Is India Fit for Democracy?

by RAJARSHI GUHA ROY 

India – the land beside the river Indus, is a large country with different hues and shades of opinion . This very existence of different shades of opinion can be attributed to the migration of different races to this part of the world over different periods of history. As the ancient Indian history goes, overtaking the ancient Proto-Australoid people in the pre-Dravidian era , the Dravidians took control of the land . Soon came one after another the Aryans and the Macedonian people. History never stopped and took its new turn with the Mauryas, the Guptas, the Delhi Sultanate, the Mughals and lastly the British Raj. Thus, the intermixing aboriginal traits have given rise to different habits, opinions and ideologies, but all under one big roof, i.e., the Indian Land. Thus, ‘Indian Democracy’, in the true sense of the term, is deeply rooted in the long history of the land and is not a mere entity in the pages of the Indian Constitution. The geographical spectrum of the land with its varied inhabitants, viz., from Kashmir to Kanyakumari and from Kutch to Kohima is very loyal to the need for democracy and sovereignty of the nation.

The Fathers of the Indian Constitution post-Independence had thought it correctly to instill democracy in the land after the Victorian Hangover of the British Raj, being loyal to the vastness of the land and the differences of ideologies between various sections of the people. They dreamt of tying the people from different backgrounds, religious ideologies and social backgrounds into a single string of unity and solidarity in this way, but over the years, various internal problems and many obvious obligations of democracy have seemed to paralyse the governance of the country. Let us look deeply into the problem.

The Indian Constitution has allowed for co-existence of various political opinions, thus the parliamentary structure of governance stands strong as a tool to administrate such a large country with many diversities. The ‘Fundamental Rights’ rooted in the Constitution also entails to freedom of speech and expression. But continuous misuse of these rights, which many hail as the obvious obligations of a democratic nation, has stalled the growth of India as a country.

Issues lighting up the misuse of democracy in India :

1. The political honchos of today are only engaged in usurping political power and monetary benefits rather than serving the people of India and developing the nation. Thus, democratic rights invariably allow corrupt politicians to form the organizing committee of the Commonwealth Games and on the other hand, people from different ideological backgrounds go beyond their limit and literally slam the games, not even thinking that the event is a ‘Growth Indicator’ for our very own country. Thus, the flip-flops regarding the exploitation of democracy, co-exist.
2. ‘Maoism’ – which has been termed as the biggest national internal security threat, both by the Prime Minister and the Home Minister of India, in recent past, has proved to be nothing but an indirect outcome of exploitation of democracy. ‘Freedom of Expression’ has turned into ‘Freedom to kill innocent people’, and ridiculously, this has been hailed as a ‘Revolution’ against the State , thanks to the alleged deprivation of rights by the Government in the tribal areas and forests. More so, an intellectual stratum of the society at large is upholding this national menace for some unknown, vested interests of their own. Experts hail this as obvious obligation of democracy.
3. ‘Separatism’- the term in the first go itself, reminds us of Jammu and Kashmir. The picturesque state has turned into a heaven for stone-pelters and at present, places like Srinagar, Ganderbal, Jammu, Samba etc. is very similar to the period of ‘Matsyanyaya’ meaning ‘Utter Anarchy’, in Bengal during the rule of Gopala long back before 750 AD. The North-Eastern Parts of India, Darjeeling in West Bengal, Telengana in Andhra Pradesh are all children of ‘Separatism’. The brutal violence associated with all the ‘Democratic’ movements denounces nothing but ‘democracy’ itself. In this regard, mention may be made of the formation of new states like Uttaranchal, Chattisgarh and Jharkhand, which have all been results of  so-called ‘Democratic’ Movements.
4. ‘Horse-Trade’ in the political arena of India is a direct hit on democracy where ideologies and opinions accept defeat to money, and that too, a lot of money.
5. The recent honour-killings, synthesized by the Khap-Panchayets in various parts of Haryana and Uttar Pradesh mainly, have literally slapped ‘Indian Democracy’ on its face, leaving the entire governing machinery of the country paralysed. Same can be attributed to the Godhra communal riots, the Babri Masjid demolition and the communal  riots following that. It’s very obvious that democracy will take a backseat if greed and money reign supreme in the country with the government officials doing nothing substantial and only penning down reports, which never see the light of the day.
6. The All-India Strikes called by various political parties and trade unions depict the misuse of democracy. Though the political leaders claim that they, through these strikes, fight for the ‘Aam-Aadmi’, but the stark reality tells the story of the plight of common people on these strike days when they miss their daily wage and go hungry for the entire day with their family.

Nevertheless, it must be clearly understood that a population of 120-plus crores with so many religious, social, economic and political ideologies has to fall back on ‘Democracy’ for proper governance. Democratic structure of the nation has been a boon to innovations, creations, ushering of new ideologies and development of the nation as a whole. But in order to achieve an ideal state of democracy, a few basic requirements must be fulfilled like :

1. Proper education, both on Government and Private initiatives must be provided to the people of the farthest of Indian villages, specially among poor people and tribals. Electricity and Medical healthcare must reach all Indian villages. These basic civic amenities must not only be penned down in bureaucratic files but should see the light of the day in terms of implementation. Then only, the so-far deprived part of the Indian fraternity will feel themselves as ‘Indian’-s and anti-state insurgence will take a backseat.
2. Corruption should be measured on strict scales in every stratum of the society. The political leaders should take a note of this in terms of the monetary benefits which they crave for. Things like tax evasion, disproportionate assets must be monitored on a regular basis. The PIL and RTI should be implemented on a stronger note and the Information Commission-s and the CVC (Central Vigilance Commission) should be given more authority. Again, the Judiciary of the country needs to be faster in completing the trials of the accused. It is ridiculous that in a country where more than 50% of the people don’t get food twice a day, the parliamentarians yet after getting a whopping 300% hike in their salary, still vouch for a colossal 500% hike in their salary.
3. Various political opinions must have their own say, because that is the sweetest thing in democracy. But the difference in opinion should not stand as an obstacle when it comes to policy-framing inside the federal structure of government, i.e., the Central Government and the State Governments must work in tandem and the political parties must stand above all their political interests and ambitions when it comes to governance of the nation. They must respect the ‘People’s Mandate’, which is actually the most powerful entity in India and the ultimate manifesto of ‘Indian Democracy’.
4. Political manoeuvres with minority sections and the backward classes of the population must be done away with. Democracy does not mean playing with the sentiments of different sections of people for political gains. Had the political leaders of this country been more sensible, acts of terror, nowadays referred by different colours, like the phenomenal Babri Masjid demolition, would not have taken place.

The entire discussion here entails to the pros and cons of democracy and also the proper implementation of democracy. We made a tryst with destiny long ago and it is high time we look forward to an all-round development in all aspects of life like arts, culture, trade, sports, science, technology etc. rather then brawling over the same burning issues and putting our rich natural and human capital down the drain. Only then can we celebrate what the Fathers of our Constitution had bestowed upon us, ‘Democracy’.

Rupee declines; state-run banks seen selling dollars

The rupee was trading at 59.69 against the US dollar at 11.46 am today, compared to its previous close of 59.34/35. The pair has traded in a 59.55-59.79 band during the session.

Dealers say a large state-run bank and finance firms were early buyers, while some selling was seen from state-run banks, though not likely from the Reserve Bank of India.

The RBI was rumored selling dollars late on Wednesday to support the currency.

Copyright: Thomson Reuters 2013

Government raises FDI cap in key sectors including telecom, insurance

The government  on Tuesday  relaxed Foreign Direct Investment or FDI guidelines for  a range of industries including telecom, single brand retail and oil and gas in a bid to lure capital inflows, prop up the sliding rupee and rev up growth.

In telecom, 100 per cent FDI is now permissible, a move that's expected to bring in at least 10 billion dollars.

For the key sector of insurance, the FDI cap has been increased from 26% to 49%.  

In the contentious multi-brand retail sector, the cap remains at 51 per cent as decided in September, a move that prompted the exit of Mamata Banerjee and her Trinamool Congress from the ruling UPA, forcing the government into a minority.  A new hike of upto 74 per cent had been suggested by a committee headed by Economic Affairs Secretary Arvind Mayaram.

In sectors like petroleum and single-brand retails, an initiative for faster clearances means that for upto 49% FDI, projects will no longer have to first be cleared by the Foreign Investment Proposal Board or FIPB.

In defence, the cap remains at 26 per cent, though the government says it may allow higher FDI for cases that will help India acquire "state-of-the-art technology."   The Cabinet Committee on Security or CCS  will have to approve all such proposals.

India's weakest economic growth in a decade and a record high deficit in the current account, the broadest measure of a country's international trade, have made the rupee the worst-performing emerging Asian currency so far this year.

It hit an all-time low of 61.21 per dollar last week and is down nearly 10 per cent against the dollar since May.

To stabilize the currency, the Reserve Bank of India or RBI  has raised short-term borrowing costs, restricted funds available to banks and said it would sell Rs. 12,000 crore in bonds, effectively draining cash from the market.


Source: NDTV Profit

RBI hikes short term interest rates to support rupee

The Reserve Bank of India hiked short term rates late on Monday in the first strong measure to support the Indian rupee. These measures, aimed to curb the rupee's decline by tightening liquidity, came after Governor D Subbarao met Finance Minister P Chidambaram yesterday.

Here's what the central bank has done.

1) The RBI has increased banks' cost of borrowing short term money through the Marginal Standing Facility (MSF) rate and Bank Rate each by 200 basis points ( 2 per cent) to 10.25 per cent. The measure will make it unattractive for banks to borrow rupee (at cheap rates) and buy dollars (in the forward markets). This will reduce the pressure on the rupee.

2) The RBI has capped the amount banks can borrow from overnight markets to Rs. 75,000 crore. This is aimed to suck liquidity from the system. This will prevent banks from taking speculative position in forward markets (will support the rupee).

3) The RBI will conduct Open Market Sales of bonds of Rs. 12,000 crore on Thursday to further suck out liquidity from the system. Bond prices will fall and yields will rise. Higher yields will attract foreign investors in the debt market. FIIs have sold billions of dollars in the debt market ever since Fed Reserve Chairman Ben Bernanke signalled a tapering of the quantitative easing in the U.S. resulting in a 10 per cent drop in the value of Indian rupee. Net portfolio investments in India slumped to just $50 million in the three months to June from $11.3 billion in the quarter ending in April.

Market participants said the measures will give near-term support to the rupee.

"This could lead to some increased dollar inflows as overall interest rates in the economy will rise, but it could be temporary - that is, as long as these steps are effective," a dealer at a foreign bank told Reuters.

The RBI does not set a target for the rupee, which hit a record low of 61.21 to the dollar last week, but it does take measures to manage volatility.

However, the latest measures will weigh on long term interest rates. That's because banks may hike deposit rates to attract cheap funds, but the step will lead to higher interest rates driving up home and auto loan rates.

"These will come at a heavy cost to the economy as short-end rates will rise and that will make borrowing costlier and affect growth if these measures continue for long," A. Prasanna, economist at ICICI Securities Primary Dealership told Reuters.

Meanwhile, Prime Minister Manmohan Singh will discuss the proposal to increase Foreign Direct Investment (FDI) cap in sectors like telecom, retail and defence with his senior Cabinet colleagues later today.

Economist say liberalizing FDI rules will help attract foreign investment into the country, which is badly needed at a time when the rupee is the worst performing currency in Asia.

A weak rupee also poses political challenges for the government, seeking to win a third straight mandate early next year.

Source: NDTV Profit (With inputs from Reuters)

Nissan unveils Datsun Go, to be priced under Rs. 4 lakh

Car maker Nissan today unveiled the Datsun Go, a five-door hatchback that will be priced below Rs. 4 lakh. At this price, the car is expected to give strong competition to the volume segments of Maruti Suzuki and Hyundai. 

Though the car was unveiled today, the market launch will take place only in early 2014.

Nissan hopes to garner 10 per cent share in the Indian market with the help of the Datsun by 2016, Carlos Ghosn, president and CEO of Nissan and also the head of the Renault-Nissan alliance, said at the unveiling.

There will be two models in 2014, and a third subsequently a year later. These cars may have parts or platforms borrowed from existing Nissan products, but will not be cheapened or rebadged Nissan or Renault products. They will, however, most likely share engines and gearboxes with their cousins. The Go is an iteration of the same 1.2-litre petrol engine that powers the Nissan Micra.

Datsun will operate only in the sub-Rs. 4 lakh price band, and so its primary rivals will be cars from the Maruti Suzuki and Hyundai range. In fact, the idea is to offer buyers a more modern option to existing entry-level cars like the Alto and Eon at the low-end and the Ritz and i10 at the top-end.

Rivals will watch this closely, especially since the market has slowed down and sales aren't easy to notch up these days. Any threat to volumes segments will be seen as serious.

5 ways to teach kids about money management

Recent studies have shown that Indians across the major cities are not very good when it comes to financial planning. We can partly blame this on our social fabric which does not allow us ample opportunities to hone our money management skills during childhood. However, we, as adults, would do a great disservice to our children if we fail to instill good financial habits in them.

With rising medical costs and nuclear families gaining popularity, our children can no longer afford to be ill-prepared in financial matters when they grow up.

Here are five time-tested ways to teach your kids about good money management.

Be a good role model

Studies have proven that kids often follow adults in the house - most importantly, parents - as their first role models. One may be surprised to know that imitation plays an important part for kids to learn. Involving kids in household financial decisions is a good way to do this.

One can discuss, explain and take kids' opinion on everyday matters. Here are a few topics you can use to engage your kids on such matters:

• Shopping: Why you think buying clothes on sale is a better idea?
• Dining: Can a family enjoy the same tasty food in a less costly restaurant or at home?
• Utilities: Can reduced AC usage help in cutting electricity bills?
• Grocery: Why may not buying imported products be so cost efficient?
• Frugality: How, by spending smartly, one can save for birthday gifts for the elderly.

Encouraging, praising and rewarding kids when they exhibit good money management behavior is a good way to go about it.

Use video games

In the era of Xbox and Playstation, there are no better fun ways to teach your kids some financial skills. Kids can play popular online money management games such as Road Trip to Savings, Financial Football, Peter Pig's Money counter, Money Metropolis, Financial Soccer, Record shop tycoon, Burger Restaurant, and so on.

The good old family board game is still considered one of the best to impart valuable financial lessons. This way, kids will not only learn to count while spending quality time with family but also help you carry out basic calculations. The game of Monopoly helps kids learn how to manage limited money best and think the way a banker does.

Encourage saving towards goals

Discussing with children things they want to buy in near future - toys, games, bicycle etc. - will help them calculate how much they need to save each day to reach their goals. Gift them a piggy bank to put their savings in. Kids can also be guided about the importance of prioritising and trading off, since not all goals are achievable with the same resources. When repeated over a period of time, children start believing in long-term savings and develop financial discipline which adults lack these days.

Make them earn pocket money

Kids need to understand that money does not grow on trees but is earned through hard work. Children should be encouraged to earn pocket money by getting involved in different kinds of tasks. A kid of 7-12 years of age can easily handle household chores whereas teenagers can make a decent pocket money by taking up a part-time job. By working towards earning their own pocket money, children become more responsible and start valuing the money.

Give budget projects and allow mistakes

Passing an overall budget objective to kids and giving them money to come up with a plan to achieve the same is a good idea. For example, you can ask them to plan a picnic. Let them come up with all activities, food, fuel and other costs, within a strict budget. Let them, then, make payments for these expenses. Failure or mistakes are also the best teachers. Let your kids figure out that they have overspent on one activity at the cost of another or they simply underestimated the costs. They need to learn to make choices within the budget. Involve bigger kids in running and analysing your home budgets.

Source: NDTV Profit

Infosys Q1: 10 reasons why shares jumped 15%

Infosys shares surged 15 per cent after India's second largest IT outsourcer beat June quarter earnings estimates. Infosys was the biggest gainer on the Sensex and Nifty benchmarks and single handedly drive the markets higher.

• Topline beat: Infosys Q1 sales rose nearly 8 per cent quarter-on-quarter to Rs 11,267 crore against estimates of 5-6 per cent growth. The big beat, however, was the 2.7 per cent sequential jump in dollar sales against estimates of flat (0 to 1 per cent) growth. Hitesh Shah of IDFC Securities told NDTV that revenue growth was pretty encouraging considering that slowing growth was the biggest concern for Infosys.
• In constant currency, Infosys' revenue rose 3.4 per cent, much higher than Street estimates of 1.3 per cent growth.
• Infosys reported volume growth (increase in man-hours billed) of 3.4 per cent against 1.8 per cent sequential growth in the March quarter. Volume growth in the IT services grew by 1.8 per cent. However, there was a sequential price decline of 0.7 per cent, suggesting continued pressure on pricing.
• Profit beat: Infosys net profit declined 1 per cent q-o-q to Rs. 2,370 crore against estimates of Rs. 2,330 crore to Reuters poll. The company posted a 3.7 per cent year-on-year increase in its first-quarter net profit.
• Operating margins for the first quarter grew at 23.5 per cent, same as last quarter, but higher than against Street estimates of 23.4 per cent despite some salary revisions kicking-in with effect from May 1. CFO Rajiv Bansal told NDTV that we did a fantastic job on the margins front. The positives were the rupee and the utilisations went up. (Utilisation is the ratio of the total manpower that is billed to total billable hours). However, Mr Bansal cautioned that going forward margins may fall by 300 basis points in the next quarter and 240 basis points for the full year on account of salary hikes.

• Infosys retained its full year dollar sales guidance at 6-10 per cent. This comes as a big relief to investors, who were prepared for the worst after global investment bank Morgan Stanley, warned that Infosys may revise its guidance downwards earlier this month.

• Infosys sales in North America, its biggest geography grew by 4.9 per cent sequentially. Among the frontline IT companies, Infosys has the biggest reliance on U.S. for revenues. Similarly, financial services, Infosys' biggest vertical, grew by 1.9 per cent sequentially. Infosys also won seven large deals in the first quarter; a few of them are over $100 million over 3-5 years.

• Infosys management remained "cautiously optimistic" though chief executive S. D. Shibulal said "sentiment towards Infosys is very positive among clients." Mr Bansal said Infosys has done "reasonably well" in the first quarter. However, Mr Shibulal said regulatory challenges (read visa issues) remain.

• Analysts bullish: Most experts said Infosys has posted impressive numbers in the first quarter. UBS said Infosys has beaten revenue, margins, and earnings forecasts (It has a target of Rs. 2,900). Nomura said Q1 numbers overall look very impressive. Domestic brokerage Kotak retained its "add" rating on Infosys on inexpensive valuations.

• The Murthy effect: Sanjeev Hota of Sharekhan told NDTV that it's a good start for Infosys after NR Narayana Murthy coming in.

Source: NDTV Profit