods everyone can have. These are the so called non-rival economic goods. Ditto to the Congress party.


Apollo hospitals Dr Reddy was there too. He didnt seem to be bothered that the money saved by him in not constructing adequate multi-storied parking lot in his main Chennai hospital is at the expense of the residents of the area. Ten / fifteen streets away cars are parked on both sides of the street choking traffic and creating a mess. So, the government, by not severely cracking down on his patrons has enabled him to save crores.

I do not wish to pick on him or his institution. I just wanted to illustrate an attitude problem with our industry. The members actively sought intervention, ever so slightly pushing the rules in their favour. I wont even mention the worst offender of all, our IT industry. They wanted to extend their tax holidays beyond 2009, they might even get it. I have enough on this blog on the matter.

We then had real estate mogul Parsvnath and others , who wanted SRZs (Special Residential Zone) with equal status to SEZs.  A SRZ is a notified geographical region free of domestic taxes, duties, and levies with “special development rules”. Never mind the fact that nothing is being produced in a SRZ. Hey, you cant blame the realty guys because they know SEZs are really tax and real estate plays anyway. Why not call a spade a spade ? Moving on, we had textile lobbyists who wanted export concessions due to the rising rupee. Never mind that the Tirupur area is currently under a severe power crisis. Only the big guys with captive power plants are unaffected.

Most of them wrapped up their demands with a word of praise and feverish hope for the FM.


Tomorrow, when you find out that underwear with “nada” is going to have an excise duty cut, but underwear with “elastic” is being levied a nominal 2% surcharge. You will know why we need the budget.

Our industry, at least the old order, asked for it.

Roads, power, and simple taxes only create more competition, any idiot can do it. Getting your industry into a special classification and under tightly coupled complex tax schemes requires pure genius.

The Congress party and industry “stalwarts”. Made for each other.

Railway budget reality check

Posted in Uncategorized by realitycheck on February 27, 2008

“Cows become sick if they are not milked fully” – this was the  quote from Lalu that supposedly captures the railways’ miraculous turnaround. We are told that the turnaround is so miraculous that leading business schools like IIM-A are studying it.  This article by the ministers own “Officer on Special Duty” lavishes praise on the turnaround story. Others want to see more detail.

I must admit I have a mental block analyzing anything remotely related to Mr Lalu Prasad Yadav.  I used to think he was cute and funny in the mid-nineties. That wore off pretty quick. Not his neem toothbrush, not his pajamas, not his cow and buffalo stories. His act has worn out on me.  Yes, I am talking about his 15 year rule of Bihar, where he led tens of millions into a living hell. There have been poor administrators before him. The real problem was his reign coincided with the great economic opportunities post-liberalization. Other states took advantage to various extents, but he passed and passed. He knowingly plunged his state into lawless caste-based goondaism. To me, this reality cannot be escaped by any amount of media sponsored cuteness. It will take decades for Bihar to recover, simply because it takes time to settle blood money dues.

He still wins elections, but he uses the magic wand donated by the “Wizards from the lands of no data”.  You all know that you cant fight the magic wand from the land of no data, dont ya ? He just has to wave it and *ppooof* – all your “IIM economic capitalistic socialist communist science privatization ideas” vaporize instantly!

Now, back to the railway budget. I was watching all TV anchors frothing at the turnaround story with no concrete details. If just loading the rakes beyond capacity can result in $5B in the bank, why wasnt it done earlier ? Are the same accounting procedures being used ?

As far as the eye can see, I see no visible change in the railways in the past five years. Same filthy stations, same trains and coaches, same toilets that fertilize the land for free, same overloading, same touts and unregulated connections from stations to the cities.  No new parking lots. In fact, the automatic platform ticket vending machines at the Chennai Central have broken everytime I want to use them (dozens of times over the past two years). The IRCTC website is functional but we had it five years earlier and it was the almost the same.

To summarize : 

What used to work, still works.

What didnt, doesnt.

Home Ministers response to Naxals

Posted in Uncategorized by realitycheck on February 17, 2008

What would be screaming headlines for months in other countries is about to pass without a blip in India.  Here is what happened :

Short version : Naxals conquered police stations in the heart of India and managed to hold territory for a few hours before making a tactical retreat. Fifteen cops were killed while offering little or no resistance.

Long version : The biggest ever Maoist attack in Orissa, hundreds of armed guerrillas stormed Nayagarh town, barely 90 km from Bhubaneswar, and overran three police stations and two outposts on Friday night. Altogether, 13 police personnel and two civilians were killed in the attack that lasted over four hours and completely exposed the lack of preparedness of the local police despite similar operations in the past in Orissa, Chhattisgarh and Bihar.

The Naxals looted two armouries and walked off with impunity, having met no resistance. They took with them enough arms and ammunition, including light machine guns and standard army-issue assault rifles  to fight a full-scale war. They drove off in a bus that they had hijacked.  Source TOI


Today Mr. Shivraj Patil – the Indian Home minister was on Devils Advocate.  In true congress style, he was highlighting that only three states had problems. These are non Congress ruled of course. Andhra Pradesh, in his view is excellent. Apparently allowing the naxals to regroup has not had any adverse impact on them.

Does he really appreciate the nature of this ? :

Shivraj Patil: I also said it – that if anybody dies, we should be worried. If there is bloodshed taking place we should be worried. And that is if he is cautioning the people to help the activity of the government and the entire society the violence of the entire society to control the violence and bloodshed and terrorism, he’s not wrong. But you can’t have his minister contradicting his statement taking out of context one sentence here, one sentence there.

From the transcripts of Devils Advocate on CNN-IBN

Naxalism is not simply violence. It is not simply bloodshed and terrorism either. No, “we are worried when anyone gets killed” is not an appropriate answer. This is a more fundamental security threat. It has got to do with the monopoly over the use of force. People get killed, bombs explode, terrorism happens in all countries.  Sir, this is different.

A secular religio tourist plan for AP

Posted in Uncategorized by realitycheck on February 15, 2008

Valid excuse  for lack of updates: a horrible internet connection. Regular blogging will resume. I was going to write about the antics of the MNS chief Raj Thackeray, but I guess the issue is past its sell-by-date.


How about the antics of YSR Reddy’s Congress government instead ?

The AP Governor announced yesterday :

Governor N D Tiwari in his address to the joint budget session of the Assembly and Council said, “My government has decided to extend the Haj pilgrim scheme to Christian minorities also for their religious visits to Christian Holy Lands in Israel.”

 Congressman Veerappa Moily chips in :

He said such decisions were based on “regional aspirations” and “they must have found that certain concessions had to be given to Christians”.  

Source : TOI

A weak response from the opposition (TDP?)

Unlike the Haj, which is a protected environment and which sees thousands of pilgrims from all over the world every year, holy sites in Israel including disputed Jerusalem, are located in a virtual war zone and it is unlikely that more than a few Christians from India and the state will want to visit,” said an opposition leader. Christians comprise about 1.5% of AP’s eight crore population.

Source :  TOI

The opposition  is wrong, as is the analysis in the Economic Times. Jerusalem is quite safe and millions visit holy sites there from the world over. In any case, you do not introduce a religious sop like this and count on people not taking advantage of an overseas trip.  For most folks, this is a tourist excursion to exotic middle east historical sites with a bit of religion thrown in. A small detour will also take pilgrims to the awesome wonders of the pyramids in Egypt.   In turn, all they have to do is remember which party made it all possible.

See what Shakeel Ahmed has to say :

Shakeel Ahmed, spokesman, said, “We are for inclusive growth and taking all sections of society along in the measures taken. As long as it is within the limits of Constitution, it is a welcome step, whether it is about Hindus or Muslims or Christians.”

Obviously, he thinks this scheme is within the limits of the constitution. Presumably, there are others who think quotas without data or monitoring are also within limits of the constitution. TN recently had no trouble announcing an exclusive Christian quota in education and employment.

The judiciary has not told the politicians exactly where the lines of fundamental rights, equality, secularism, and social justice are drawn. Everyone has their own view of the constitution.

Therefore, the AP Hindus should try to get something similar. Unfortunately, foreign trips are not possible because their religion is a local one. Trips to Mt Kailash are great, but the damn Chinese wont give permission for thousands to visit. Vaishnodevi, Badrinath, and Amarnath are great wonders, but once the beauty of the Himalayas sink in you will have to face the lack of infrastructure there. Trips to other glaciers are no fun because you may have to spend cold nights in army tents.  Sabarimala is a good candidate, but the communist government there want the “intellectuals” to decide on serious gender discrimination issues.  Even worse, it may actually be a buddhist shrine. As the media tells us, “too much cont-raw-varsy”.   How about a trip to the Venkateswara temple at Pittsburgh ? I heard US Telugu hindus have contributed a lot for it.  Only problem is that the temple might be too small to handle the influx.

How about Srisailam or Tirupati ? With a special one-time only duty free shopping concession at the new Hyderabad airport. Any other ideas ?