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Thursday, November 17, 2016

Demonetization of Rs 500 and Rs 1000: Could Modi have done it differently?

On November 8, just when a large number of Americans were queuing up to cast their votes in, what would turn out to be a historic presidential election, here in India, Prime Minister Narendra Modi made a surprise and unscheduled appearance on national television at 8 pm, in what would turn out to be a startling economic policy pronouncement that made as much as 86 per cent of India's currency invalid.

His aim was to wipe out the massive amounts of counterfeit banknotes in the denomination of Rs 500 and Rs 1000; and also to render invalid huge stacks of these currency that have been set apart to fuel unlawful practices like street protests, terror activities and corruption.  

Modi, who has survived cataclysmic social upheavals in Gujarat as its chief minister, knows well not only the power of symbolism but also that for anything to have a lasting impact it has to be swift and strong. The November 8 'surgical strike' on people who are wrecking India's economy and financial well-being, fitted well into the Modi style of governance.

The severity of Modi's decision can be gauged from the fact that it took at least one full day for the new economic order to sink in. Almost immediately, the stark reality of what is in every Indian's wallets struck each of them -- invalid Rs 1000 and Rs 500 notes and very few valid Rs 100 notes. Indians simply ran out of cash. And, to make it worse, banks and ATMs too ran out of cash. So, Modi's assurance that the invalid notes can be exchanged in banks for new ones amounted to not much.

Today is the ninth day; and instead of things getting better, seemingly it's getting worse. For example, today, the revenue secretary announced that the old notes can be swapped for new ones in banks only up to a maximum of Rs 2,000 per person. It was Rs 4,500. Since many ATMs aren't working, there is no point in depositing in accounts, since the money can't be withdrawn. 

While Prime Minister Modi deserves credit for taking this bold step, the lengthening queues outside banks and ATMs are fueling discontent among people and making both purchases and selling difficult. In short, it's hurting the economy, may be in the short term. But how it will play out in the coming days is not known.

Why Modi is correct

* Corruption is endemic in India. When the going gets tough, reach out for the banknotes, seems to a national mantra. Though it is commonly associated with government-related services, people bribe their way to convenience very often. While in some instances, cash can speed up matters, on other occasions it can mean serious compromise in quality. And, when government services are corrupted, nation's financial health weakens.

* Black money is in plenty. This is a large amount of unaccounted wealth. The beneficiaries are individuals, and groups of people who run organizations. The losers are the country (the government) and institutions, both private and public. Basically Indian financial culture is such that it promotes illegal wealth. For example, people don't mind forgoing the bill in return for a discount. They fake bills and financial agreements to escape tax. Many resort to cash transactions to avoid leaving a trail which would result in payment of tax. Poor people are only too willing to accept wads of currency from political parties who seek their votes. It's a huge ugly mess.

* Fake banknotes in the denominations of Rs 500 and Rs 1000 were so many that banks themselves were dispensing them and honest people too had them in their wallets.

* India has to reduce its dependence on hard cash. There has to be more of cheque or electronic transactions that will leave a trail. Unless people are pushed into it like this, the lethargic, complacent average Indian will not change.

Could this have been done differently?

* The Prime Minister had to make it a surprise announcement, since any inkling of this would have resulted in people turning black money into white, defeating the whole purpose of the exercise.

* It was common knowledge that - considering the amount of fake notes in circulation - demonetization was the only option. The most intuitive of the businessmen might have seen this coming, sooner than later.

* While the announcement of demonetization would have had to be a surprise, at the backend the government could have set the stage to minimise the hardship for people. 

* The RBI (Reserve Bank of India, the banking regulator) could have increased the supply of Rs 100 notes and instructed the banks not to put Rs 500 and Rs 1000 back into circulation. Instead new Rs 500 notes could have been put into circulation. It would have been a gradual process, and no one would have found anything amiss there. 

* May be a month into this quiet backend operation, the Prime Minister could have made the announcement of demonetization of the "old" bank notes. This way, while the end objective of curbing black money (it can't wiped out totally) would be achieved, the subtlety of the operation would have ensured that people had minimum inconvenience. 

What is at stake?

* This has both political and economic implications. Modi's advantage is that the opposition is fragmented, rudderless and leaderless. Elections in UP and Punjab could end up as a referendum on Modi's governance.

* Undoubtedly, business across the board has been hit. There isn't any cash around. Many people say this is just a temporary phenomenon. But how things would be dramatically better after a few months is not known.

* Nothing will totally wipe away black money from the economy. It can be reduced to a considerable extent. The government will have to follow this up with raids on tax evaders, bringing them book or even imprison them. Otherwise, this will just go down in history as a political stunt which amounted to nothing but inconvenience to the people.

Wednesday, November 9, 2016

Donald Trump's victory over Hillary Clinton: stunning but not surprising

What has happened in the US today is not what was probable but what was possible. Donald Trump had promised a Brexit like outcome and that has come true.

What's stunning is Trump's win rather than Clinton's defeat. But I am not surprised. What has mattered finally is the frustration of the grassroots of the society like middle class and working class with a system that simply didn't work for them.

His win has followed a familiar pattern where anti-establishment forces have prevailed over status quo-ist, and politically correct conformists. We saw that in the Brexit referendum. We saw that in the rise of Narendra Modi and of Arvind Kejriwal; and also of Rodrigo Duterte as the President of the Philippines.

This is more of Trump's victory than that of the Republican Party, because another reason for the historic result is the yawning gap between political parties and the people.

Trump and Clinton stuck to the script. He blasted the elitist Washington coterie and promised moon to middle class, factory workers, delivery boys and gas station employees. She attacked Trump, focused on women, immigrants and educated elite. Finally his script worked.

The way Trump controversially but steadily worked his way through the primaries to the White House is remarkable. He began as nothing. And as he progressed, no one seemed to like his ways. But he was progressing. That was a reality, which a vast majority of people, and the media, either were blind to, or thought would peter out finally. But that was not to be.

What we now need to see is how far Trump will be able to bring the fractured Republican Party and its supporters together. Because without that unity, he won't be able carry through many of his grandiose plans. Actually he will need to reach out across the aisle as well. There is a limit to how much confrontation can achieve.

The first indications of what the Trump presidency will be came in his acceptance speech. He is doing what inevitably he has to -- sounding Presidential, conciliatory and inclusive.

But still we really don't know what his plans are. He has broken many rules already. So we can expect quite a few out of the box policy plans from him. Exciting days ahead.

Donald Trump's acceptance speech


Hillary Clinton's concession speech


Barack Obama's speech on Trump victory



Wednesday, November 2, 2016

Book Review: The Madras Affair by Sundari Venkatraman

The Madras Affair
It was the catchy title of this book that made me check it out on Kindle Unlimited.

But, even before getting over 25% of the book, I was impressed by a very unlikely aspect of it: there were no typos or grammatical errors. I have spotted many mistakes in e-books even by well-known authors, and I wondered if the physical books too had them, or these errors were there only in the e-version, due to some technical issues. Kudos to the publishers, Readomania!

The book made very easy and good reading. The theme is a socially relevant one. Urban or rural, there are many families that give traditional customs precedence over individual comforts and happiness. "What will people say ... " often determines decisions. This book deals with it at different stages.

The story revolves around the life of Sangita. How much ever we are advanced in terms of money, education or technology, there are many 'Sangitas' around. They are trapped by the diktats of family elders who take false pride in adhering to some age-old customs, at the cost of the happiness and well-being of their own daughters or sisters. Some remain trapped for their entire lives; some manage to escape. The author has done well to not only focus on the life of a Sangita, but also give a positive spin to her story, and debunk a few myths.

The plot is well-structured and the story line generally flows well, though I thought at a few places the author could have detailed the scene a bit more, for emphasis. I shall refrain from mentioning those, lest it will be a spoiler.

My rating: 4 of 5 stars

Thursday, October 20, 2016

What Trump should have told Chris Wallace when he was asked if he would accept election result

In the third and last US Presidential debate today early morning, Indian time, I thought Donald Trump performed much better than the previous two debates.

He was calmer, he didn't interrupt Hillary Clinton or the moderator (Chris Wallace) as often he did on the previous two occasions; and he seemed to be more focused and prepared. He seemed to be putting Hillary on the defensive on quite a few occasions.

The Republican presidential hopeful's trump card has always been that Hillary has experience, but it's a bad experience. Another is that Hillary only talks, never does or gets anything done.

Trump has no experience, and, therefore, has no baggage. People who are backing Trump are the ones who are willing to take the gamble to entrust the leadership of the US to someone who is not an original politician; and the hope is that he will fare differently, taking America out of the current problems.

But all the ground Trump seemed to be gaining finally, he lost with one answer: his refusal to say that he will accept the verdict of the election.

It was a very dangerous statement. I am sure Trump and even the audience didn't immediately get the full implications of that. What he said sounded more like what we are used to hearing in nations where democracy hasn't really taken root or in nations ruled authoritarian rulers.

Trump's pronouncement (like a few earlier too) didn't fit into the image of America the world has. In fact, his non-commitment has turned out to be the only real highlight of the debate. The rest of the debate was all on predictable lines.

For the record, here is the transcript of the relevant portions, which I am sure will go down in history.

Chris Wallace: ".... Your running mate Governor Pence pledged on Sunday that he and you, his words, will absolutely accept the result of this election. Today your daughter Ivanka said the same thing. I want to ask you here on the stage tonight, do you make the same commitment that you will absolutely, sir, that you will absolutely accept the result of the selection?"

Trump:  "I will look at it at the time. I'm not looking anything now I will look at it at the time. What I've seen, what I've seen it so bad. First of all the media is so dishonest  ..... "

Wallace: "But, sir."

Trump: " .... We will find out on November eighth but I think they’re going to see through it. ... "

Wallace: "But sir, there is a tradition in this country, in fact one of the prides of this country, is the peaceful transition of power and that no matter how hard fought a campaign is, that at the end of the campaign, that the loser concedes to the winner, not saying that you are necessarily going to be the you loser or the winner, but that the loser concedes to the winner and that the country comes together in part for the good of the country, are you saying that you are not prepared now to commit to that principle?"

Trump: "What I'm saying now is I will tell you at the time. I will keep you in suspense, okay?"

Of course, Trump isn't categorically saying that he won't accept the verdict.

However, he could have said something on these lines:

I am sure I won't have to make a concessions speech because I won't be the loser. It's Hillary who will have to. But since you asked the question, even though it's been a rigged election, I will make the same commitment that I will absolutely accept the result of the election. That's a great American tradition that I will honour.

If Trump had said this, he would have gained a few undecided voters, who knows may be even a few Democrat supporters sitting on the fence. He wouldn't have lost anything. And Wallace wouldn't have had to ask the more pointed supplementary question.

But then, that wouldn't have been Trump -- the aggressive, unpredictable, wildcard politician, who has progressed this far.

Saturday, October 15, 2016

The Trump dream of mending a broken America

Crippled America: How to Make America Great Again
If you have been following Donald Trump's campaign speeches, you wouldn't find anything extraordinarily new in this book. However, the book elaborates on some of the pet themes of this realty mogul and reality star.

Trump's premise is that America resembles a Third World country. Everything is broken. But not beyond repair. And he alone can fix it.

His arguments are superficial; and often unidirectional. On the face of it, some of the things he talks about seem to make sense, but when you are talking of a huge, multicultural nation like the US, its Presidential aspirant can't have blinkers. He needs to have a holistic and a macro view of different aspects of the nation.

Somewhere towards the latter half of the book I began getting the feeling that he has just one solution: create more and more business opportunities for people. So create more and more hotels, resorts, malls etc etc. even if heritage structures or whatever have to be broken down.

That way, he will bring in more jobs, and prosperity. His route to fixing America is only via more and more dollars. Not surprising, because, he is basically a businessman. And, I doubt if he has any interest in or understanding of any other facet of a multicultural society.

At the same time, he says somewhere in the book, that getting rich is no guarantee to becoming happy. He talks of American values, which are not elaborated. And, there is somewhere a disconnect.

The book is more about his dreams, of mending a broken country. But the full, long road map isn't there. Just elect him as the next President of the US. That's all. Leave the rest to him.

My rating: 2 of 5 stars 

Monday, October 10, 2016

Hillary Clinton gains from Donald Trump's errors

The expectations ahead of the second US Presidential Debate that took place today was akin to one ahead of soap operas. Much of the blame must be taken by the Republican nominee Donald Trump.

It all began with the 2005 video tape that surfaced on Friday, in which Trump bragged about how his celebrity status allowed him to grope and make other sexual advances to women. That this 11 year-old tape should come to light only a few days before the debate and less than a month ahead of the poll, is more than mere coincidence. Also, it's not the first time presidential candidates have had to face ghosts from the past at the most wrong time. It's politics that a democracy gives room for.

Understandably, there was huge uproar. Trump was forced to apologize. Anyone else would have sought this unseemly distraction to end there. But not Trump. At the end of the apology, he made it plain clear that the topic would be discussed in the coming days, and signed off sounding a bit ominous, see you at Sunday's debate.

Trump then turned his focus on Bill Clinton. He got four women who have accused Bill Clinton of transgressions, on stage before the press, a couple of hours before the debate. And according to Washington Post and NBC News, there was a plan to get the four women to confront Bill just as they were to walk in for the debate. But the whole plan was nixed.

As expected, Trump raised the topic during the debate. but Hillary, who was well prepared, refused to take the bait, and steered clear of this non-topic, and focused on current topics of importance to the public.

Trump had come to the debate so much on the defensive and in negative territory, it was pretty easy game for Hillary. She knew Trump was already messing things up further; and she had to only ensure that she didn't make any mistakes. There was no need for her to push Trump deeper into the mess.

It was a dead pan performance by Hillary. She didn't score any major points; and there were no knockout punches. But thanks to Trump's conduct, Hillary seemed to be the winner today, without making winning strokes.

As I write this, it's the day after in the US; and news is breaking that House Speaker Paul Ryan has declared that he will not support Trump. But he hasn't withdrawn his endorsement. Things are so bad, that running mate Mike Pence has had to declare that he hasn't still quit the race.

Polls are showing that Hillary is gaining now. It will be too difficult for Trump to close the gap or even overtake, unless there is a miracle.

Thursday, September 29, 2016

India avenges terror attacks with surgical strike. Now, what next?

Finally, the long-awaited avenging of the Uri attack has taken place. Remember the the buzz on the social media a few days ago? See my previous post.

The day's excitement, which began with the news that the Prime Minister had cancelled a meeting to discuss the status of the Most Favoured Nation status of Pakistan, has lasted right up to the end of the day.

Instead of the meeting on the MFN status, the PM chaired a meeting of the Cabinet Committee on Security Affairs. At that time it was also announced that there were will be a rare joint press conference by the MoD and MEA. There was immediate speculation on what is going to be announced.

The announcement of the “surgical operation” came at that press briefing by the DGMO Lt Gen Ranbir Singh. (Surgical strike is a military operation aimed at hitting their targets precisely with little or no collateral damage to surrounding areas.) He said that the Indian troops crossed the Line of Control and destroyed several launch pads. Many terrorists died, and there were no casualties on the Indian side. When journalists wanted to ask questions, it was announced that the officials won't take any questions, and the press meet ended.

Officials seem to have briefed journalists off the record; and through the afternoon a number of details of the operation filtered out. At least 38 terrorists were killed. Seven launch pads were destroyed. The troops went up to 6 km inside the Pak-occupied Kashmir. And the operation began around 12.30 am and lated till around 4.30 am. In the night, more details of the operation are emerging.

Pak reaction

Interestingly, Pakistan in its reaction, said the Indian claim was a lie. “There was no surgical strike. It was just a cross-border shelling in which two Pakistani soldiers died,” is the gist of that reaction.

In a way that shows their “guilt”. Because if they didn't have anything to hide, they would have reacted saying, “India, without any provocation crossed the LoC, smashed infrastructure resulting in many deaths.” Nothing of that sort.

In these days of rapid information dissemination, it's difficult to hide anything. And wonder if the people of Pakistan will believe their government's reaction that nothing actually happened.

More surgical strikes?

I don't think there will be any immediate major retaliation by the Pakistan defence forces. Because, Pakistan isn't even saying that India conducted surgical strikes. So, for what should they retaliate?

But Pakistan, terming last night incident as only s cross-border shelling, says they will not brook any further aggression. That is significant. Because, that is like a warning to India. “Once it's okay, We will look the other way. But if you are going to make this a habit, don't think we will keep quiet,” That seems to be what they are meaning.

It will be naive on India's part to assume that Pakistan will not hit back. That is why Indian defence forces are at maximum alert; ready to take on even any surprise retaliation.

The government sources are saying that this will not be a one-off surgical strike. There will be a sustained bid to end the cross-border infiltration and the terror that is flowing into Jammu and Kashmir.

That means there is a change from in our policy from being a passive witness to an active combatant. It is only natural that there is such a change, as the moralistic high ground based on peace hasn't exactly brought about any tranquility at all. It is only being seen as a weakness, and capitalised on.

But in the long run, military strikes can't actually solve any political or social issue. It can neutralize a combative situation, and create a climate for a civilian agreement. That's what Prime Minister Narendra Modi should finally aim at – end this decades-old problem once and for all, using all means, military and civilian.

Tuesday, September 27, 2016

First Presidential debate goes to Hillary

The much-awaited first presidential debate in the 2016 election took place today at the Hofstra University, in New York. It was billed as the most-talked about event. A huge number of people watched the debate. Still no official figures; but some 100 million people are said to have watched it.

How did Hillary Clinton perform

- She was calm and composed.
- Initially she seemed to be on the defensive and having to do lot explaining
- But later she took on an aggressive tone without sounding offensive.
- She effectively and forcefully put her points across
- She never interrupted when Trump or the moderator was speaking
- She presented a pleasant demeanour often smiling
- She was to the point and was very articulate
- She managed to deflect inconvenient questions very effectively.
- At times her confidence was bordering on I-know-it-all sort of counteance.
- She didn't have effective answers to some of the negative images Trump painted about present-day America. There wasn't a clear answer to why things have come to such a pass.

How did Donald Trump perform

- He used well the advantage of his non-politician status, and not having been in any position of power to question Hillary on the ills plaguing the US today.
- He came across as a no-nonsense go-getter whose only agenda is to fix issues.
- He kept talking about having the interest of America uppermost in any policy decision
- He was impatient and looked quite aggressive
- He was constantly interrupting both Hillary and the moderator
- He was seeing everything from trade to tax and diplomacy to terrorism only through the prism of money. He was constantly coming across as a businessman talking.

At the end of it all, I felt Clinton ended ahead of Trump.

There were many interesting quotes. But what I liked the best, came at the fag end.

Donald: She doesn't have the look. She don't have the stamina. .... I don't believe she does have the stamina. To be president of this country you need tremendous stamina.

Hillary: Well, as soon as he travels to one hundred and twelve countries and negotiates a peace deal, a cease-fire, a release of dissidents, and opening of new opportunities and nations around the world or even spends 11 hours testifying in front of a congressional committee, he can talk to me about stamina.

NPR has the entire text of the live debate, and the fact-checks.

Thursday, September 22, 2016

Did India avenge Uri attack?

Three was a lot of buzz on social media and messaging groups like WhatsApp regarding a military offensive Indian defence forces are supposed to have made across the Line of Control as a response to the attack on the Indian Army base in Uri, Jammu and Kashmir on 18th.

While initially the talk was only in the social media, later The Quint, a popular online magazine, ran the story after checking with sources. Since many doubted the veracity of the story, The Quint rechecked with their sources, and now they stand by the story.

The story, if true, is quite a newsy one. It says that 20 suspected terrorists in camps in PoK were killed after "two units of the elite 2 Paras comprising 18-20 soldiers flew across the LoC in the Uri sector in military helicopters and carried out an operation." The total casualties, including those injured, is reported to be 200. This operation is said to have taken place in the intervening night of on Sep 20-21.

The whole thing apparently started with a tweet by one Sumann Sharrma [@SumannSharrma], and also a series of them from Anshul Saxena [@AskAnshul]. Both are stressing that it's not a rumour that it is confirmed development. There was also a tweet that PM Modi was closely monitoring the operation.

Other news media like India Today and Indian Express followed up on the tweets. They ran stories saying the Army or the Government aren't confirming the account.

But then why no word on it from Pak side?

Of course, no one in the Indian military or political establishment will come on record authenticating a covert operation. But surely Pakistan is not going to keep quiet. The relatives and friends of people who died or injured aren't going to keep quiet. Nawaz Sharif would have made it a big issue in his UNGA speech yesterday. And India too wouldn't have risked such a thing when UN is in session.

It difficult to say whether such incidents are true or just conspiracy theories. There have been some incidents along side that seem to be giving credence to this story. One is that Pakistan International Airlines suspended its flights to Gilgit and Northern Areas. That was to apparently to keep the airspace free for a retaliation just in case Indian forces launch an attack. Two, Nawaz Sharif spoke to the Pakistan Army chief before his address to the UN. And three, India's defence minister Manohar Parrikar said sometimes there is nothing wrong with "knee-jerk reactions".

My doubts are:

- When there is such a public clamour for Indian retaliation, why should India be quiet about this operation, and still take the flak from people for not doing anything?

- If such covert operations can done like this, why couldn't it be done long back; or even as and when it is deemed necessary secretly smash all the terror camps along the LoC? We won't be having this big problem in Jammu and Kashmir in the first place.

Let us wait till something concrete emerges on this.

Thursday, September 1, 2016

Donald Trump's immigration policy - Utopian or practical?

I got up early to watch Donald Trump make that much-awaited, much-postponed speech on his immigration policy. It was to start at 6.30 am IST (9 pm ET) but started half an hour late.

He didn't disappoint. There were lot of speculations as to whether he will soften his approach and try to win back the moderates. He didn't. In his forceful, ultra-nationalistic and blunt style, he laid out a 10-point plan to rid the US free of the danger stemming out of undocumented, unlawful migrants.

Some of the points he made:
  • The Mexican wall will come up, and Mexico will pay for it
  • The wall will be a high-tech one with sensors and all to monitor movement
  • No sympathy and amnesty for migrants
  • Out of 11 million illegal immigrants, 2 million are criminals. They will be deported.
  • Law enforcement officials who know who and where these criminals will have to act immediately. 
  • Many countries have refused to take back immigrants sent back from the US. They will have to take them back. US won't keep those criminals, just because the countries from where they came from won't take them back.
  • No visa for people from countries which have no proper vetting system. He named Syria and Libya
  • Immigrants will be subjected to extreme vetting
  • Welfare of Americans will come before welfare of migrants
At the outset, there was a huge precipitous gap between what Trump spoke alongside Mexican President Enrique Peña Nieto at a joint press conference in Mexico City, and a few hours later at Phoenix. Does Trump really mean what says, and is he saying what he really means?

For his constituency, today, he gave some clear solutions to what he sees as the gravest threat to America - the problem of illegal migrants. But how much of it is practical, and attainable is left to be seen. Talking of plans is one thing, making them work is another.

In the high-voltage political crucible of Washington, there is a many slip between ideas and execution. Even if Trump gets elected, and many of his solutions are sure to run into political roadblocks. This is a campaign speech, and one needs to take it only on its face value.

Problem of migrants is not just an American problem. Every country faces it. And no doubt, it's a grave one. No country can afford to have undocumented illegal migrants enjoying the benefits meant for law abiding citizens. But to paint all immigrants with the same criminal brush will create more problems than solutions.

Trump is looking at a very US-centric approach to problems. But he forgets that America is part of a global community. America needs the rest of the world, just as the rest of the world needs America.

It remains to be seen if one campaign speech can do a world of good for Trump, after he made a series of reckless gaffes and slipped in ratings.

Anyway it will be interesting to see how Hillary Clinton and her campaign responds.