Friday, October 28, 2011


Now that Sarah Palin is out of the American Presidential race and Lindsay Lohan probably back in the jail, the whole of America – and hence the whole of the world – is talking about the ‘Occupy Wall Street’ movement. Sans the sound and fury, this grassroots outburst of rage is about a majority no longer willing to lie down and let a small minority of the elite fix the rules of the game and even the whole system to gain at the cost of the majority.

That got me thinking. Why is India not witnessing a similar movement that can be labelled as ‘Occupy Dalal Street’? After all, if you are familiar with colloquial Hindi, the very name given to India’s stock market and financial powerhouse reeks of fixing and worse. To fall back upon colloquial Hindi, what is the role played by a Dalal in India? And what image do you conjure up in your mind when someone tells you: “ Oh, that guy is a dalaal”? If contemporary Wall Street in tandem with Washington (Despite Obama’s once soaring and now empty rhetoric) represents the worst of crony capitalism, Dalal Street in tandem with Delhi (Despite Indira Gandhi adding the word ‘Socialist’ to the Indian Constitution during the Emergency in 1975) has always represented the worst of predatory and marauding crony capitalism. So with public anger at an all time high, why not an Occupy Dalal Street movement or a movement to banish Dalals from Indian deal-making?

During the early heady days of the Anna movement, when it was the national pastime to label all politicians and all bureaucrats as crooks; and when the brouhaha over the 2G scam was at its peak, I had asked a simple question in this magazine: how is the media so enthusiastically joining the mob in condemning the system even as it bends over backwards to portray all Indian businessmen and industrialists as visionaries and demigods? I had asked, if politicians and bureaucrats have looted you and me in the 2G scam, what about the businessmen who actually dish out the moolah? I am yet to get any credible answer.

I know, some will argue that the Indian system forces businessmen to pay bribes; otherwise they would compete with Mother Teresa for saintliness. Even naïve journalists, NGO activists and political workers know that Indian businessmen are often far more crooked, venal and corrupt than the much reviled class of politicians and bureaucrats. Recently, a group of Indian industrialists made a public demand in a letter to the hapless Prime Minister Dr. Manmohan Singh to stop a group of businessmen hijacking the country in cahoots with politicians. Yes, they specifically stated that many of their fellow businessmen are crooked, bent and worse. Did we get any serious debate in the media on the role of crooked businessmen in making India a banana republic? Sorry folks, when it comes to crooked businessmen, our media has more important things like advertising revenue to consider. Crooked businessmen give the moolah to netas; they also give ads!

Our system is so rotten that even Kiran Bedi has the effrontery to portray her patently unethical behaviour as a righteous deed. To borrow again from colloquial Hindi, or Urdu, if you insist: Is Hamaam Mein Hum Sabhi Nange Hain!


Friday, October 14, 2011


A decade down the road, instant historians will perhaps marvel at this paradox: how a bunch of absolutely true blue brilliant people managed to destroy growth prospects for India. Just look and marvel at the names: Manmohan Singh, Pranab Mukherjee, Jairam Ramesh, P. Chidambaram, Montek Singh Ahluwalia, Kaushik Basu, D. Subbarao…. Each name is brilliance personified. And yet collectively, these pilots of the Indian economy are failing to prevent a crash landing of growth.

Th e automobile industry is a reliable indicator of what exactly is happening with the economy. And the message from this bellwether sector is stark and ominous: growth prospects are tanking. For three months in a row, sales of cars have been lower than last year. Th e industry clocked a growth rate of about 30% in 2010-11. In the first six months of the current fiscal, the growth rate is just about 1%. Auto companies have slashed growth forecast from 20% and more, to less than 2% this year. Worse, there is now a dramatic slowdown in the sales growth of commercial vehicles, including auto rickshaws. Even a child can tell you that the RBI decision to raise interest rates 12 times in less than two years is responsible for this calamity. Sales of two wheelers – which are not so dependent on auto loans, have maintained a healthy growth rate. It is only the growth in four wheelers that has crashed. Don’t forget, each automobile sold generates many jobs that range from garage mechanics, workers in tyre factories, workers in accessory plants, attendants in petrol pumps to financial sector executives who process auto loans. So such a drastic slowdown in the auto industry is not hitting just the rich and the middle class, it is deeply hurting the lower middle class and the poor who depend on this industry for jobs.

As worrisome as the astonishing decline in growth of the auto industry is the fact that excise duty collections in September this year have been lower than last year. Many economists are suggesting that this could be an aberration. But I don’t think so. Th ere have been clear indications since January this year that economic activity and sentiments are being adversely aff ected. No one is now talking about a GDP growth rate of 8%; most will be relieved and happy if GDP growth rate in the current year manages to reach even 7.5%. Th e opportunities lost for India because of this avoidable tragedy are huge. Better managed, the Indian economy, like the Chinese economy, should grow at at least 10% a year. What does this unrealised 2.5% mean. In purely statistical terms, it means the economy is losing about $75 billion each year. In human terms, the tragedy is even more painful because this failure means persistence of poverty, unemployment, malnutrition and worse.

And what have Indian policy makers achieved by behaving like monetarist hawks? Food inflation is still in double digits, hurting the poor where it hurts them even more. And the Rupee has tanked to almost Rs.50 against a weak dollar – a fact that will worsen inflation. Can any one of these brilliant people at the helm of the Indian economy explain this mystery?