30 November 2016

Demonetisation - by Prashant Kaddi

By Prashant Kaddi:

First things first. It is not really demonetisation as the smaller-denomination currency notes are not touched. It is an extreme case of 'discontinuation' of a series of notes of particular denomination - ie, all series of Rs 500 and Rs 1000 notes.

There are 2 broad objectives that are stated:
a. Removing hoarded black money (money for which tax is not paid or acquired illegally through corrupt means)
b. Removing counterfeit currency (largely used by terrorists and others in anti-national activities)

As a wise professor once summarised:
Money is a matter of functions four,
A medium, a measure, a standard, a store.

The idea is to retain the 3 functions: a medium of exchange, a measure of value, a standard of payment - but to remove it as a store of value.

The simple truth is that such a large-scale move in a country so large and diverse (especially with such large cash-transaction volume) has never been attempted in history. And nobody - no matter how many degrees or four-syllable English words they have acquired - has a handle to be able to predict the outcomes. Also, nobody can predict the behavior of a billion people when such a move is announced and the bottlenecks that develop. One just has to be flexible to manage the availability of cash.

Likely outcomes, simpler one first:

Counterfeit Notes - This problem will get solved for the time being, till the printing presses start to copy the Rs 2000 note as well. On the plus side, there are security features which may be visible to the naked eye as well as under ultraviolet, the problem being you and I have no way to recognise them. Follow-up action generally believed is that the Rs 2000 note will also be similarly discontinued at some point in the near future.

Black Money - While it is true that most black money is in bullion or real estate, there is still substantial amount which would be in cash - ie, political funding as well as the built-up stock which will shortly be used to buy real estate or gold.

Out of the approximately Rs 14 lakh crore in high-value currency, Rs 5.5 lakh crore has already come into the banking system. If we assume that is a large part of the stock and say there is still some Rs 3-4 lakh crore to come, there is still a possibility of a windfall of Rs 4-5 lakh crore for the government - in addition to the tax on the currently deposited monies. The money which does not come back is a reduction in RBI liability. Hopefully this money can be utilised to fund schemes, reduce poverty, give tax benefit to the current carriers of the cross (salaried class, businesses, etc).

Will it stop the generation of black money? No, it won't. But in conjunction with the Black Money Bill, GST and a slew of tax reforms that are ongoing and expected in the future, it would suffice to say that making black money would possibly become slightly more difficult. And with systems of transparency, high-level corruption can be reduced. However, to root out low-level corruption, a social change is required. It cannot be done through enacting rules or introducing technology alone. And needless to say, political and bureaucratic possibilities of making money need to be dealt a blow.

There are suggestions to end taxes which will remove any possibilities of tax avoidance and several radical economic proposals, along with electoral reform. But my guess is that we will go step by step. Nobody can take on all vested interests at once and survive politically. One at a time and that will be killed completely.

Also, the political opposition is not based on facts. Maybe everyone in the opposition is pissed that they are staring at a loss of their main source of power which is wealth, and/or the larger-than-life figure the Prime Minister has taken on with several historic 'strikes'. Either way, there is no credence to the claims that the poor are severely inconvenienced. Everyone is somewhat inconvenienced, but not too much, and almost the entire country is willing to do their part to see the illegally wealthy sweat a bit. Also, the charge that the implementation is botched is probably not true, given that Rs 1.5 lakh crore is already either withdrawn or exchanged by banks within about 10-12 days - which is approximately 1/3 of the notes in circulation. Approximately 1 in 4 of all notes were in circulation as per RBI; the rest were presumably stored (assuming an equal % of all denominations). This scale of distribution is unprecedented and the scale of adjustments done based on ground feedback is definitely a positive.

Make no mistake. This move is not merely about the numbers. It is a strike at the heart of the darkness that is black money. That the state is not impotent against the illegally rich and mighty, who have eaten away at the very fabric of this economy for so long. And putting the fear that though corruption giveth, the long arm of the law can taketh away.

09 October 2016

'Queen Of Katwe' - Review

Review of 'Queen Of Katwe':

2005, Kampala (Uganda): An engineer called Robert Katende joins an NGO and starts teaching chess to children in a slum in Katwe (the poorest area of the city). One of his students is a 10-year-old girl called Phiona Mutesi - the daughter of a widow with 4 children, who sells vegetables for a living. Under Katende's guidance, Phiona achieves the unlikely feat of becoming Uganda's national chess champion and an international chess player.

In 2012, Sports Illustrated reporter Tim Crothers wrote a book about Phiona Mutesi called Queen Of Katwe. And now, Meera Nayyar (Mira Nair) has made it into a movie - featuring Madina Nalwanga in the lead role.

The most striking thing about Queen Of Katwe is its depiction of the Kampala slum. The word 'poverty' is too feeble to be used here. This is a world where life is not a wide zone of comfort but just a thin line of existence - and any chance event (like a road accident or heavy rain) can push you right off that line. Where a simple thing like taking a bath is a major project. Where shops don't have open fronts but iron grills instead. But somehow, in the midst of all this deprivation and despair, the poor people of the slum manage to celebrate life - through music, dance and colour.

Queen Of Katwe is a simple and heart-warming story about real people, their real pain and suffering, their real hopes and dreams, their real victories and defeats. It is definitely a welcome change from Hollywood's mind-numbing superhero factory.

05 October 2016

Purusha, Prakriti, Brahma, Kshatra

A categorisation of human qualities:

Purusha
Prakriti
Brahma
Kshatra
Intelligence + Knowledge
Strength + Courage
Softness + Gentleness

02 October 2016

'Sully' - Review

Review of 'Sully':

On 15 January 2009, a plane took off from New York to Seattle with 150 people on board. Shortly after takeoff, a flock of birds hit it and blew out both its engines. The standard solution in such a situation is to return to the airport. The pilot, Captain Chesley Sullenberger (Sully), had just seconds to make a decision. He chose instead to land the plane on the Hudson River - a very dangerous move. Miraculously, the plane landed safely and all the 150 people survived. Sullenberger became an American hero.

Clint Eastwood's Sully tells the story of that incident (which everybody knows) and more importantly, what happened behind the scenes (which everybody doesn't know). Because even as the American public and media went ballistic about Sullenberger's heroism, the National Transportation Safety Board (NTSB) was conducting its investigation into the incident. And its initial direction was that Sullenberger had been reckless and irresponsible in landing the plane on the river - instead of taking it back to the airport.

The first half is average. The writing (script by Todd Komarnicki) and direction could have been better. The second half is the part that delivers. Eastwood tells the story in his trademark no-nonsense style. Aaron Eckhart as the co-pilot (sporting a thick mustache) and Laura Linney as Sullenberger's wife give solid performances. But the movie, needless to say, belongs to Tom Hanks. He portrays Sullenberger as a genuine hero. Not a movie/media hero who is flashy, flamboyant and larger-than-life. But a real hero who is no-frills, down-to-earth, simple and humble.

30 September 2016

'Pink' (Hindi Movie) Review

Review of Hindi movie 'Pink':

What is a movie? What is motion picture? Motion picture is an art form that tells stories. So a movie is a work of art that tells a story - about some characters, the lives they live, the situations they go through and the emotions they feel. This is the fundamental function of a movie.

But art also has power. And motion picture, in particular, is very powerful. It can be used to inform and educate people - especially about important social issues. But to the extent it does this, it compromises on its fundamental function - and therefore on its quality as a work of art.

Which brings us to Aniruddha Roy Chowdhury's Pink. Pink takes a 50-50 approach. 50% of it is a movie that tells a story about some characters. And 50% of it is about an important social issue - violence against women. The movie part of it is good. It is realistic and has some good performances.

The other 50% is meant to educate people about violence against women. Specifically, it argues the case of modernity against feudalism. This part gets full marks for good intentions. But it goes against the fundamental function of a movie - which is to tell a story. So it reduces Pink's quality as a movie.

So as an educational video meant for bringing about social improvement, Pink gets 10 out of 10. And as a movie, it gets 5 out of 10.

26 September 2016

Analysts Rule The World

ANALYSTS RULE THE WORLD

(On an alien space-ship)
Alien 1: Sir, we have discovered a planet with life.
Alien 2: What! Really?
Alien 1: Yes. Its atmosphere is nitrogen + oxygen, its surface is covered mostly by water and it has carbon-based life-forms.
Alien 2: How many types of life-forms?
Alien 1: There are many. But one type is dominant.
Alien 2: Find out everything you can about them.
Alien 1: Yes, sir.

(Some time later)
Alien 1: Sir, their primary mode of information transmission is in audio-visual form by using electro-magnetic waves.
Alien 2: How do they receive this information?
Alien 1: Through some strange-looking boxes.
Alien 2: Is this important?
Alien 1: Very. They spend all their time looking at these boxes.
Alien 2: Excellent. Tap into those waves. Find out who are their rulers.
Alien 1: Yes, sir.

(Some time later)
Alien 1: Sir, their rulers are called 'analysts'.
Alien 2: What?
Alien 1: Yes. We did a frequency study of their transmissions. 99% of their transmissions contain the words "According to analysts", "Analysts say this", "Analysts say that", etc.
Alien 2: Are you sure about this?
Alien 1: We are 100% sure.
Alien 2: OK, locate these analysts immediately. We must talk to them soon as possible. I will inform the Emperor.
Alien 1: Yes, sir!

27 August 2016

Segregation of Sexes in India

An important difference between agricultural society and industrial society is the relationship between the sexes.

20th century India was an agricultural society. One feature of an agricultural society is the segregation of the sexes. Boys and girls sat separately in schools and colleges. They did not talk to each other. If a boy talked to a girl (or vice versa) it would make news. As a result, boys and girls grew up without interacting much with each other. This situation continued into adulthood. Women did not work much outside the house. Their participation in the workforce was low. So men and women also did not interact much with each other.

21st century India is an industrialising society. It is completely different from 20th century India. It is not yet an industrial society. But it is no longer an agricultural society either. Today boys and girls sit together in schools and colleges. They talk to each other all the time. And more women are now working outside the house and participating in the workforce. So men and women also interact much more with each other.

This seems like a trivial point (and today's youth will find this description of 20th century India bizarre). But it may have some relevance. Social scientists say that violence against women is mainly due to the segregation of the sexes. How? One, boys/men don't know/understand girls/women. So they don't respect/appreciate them enough. Two, boys/men don't have normal and healthy relationships with girls/women. So this leads to frustration - which in turn leads to violence. Now if this theory is correct, then increasing industrialisation/modernisation will lead to decreased violence against women.