Archive for April, 2017

India’s love affair with imported dogs over indigenous ones..

April 28, 2017

Soumya Rao of Scroll has a fascinating piece on Indians insatiable demand for anything imported. Just that this piece is on dogs:

It’s easy to identify what a German Shepherd, Labrador and Saint Bernard have in common: they’re furry, adorable canine companions with massive fan bases all over the world. But what about the Chippiparai, Jonangi and Kombai?

Even ardent animal lovers might stumble a bit here, but these too are dog breeds which have another thing in common – they’re all Indian. Skilled, sturdy and well adapted to the country’s tropical climate, these dogs are great workers and excellent companions. Unfortunately, the other characteristic Indian breeds share is that they’re disappearing.

Almost half the known breeds have ceased to exist, while several others are at the risk of dying out. In their rapid decline is a story of years of ignorance and neglect, a telling tale of the status of dogs in a country that’s never quite grown to accept them. Over the last few decades, while foreign breeds have caught the fancy of animal lovers across the country, Indian dogs continue to be shunned.

Sigh!

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The famed Udan scheme starts with a subsidised fare?

April 28, 2017

This could be another Marie Anotoinette moment for the Government. The first was obviously that people dont have cash? Let them pay by digital money instead.

After much publicity, the government launched the Udan scheme which plans to make hawai chappals wearing people use flights. They can’t use roads, let them fly instead!

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How Fiji Central bank honored and celebrated the country’s first Olympic Gold medal win in Rio..

April 28, 2017

An interesting speech on how central bank and governments keep the feeling of nationalism going.

Fiji won its first medal ever in Rio Olympics in the sport of Rugby 7.  The central bank decided to honor the win by issuing a colored coin but the project got into difficulty as only one side could be colored. This led to delay leading to some compromises.

The episode is nicely covered in this speech by the central bank governor Barry Whiteside:

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Now central banks are weary of private digital money: How history is being repeated the other way round..

April 28, 2017

Before central banks became monopolies of currency issuance, private banks started issuing their own notes. These notes were backed by gold/silver. However, some banks could overissue currency leading to mismatch between currency and metal base.

It so happened that a Swede bank – Stockholms Banco- over issued its banknotes. This led to a kind of run on the bank leading to all kinds of crisis. The bank was shut leading to jailing of its founder  Johan Palmstruch. But the seeds had been sown and the King established another bank called Bank of the Estates of the Realm in 1668. This bank eventually became Riksbank, known as the first central bank of the world. (Much more here)

So basically, early central banks were formed for two purposes. Prevent this overissuance of private bank money (as in Riksbank) or financing wars (as in Bank of England and Banque de France). They were not really central banks right at the beginning. The Central bank we know today came via evolution over multiple years as Governments realised the power of money and concentrated most powers under a central bank financed by them.  Though early central banks were private banks which were eventually nationalised.

Fast forwarding to today. With digital money, it is becoming possible for private players to once again enter the money space. And not surprisingly central bankers are worried as a monopoly would be.

Norway’s central bank  Deputy Governor Jon Nicolaisen gives a speech cautioning against these private money. He gives an example:

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A Hayekian solution to realising potential of Indian heritage which so far has been an utter waste…

April 27, 2017

One does not agree much with Niti Aayog’s recent ways (see this and this for instance).

However, there is little to disgaree in this article from its CEO Amitabh Kant. Given the huge history of India, preservation and highlight of its heritage buildings is just a given thing. But all we have done is destruction of these buildings. The entire experience of going through most of our heritage buildings is just so painful.

We know what the problems are. So not getting into that discussion. What is interesting is to see a Government official suggest a more decentralised solution towards the problem:

If we are to pass on our built heritage to future generations in a better condition than we inherited it, liberalization of the cultural sector needs to be brought in and responsibility entrusted to private entities, universities, non-profits, even resident welfare associations. A combination of non-governmental partners engaging the specialists required and government agencies supervising conservation efforts could ensure that the highest standards are met.

Heritage buildings everywhere utilize local materials; the skills to work upon these are in the local communities. Obviously, any conservation effort then has to source locally—creating employment and economic opportunities. Many an Indian ruler commissioned forts, palaces and temples in times of drought as a life-saving economic incentive for the populace. “Make in India” objectives will thus be met by any well planned and implemented conservation effort while simultaneously creating an economic asset that continues to pay rich dividends for years to come.

Only a limited number of heritage buildings are tourist attractions; for the rest, new functions need to be incentivised and planned. Most of the 600,000 protected heritage structures in the UK are in private ownership—and as historic buildings are considered better built, they command high premiums. Just as the Indian government’s ministry of tourism funds the tourism corporations of all states, Central government grants could be made available to fund conservation efforts by the states and private owners. Property tax waivers, permission for change of land use and transferable development rights are amongst other incentives owners of heritage buildings or those residing within the 100m “prohibited zones” of nationally protected monuments could receive. Besides being used as hotels or museums or libraries, heritage buildings could also easily be adapted to serve as schools or clinics—lending economic value to local communities. While representing a higher aesthetic and building quality, it is always more economical to convert a building than to build afresh.

There is an example where this has been a success:

One of the world’s most frequently cited conservation success stories has resulted from the non-profit partnership established by the Aga Khan Trust for Culture with the Archaeological Survey of India (ASI), Central Public Works Department and the South Delhi Municipal Corporation in the Capital’s Humayun’s Tomb-Nizamuddin area. Here, over a 10-year period, conservation works have been undertaken on over 40 structures, leading to a tenfold increase in visitor numbers and the doubling of the number of World Heritage Sites; they now number 11, in addition to Humayun’s Tomb. The Aga Khan Trust has assisted the ASI in taking ownership of an additional 35 acres of land, freeing it from encroachment and implementing landscape restoration at the monuments. Over 10,000 trees have been planted in the process. With conservation work requiring 500,000 days of work for craftsmen, there is a strong case for making conservation works eligible for Mahatma Gandhi National Rural Employment Guarantee Act funds.

As a result of this partnership project, over 20,000 people inhabiting the adjoining Nizamuddin Basti today have an improved quality of life resulting from simultaneous efforts in street improvement, landscaping of neighbourhood parks, building of community toilet complexes, improved primary education and the provision of widely-used health facilities. The emphasis of the Sufi cultural legacy through cultural performances and exhibitions has also instilled a sense of pride in the local community. Providing appropriate vocational training has meant thousands of jobs and economic opportunities in selling souvenirs crafted by the women in Nizamuddin.

Just as anywhere else in the world, our built heritage can be leveraged for economic gain through tourism dollars as well as opportunities for craftsmen and local communities.

Hmm… I am sure there are examples of some failed projects as well.

But overall, a decentralised approach is likely to succeed more given the diversity and sentiments. We should try and involve more and more local communities giving them ownership over these projects.

Tourism has so much job creating potential in India. Pity, we hardly pay much attention to it other than charging higher fares to foreigners for visiting these sites. This is also ironical as most Indians neither have an idea about these sites in their own places nor intend to visit them..

RIP: Vinod Khannaji

April 27, 2017

Indeed a sad news as Vinod Khanna passed away.

I have grown seeing his movies many of those with Amitabh Bachchan. His personality and effortless acting attracted one to see those movies repeatedly. I must have seen his Parvarish umpteen times and still continue to do so.

He was one of those rare actors who was as good as a villain too for those who have seen Mera Gaon Mera Desh.

Those were times when leading actors burned their egos and agreed to work in multi-starrers. The idea always was to entertain public.  Within these multi-starrers one looked to compete with fellow actors and leave an impression.

Now a days we just see egos and seldom any acting..

 

A Party that didn’t sweep the streets for 10 years has swept the MCD polls again. Here’s why..

April 27, 2017

Someone on a social network commented that when Roman emperor realised they had nothing much to show to public. He invented gladiators and all the show to distract people from real issues of governance and growth. And people did oblige. We saw something similar with respect to Delhi Municipal Elections as well where the core issues were hardly discussed. It was just a issue of which personality will win.

What was also interesting was the way media put up the contest. Most channels and papers told news in a way which made it look BJP was the opposing party and given how elections have been recently, was about to sweep this one as well. We were hardly told BJP has been ruling MCD for 10 years and was actually the incumbent.

Yogendra Yadav who joined the Swaraj party but could not win a single seat dissects the results:

Why did the people of Delhi vote for a non-performing ruling party? Clearly, the answer does not lie in EVM tampering. Instead of making such rash and irresponsible allegations, BJP’s political opponents like myself acknowledge the fact that BJP is winning because the people are voting for it.

Clearly, those who voted for the BJP did not think they were rewarding the non-performing MCDs. The BJP managed to detach this election from the difficult municipal issues. Instead, it distracted the voters and the media into discussing nationalism, Kashmir, cow slaughter and national security – issues that have no bearing on the MCDs. It also managed to deflect popular anger against its sitting councillors by deciding not to re-nominate any of them. The Aam Aadmi Party also contributed to this decoupling of the elections from the real municipal issues by making it a personality contest. The AAP campaign was all about turning this election into a personal referendum for Kejriwal. Some of the hoardings did not even carry the name of his own party. Smaller players like Swaraj India, constrained by lack of resources and media attention, tried to bring the debate to municipal issues, but with very limited success.

In the end, the MCD polls became a simple popularity contest between Arvind Kejriwal and Narendra Modi and the people of Delhi appear to have chosen the PM over the CM. This cannot be explained by the ‘magical Modi wave’ sweeping across the country. We just need to remember that the Modi wave was no less strong in 2015 when the BJP bit the dust in the Delhi assembly elections. If anything, the PM’s popularity was a shade higher at that point, having scored an unprecedented victory in Maharashtra and Haryana following his Lok Sabha success. Unlike now, his party did not face any local anti-incumbency either. The Congress and the AAP were the prior incumbents then. We cannot escape the difficult question: Why did the Modi wave fail to work in 2015 and appears to be working in 2017?

The difference lies in Delhi’s experience with the AAP government since February 2015. Within a few months of coming to power, AAP lost its moral sheen. Its promise of good governance also turned hollow as the government had little to show for its track record except a partial reduction in electricity bills and additional funds for school education. Instead, the government has been busy playing blame games against the Central government and its representative, the lieutenant governor. No doubt some of these complaints are valid. But an over-reliance on this blame game has left the people of Delhi – like my Ola driver – sick and tired. The personality cult of Kejriwal is beginning to boomerang as he loses this personal referendum. The AAP’s meteoric rise now threatens to turn into a meteoric fall.

The dance of Indian politics…

The 2017 Clark Medal shows precarious state of economic history..

April 27, 2017

I wish I had written this post. Dave Donaldson recently won the Clark medal for his work on economic history of Indian railways.

A Fine Theorem blog points how difficult the journey has been. It highlights how difficult it is to publish economic history work in mainstream journals, given his railways paper has been forthcoming for 8 years!

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The operation and demise of the Bretton Woods system: 1958 to 1971

April 26, 2017

Michael Bordo explains the BW system:

 He says key reason for breakdown was inflation in US:

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Are states led by queens less prone to conflict than states led by king?

April 26, 2017

Fascinating paper by Oeindrila Dube and S.P. Harish (HT: MR blog).

The answer seems to be yes. Moreover, married queens were more likely to attack than unmarried ones:

Are states led by women less prone to conflict than states led by men? We answer this question by examining the effect of female rule on war among European polities over the 15th-20th centuries. We utilize gender of the first born and presence of a female sibling among previous monarchs as instruments for queenly rule. We find that polities led by queens were more likely to engage in war than polities led by kings. Moreover, the tendency of queens to engage as aggressors varied by marital status. Among unmarried monarchs, queens were more likely to be attacked than kings. Among married monarchs, queens were more likely to participate as attackers than kings, and, more likely to fight alongside allies.

These results are consistent with an account in which marriages strengthened queenly reigns because married queens were more likely to secure alliances and enlist their spouses to help them rule. Married kings, in contrast, were less inclined to utilize a similar division of labor. These asymmetries, which reflected prevailing gender norms, ultimately enabled queens to pursue more aggressive war policies.

I would think otherwise. Unmarried queens should be attacking more given insecurity over their kingdom.

Whatever, fascinating stuff. What all research people are doing.

Would be interesting to do similar analysis for kings and queens in India as well..

As developing world aspires to become the developed US, the developed US is becoming like a developing country..

April 26, 2017

Prof Peter Temin of MIT who is a distinguished economic historian warns about decline of US. He actually goes a step further and says US has descended into a developing economy. He has recently written a book called The Vanishing Middle Class.

He actually says America is no more one country but divided into two parts. One part keeps growing and other keeps declining. The explanation is quite similar to India vs Bharat:

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The global history of tea (and much more)..

April 25, 2017

A superb post by Maddy’s Ramblings blog. We take tea so much for granted in India, that we hardly pay any attention on how it became such an important drink for us.

Tea became a drink favored by all the Indian classes only in the 20th century and was at times associated with the working classes or certain religions. For example in Tamil Nadu, tea was considered a Mussalman’s drink while Coffee was popularized by the Brahmins according to Chalapathy’s research. What is of course interesting is that tea became a commonplace drink in India only after the arrival of the British. The routes that this simple leaf took to become a perennially favorite drink of the masses presents a remarkable story of ingenuity and single mindedness of the Englishman, perhaps in pursuit of refinements to his otherwise unsatisfactory life back in the blighty and the hope of minting more sterling. This leaf as you may recall, went on to become the symbol of national resistance back here in America when in 1773, Bostonians destroyed a good amount of British tea laden in three ships when rebelling against the tea act.

Trying to find out when and how tea drinking originated is quite difficult and there are quite a few conclusions, but most agree that it all started in South Eastern regions of today’s China, many eons ago, in any case before the advent of the Common Era. Legends and lore have also crept in such as the sprouting of the tea plant from the eyelids of the south Indian monk Bodhidharma, at Shaolin. Tea preparation and its drinking became a ritual, an art so to speak in various Chinese regions and it is rumored that the Manchurian method was what popularized the so called ‘builders cup’ or concoction with milk and sugar. It is also said that one Mme de La Sabliére, a French hostess of an influential literary salon during the 17th century, is among the first to add milk to tea.

Some others opine that milk was added to stop porcelain from cracking, or there is this story that unscrupulous employers added milk to cool down tea quickly and therefore reduce the time taken for tea breaks. Tea cups, saucers and the pots of course originated in China, so also the fine porcelain medium or bone china in their manufacture. And as time went by, the Chinese and British spent time sipping it daintily from ornate chinaware or brassware and perfecting the art of serving and drinking tea in elaborate sessions, the people of Kerala perfected the art of slurping tea from the omnipresent standard ribbed tea glass! You won’t miss it, for that is what they serve it in at any Chayakada, to date!

From those Chinese regions, tea traveled to the Middle East and the Mediterranean lands to become somewhat popular with the Arabs though coffee was their forte, till all of a sudden, they turned in the 19th century to embrace tea. The first to port tea to Europe was either the Portuguese or the Dutch, a matter still hotly debated, not really the British, but they quickly caught on, as we shall soon see. Back here in India, the EIC had by then firmly entrenched themselves in the various regions and went on to enrich themselves and Britain with trade of various goods from and to India. 

There is much more in the post and is fascinating throughout.

Global history becomes really fascinating when you track it via commodities like say cotton, coffee or tea. There are just so mnay factors, planned and unplanned which go into making these commodities the key to global affairs..

How farmers in North Kerala are using an age-old water system to beat the drought

April 25, 2017

After destroying them, one is rediscovering the old systems to find and conserve water.

TA Ameerudheen of Scroll points how farmers in Kerala are using the old way of finding Surangas (canals) to fight drought:

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How to become D-Mart of Indian banking? By simple banking and keeping away from limelight…

April 25, 2017

D-Mart clearly is one of the most important stories of not just retail sector but even generally. The retailer not just served customers with amazing discounts and efficient service but also stayed away from all limelight. People only started noticing as it filed for IPO and then listed in a blockbuster fashion.

It is not as if only retailers want to be the next D-Mart. Firms in other sectors are aspiring to be D-Mart  in their respective sectors.

For instance, Fino payments bank wants to be the D-Mart of banking. This is quite a change as most want to be future Citibanks, HDFC Banks etc.

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How Tirupathi temple reduces food wastages…

April 25, 2017

As government plans to fix sizes of portions served by star hotels and restaurants, there are examples from organisations who are playing a self regulatory role.

Likes of Tirupathi Balaji temple use both technology and long queues to ensure there is less food wastage:

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Niti Aayog to give 7-year strategy and a 15-year long-term vision?!

April 24, 2017

It is often said if you want to do away with an institution, just dismantle it completely. If you think of replacing it with another one, there are chances that the second one will just eventually become a clone of the first one. The longer the first one has served the more this is likely to be true as well.

We are seeing this in the case of Niti Aayog. It has replaced Planning Commission with Niti Aaog (meaning Policy Commission) but gradually it is just becoming the same type which it wanted to replace. It has similar set of advisers who see no wrong with whatever the government does. So much so, it even releases reports which don’t stand upto facts.

Apparently the 12th plan got over on 31 March 2017.

Niti Aayog held a recent meeting in which we see new buzzwords like strategy, vision and so on. And 5 year is to be replaced by 7 year , 15 year and so on. The body is also sticking to 8% growth rate assumption which was hyped by Planning Commission earlier. This 8% assumption has been behind most of India’s problems today as expectations have fallen short leading to all kinds of mismatches.

What is even more perplexing is how the Commission did not discuss the most important issue haunting India – lack of water. We can keep making all kinds of claims about economy growing thrice of its current size to keep pleasing the media and international bodies like credit rating agencies. But on basic aspects we are no where close to even our neighbors.

Water should be our number one priority across government and policy.

Does RBI’s Monetary Policy Committee have powers to vote on reverse repo rate hike..

April 24, 2017

An intriguing piece by Aparna Iyer of Mint (HT: Niarajan).

She says MPC minutes of RBI’s April 2017 policy  reveals an interesting paradox. The policy made headlines as central bank raised Reverse Repo rate. However, Minutes show none of the members voted on the reverse repo decision.

Why? Well as per the Government, MPC can vote only on repo rate!:

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The ancient seaports of India which once thirived…

April 24, 2017

S.Muthiah has a fascinating article which once again shows how India was one of the trading powers till it got lost.

The author points to old names of Indian ports which are a pale shadow of their past:

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Why does Indian central bank need things like Prompt Corrective Action despite having inspection powers under Banking Regulation Act?

April 21, 2017

Despite many years of rising NPA and bank problems, we just keep moving from one regulation to other. The latest regulation is Prompt Corrective Action which  apparently is not really new. It was started in 2002 and has been modified recently in 2017. As expected, media is buzz with whether this PCA 2.0 will correct banking problems.

What is not understood or questioned how these things have gone so wrong?

RBI is perhaps one of those few central banks which has extensive powers to regulate and monitor our banks. The central bank got these powers under Banking Regulation Act (1949). Section 35 of the Act gives wide inspection powers to the central bank. RBI in its first history volume celebrates passage of this Act which gave central bank powers to put our banks in order. Apart from capital and reserves requirements, the History notes:

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College dropouts who rule the world are rare exceptions – not the rule…

April 21, 2017

An important reminder from Jonathan Wai (Research Scientist, Duke University) and Heiner Rindermann (Professor of Educational and Developmental Psychology, Chemnitz University of Technology).

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