Archive for December 18th, 2015

How rising veggie prices leads to innovations in home cooking..

December 18, 2015

We either treat people as too dumb or too smart in economics. A better representation is people being somewhere in the middle. Smart in some aspects and dumb in others (like financial planning). People are usually smart in reacting to prices especially those of daily consumption. If prices go up and there are alternatives, people tend to choose the latter.  We see this especially in food items.

So Jug Suraiya has this interesting piece on on how rising veg prices has led to his rethinking on wasting veggies:

The rising prices of vegetables – after onions, it’s now the turn of tomatoes to go through the roof – have a silver lining: it incentivises us to invent, or re-invent, new recipes.

This happened in our kitchen the other day when in the course of the making of a cauliflower sabzi i noticed that the stalks of the gobhi were being thrown away by the household help. Instead of chucking them in the garbage, why don’t we chop them up and stir fry them? i asked.

So we did. And the stir-fried stalks tasted great. But while i was patting myself on the back for having invented a new recipe, i discovered – thanks to Bunny’s Gurgaon Foodies group – that it wasn’t new at all. In fact it was an old, traditional recipe and even had an official name given to it. It’s called danthal, which not only tastes great but is also very wholesome, the stalks being by far the most nutritious part of the cauliflower.

Similarly, the leaves of the mooli, the white radish, which are generally discarded can be turned into a palatable and healthy dish, which also helps you cut down on food costs.

Coming as she did from the lean-ribbed aridity of Kutch which fostered frugality, my mother always ensured that there was never any wastage in the kitchen. After shelling peas, she wouldn’t throw away the pods but turn them into a palatable dish. She’d do the same with potato peels.

In the mango season, after the fruit had been eaten the large seed inside -called the gotlo in Kutchi – would be put into the smouldering embers of the coal-fired choola and baked. Cracked open after baking, the gotlo revealed an edible kernel. Years later when i first ate them in the chill of a London winter the taste of roast chestnuts bought from a streetside vendor would bring back memories of the hidden delicacy that lay buried within the heart of the mango.

In such decisions, you bring the government/planner and you know the results..


A different kind of Call money market in Andhra Pradesh (and a tragic one)..

December 18, 2015

Call money is something usually associated with money markets. The name literally means money is available on a call from a lender and to be delivered back to the lender on a return call. Nowadays it means a market where lenders lend their surpluses on an overnight basis (if weekend then 3 days) on an unsecured basis (no collateral). Accordingly, you have call market interest rates which have become the preferred way for targeting interest rates for central banks.

It seems there is a different call market existing in Andhra Pradesh which is more on traditional lines. Here, money is available on a phone call and is given back on a call. The interest rates are crazily high. In a real tragedy, one such family committed suicide as they could not pay back the interest after getting a call. Thiis how one got to know of this market. 

On Thursday morning, 36-year-old Siva Kumar, a resident of Diguvanagulavaripalle village in Chittoor district, took his family to the Ayyappa temple. After offering prayers, they rode on a mobike to neighbouring Errajivaripalem village. On the banks of the Sitamma lake, they then posed for a family photograph.  

It was a picture of a family on an outing — till all of them jumped into the water. Eyewitnesses said villagers tried to save the family of four — Siva Kumar, his wife Leelavathi (30) and their two children Naveen (8) and Kavya (6) — but failed. Their bodies were retrieved in the evening.

The mass suicide showed that the ‘call money lending’ racket in Andhra Pradesh has taken a deadly turn. The family has left behind a note naming the moneylenders whose harassment forced them to take the extreme step. Their neighbours too told the local media that Siva Kumar was being constantly harassed by moneylenders.

The ‘call money lending’ racket makes loans readily available on the basis of phone calls. The moneylender comes to the borrower’s doorstep with the cash and a promissory note. The interest rates range between 120% and 200%. The lender, similarly, can ask for the money back over the phone at any time. If the borrower can’t repay, life and property comes under threat.

It runs both deep and wide in Andhra Pradesh, evidence gathered by the police during raids in Krishna, Guntur, Kadapa, Prakasam, East Godavari and several other places show. The raids also exposed the deep-rooted association private moneylenders have with leaders of all political parties as well as some bureaucrats. The police also discovered how moneylenders threatened, coerced and dragged women into prostitution when they could not repay loans in time.

This is such a sad story. How distorted financial markets continue to create havoc with public. How people continue to avail loans from informal financial sector and pay via their lives. So many years of efforts of financial inclusion is still far from complete.

One also needs to note how such informal financial markets emerge and thrive with huge political support. This one uses technology to give money in a very prompt manner but on non-payment use the traditional coercive  ways to force repayment or think of other ways to escape.

Is Rupay undermining competition in card space?

December 18, 2015

How about getting a taste of one’s own medicine? Visa and Mastercard have dominated the card space for ages now. One is sure some players wanting to enter the space would have been threatened by these two players. As this blog has pointed in the past, how Rupay has emerged as a competitor for the two from nowhere.  Being a state backed initiative, Rupay’s charges are much lower.

The Rupay card has become govt’s main way to push financial inclusion. This is irritating the two major players:

US card companies MasterCard and Visa have complained of an invisible mandate to keep them out of Jan Dhan Yojana, the government’s financial inclusion programme, and demanded a level playing field with government-backed card issuer RuPay. Stung by a sharp rise in cards issued by RuPay, thanks to Jan Dhan, MasterCard and Visa say they have asked Reserve Bank and the government to consider their services, which are cheaper than that of the local card issuer.

Not sure what the mechanics are and how true are these allegations. Competition is preferred any day and if govt is not allowing it, it is a mistake. Competition keeps you on toes and one does not wish Rupay to become rusty.

It is really interesting how a state driven project (that too in the field of finance!!) can undermine MNC giants at their own game….

The economic consequences of accused politicians in India..

December 18, 2015

Nishith Prakash, Marc Rockmore and Yogesh Uppal analyse the impact of electing accused politicians on India.

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