Archive for November 2nd, 2016

Mumbai’s crowded jails to go vertical…

November 2, 2016

In US there is discussion over private and public prisons.

In Mumbai most discussions are around lack of space and need to adjust. This issues reaches Mumbai jails as well. The prisons already have nore prisoners than capacity and continue to be filled. The govt to create additional space vertically now:

The state home department has proposed addition of floors to solve the problem of overcrowded jails in the city. Mumbai’s jails are presently filled 300-400% of their capacity.

“Prisons in the city are only ground floor or ground plus one structures. We will construct additional floors to make them ground plus three or ground plus four structures,” additional chief secretary Vijay Satbir Singh said. There is no space to expand horizontally, so going higher up is the only option, he said.

He said vertical prisons are there in many cities abroad and adequate security measures will be added when the floors are increased.

But Taloja prison in Navi Mumbai will be expanded horizontally, as their is vacant space next to it. It has adequate space and inmates from here are regularly transferred there.

This organisation of prison activity is a really interesting subject. Right from who should run prisons to how to organise them is a nice way to think through several issues of economics and law..

Venezuela now weighs cash and Zimbabwe to introduce new currency..

November 2, 2016

These two countries Venezuela and Zimbabwe are classic cases of monetary mismanagement of this century.

In a recent article, Venezuela now weighs currency rather than count the same.

At a delicatessen counter in eastern Caracas, Humberto Gonzalez removes slices of salty white cheese from his scale and replaces them with a stack of bolivar notes handed over by his customer. The currency is so devalued and each purchase requires so many bills that instead of counting, he weighs them.

“It’s sad,” Gonzalez says. “At this point, I think the cheese is worth more.”

It’s also one of the clearest signs yet that hyperinflation could be taking hold in a country that refuses to publish consumer-price data on a regular basis. Cash-weighing isn’t seen everywhere but is increasing, echoing scenes from some of the past century’s most-chaotic hyperinflation episodes: Post-World War I Germany, Yugoslavia in the 1990s and Zimbabwe a decade ago.

 “When they start weighing cash, it’s a sign of runaway inflation,” said Jesus Casique, financial director of Capital Market Finance, a consulting firm. “But Venezuelans don’t know just how bad it is because the government refuses to publish figures.”

Zimbabwe on the other hand, plans to introduce a new currency.  It will be backed by a bond and trade at par with US Dollar:

Zimbabwe’s president has formalized a law allowing the introduction of a new currency this month.  The new bond notes, backed by a $200 million Afreximbank bond facility, will be regarded as legal tender for all local transactions.

 This southern African nation abandoned its own currency in 2009 after inflation hit 231 million per cent, according to government figures. It has been using a multi-currency system dominated by the US dollar since then.  
Severe cash shortages that the Reserve Bank of Zimbabwe attributes to low exports have hit this once-prosperous country in recent months. The bank says the bond notes to be introduced on an unspecified date this month will trade at par with the US dollar.
How difficult it has been to understand the basic lessons of money for some of the countries…

Are BJP-ruled states making India more attractive to businesses?

November 2, 2016

World Bank’s 2017 doing business rankings did not see much improvement in India’s rankings. Indian government was highly disappointed with the outcome saying the rankings do not capture several efforts taken by the government. Moreover, it does not capture the inter-state differences.

The World Bank followed this with State-wise ranking along with DIPP. It shows some interesting changes in the rankings. Above all, the report indicates BJP governed states are doing much better than other party states:

A few days ago, the World Bank in its Ease of Doing Business Index ranked India 130 out of 190 nations in the world. It seems the PM Modi led National Democratic Alliance (NDA) government didn’t take too kindly to the embarrassing findings. A week after the original index was published, the World Bank in a new report has ranked all BJP ruled states as the best places to do business in India.

Two states with governments supportive of the BJP – the newly born Telangana and Andhra Pradesh – top the rankings. At the helm in Andhra Pradesh is Chandrababu Naidu –  a man who has always been considered a darling of big businesses. Telangana is helped by state capital Hyderabad, that fell into its kitty after Andhra Pradesh’s bifurcation in 2014. Hyderabad contributes 95% of Telangana’s service sector revenue, 99% of its information technology exports, houses half the manufacturing hubs and almost half of all Special Economic Zones (SEZs) in the state. It is Naidu who is credited with having made Hyderabad attractive for global businesses.

All other states in the top ten, barring Uttarakhand which occupies the ninth place in the rankings, are ruled by the BJP. Even Uttarakhand’s ranking as an easy place for businesses is probably because of a few industrial towns in the Terai region. The mountains have been in a state of decline and are a no-go for businesses due to lack of supporting infrastructure and logistical challenges of setting up shop in the Himalayas.
So the World Bank’s report, in effect, says that despite India ranking 130 out of 190 nations in the ease of doing business, it has achieved whatever it has only because of the BJP ruled states. The Congress and regional party ruled states seem to be letting businesses and the country down.
Obviously, these rankings are relative. There is a lot of catch up game even in BJP states.
Though, if one looks at things historically one should not be surprised. BJP has always been seen as a party run by business oriented people whereas Congress by social development. BJP leaders have usually understood business issues better than other party leaders. Their state leaders were thwarted by the Central govt which rarely had BJP at helm. Now with two to tango, things are taking a much better shape than earlier years.
The obvious question is whether all these measures lead to welfare of people. creation of stable jobs and so on. We will have to wait for sometime to figure the outcome of these developments…

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