Archive for June 7th, 2017

India’s first PPP railway station Habibganj to come up near Bhopal (is it the first?)

June 7, 2017

Mint has this interesting news :

If all goes according to plan, Habibganj in the suburbs of Bhopal will redefine the concept of a railway station in India. The country’s first railway station to be redeveloped as a public-private partnership (PPP), Habibganj is set to become a swanky commercial hub with shops, offices and hotels, all in a span of three years.

The operation and maintenance responsibilities for the station have been given to Bhopal-based Bansal Group for a period of eight years. It has also received four land parcels on a 45-year lease. The group, which operates in the infrastructure and construction sector, also runs a television channel and educational institutions. It won the bid in 2016.

Bansal Group will invest Rs100 crore to overhaul the station which was opened in 1979, and around Rs350 crore to develop four commercial land parcels adding up to 17,245 sq. m.

“We plan to develop the commercial areas in two phases—two office-cum-shopping complexes in the first phase, and under the second phase, a multi-speciality hospital and a budget- and five-star hotel,” said group managing director Sunil Bansal. 

Though, not sure whether this is first. L&T developed the Harbour line station Seawoods Darawe. There could be some others as well.


Indian Railways has adopted three models for station redevelopment. One is the PPP model, under which a project is planned, statutory clearances obtained and a developer is chosen to upgrade a facility. The second is collaboration with foreign governments to develop stations. The third model is the Swiss Challenge method, where bidders have the freedom to design and develop a project after obtaining approvals on their own. Under this method, the company whose project plan is accepted is given the opportunity to work on the project at the price quoted by the lowest bidder. If it does not accept this, then the project is given to the lowest bidder.


Getting more private players in railway stations is obviously going back to history. Much of India’s iconic railway stations of past were developed by private players..

Reflection on professionalism, Hippocratic oath and the banking industry

June 7, 2017

Mr Muhammad bin Ibrahim, chief of the Central Bank of Malaysia asks bankers to be more trustworthy and ethical in their approach:

When we reflect about professionalism, the medical profession often comes to mind for its dedication, devotion, care and interest for society. Over 2,000 years ago, the Hippocratic Oath was first introduced to the world. Today, most medical school students profess some form of the oath upon graduation.

While written in antiquity, its principles are held sacred by doctors to this day. Its words have evolved with history. But its message remains the same: treat the sick to the best of one’s ability, preserve patient privacy, teach the secrets of medicine to the next generation, and much more.

What is interesting is not the oath itself, but the principles it expounds and the deep philosophical values that have firmly grounded the medical profession over the years. With it has also come an unwavering sense of identity, ethics and purpose for medical practitioners.

The numbers are equally telling. Polls such as Gallup and Ipsos have consistently ranked doctors among the most competent and ethical professionals worldwide. In 2016, 65% of people surveyed believed that medical doctors had either a high or very high level of honesty and ethical standards. The corresponding number for bankers was a mere 24%. A sad reflection of the state of affairs in the banking industry.

We trust doctors with the most intimate details of our health problems, complications and issues. We adhere to their instructions and advice, often assuredly and willingly. Few professions enjoy such stature, respect and trust. This is the epitome of professionalism.

Professionalism matters. Like the medical field, professionalism ought to form the cornerstone of the banking sector. It can be fostered. It should be practiced. And above all, it must be earned. As intermediaries in the economy and guardians of public funds, banking sector cannot hope to perform its role effectively if the respect and trust of the people is not earned.

As we commemorate this graduation today, there’s no better time to ask ourselves what it means to be a professional banker. Drawing from the medical profession and the Hippocratic Oath, let us ponder on the traits to guide our pursuit of developing high calibre and trustworthy bankers, and professionalising the banking industry. Three traits come to mind; Competence, Character and Calling.

From a banker to bankster..what a turnaround for banking industry…most countries are worried about conduct of the profession..

Conspicuous consumption is over. It’s all about intangibles now

June 7, 2017

Interesting piece by Prof. Elizabeth Currid-Halkett of Univ of Southern California.

She says era of Veblen’s conspicuous consumption is almost ever. The rich are signalling their status by doing just the opposite – inconspicuous consumption:

Given that everyone can now buy designer handbags and new cars, the rich have taken to using much more tacit signifiers of their social position. Yes, oligarchs and the superrich still show off their wealth with yachts and Bentleys and gated mansions. But the dramatic changes in elite spending are driven by a well-to-do, educated elite, or what I call the ‘aspirational class’. This new elite cements its status through prizing knowledge and building cultural capital, not to mention the spending habits that go with it – preferring to spend on services, education and human-capital investments over purely material goods. These new status behaviours are what I call ‘inconspicuous consumption’. None of the consumer choices that the term covers are inherently obvious or ostensibly material but they are, without question, exclusionary.


The vast chasm between middle-income and top 1 per cent spending on education in the US is particularly concerning because, unlike material goods, education has become more and more expensive in recent decades. Thus, there is a greater need to devote financial resources to education to be able to afford it at all. According to Consumer Expenditure Survey data from 2003-2013, the price of college tuition increased 80 per cent, while the cost of women’s apparel increased by just 6 per cent over the same period. Middle-class lack of investment in education doesn’t suggest a lack of prioritising as much as it reveals that, for those in the 40th-60th quintiles, education is so cost-prohibitive it’s almost not worth trying to save for.

While much inconspicuous consumption is extremely expensive, it shows itself through less expensive but equally pronounced signalling – from reading The Economist to buying pasture-raised eggs. Inconspicuous consumption in other words, has become a shorthand through which the new elite signal their cultural capital to one another. In lockstep with the invoice for private preschool comes the knowledge that one should pack the lunchbox with quinoa crackers and organic fruit. One might think these culinary practices are a commonplace example of modern-day motherhood, but one only needs to step outside the upper-middle-class bubbles of the coastal cities of the US to observe very different lunch-bag norms, consisting of processed snacks and practically no fruit. Similarly, while time in Los Angeles, San Francisco and New York City might make one think that every American mother breastfeeds her child for a year, national statistics reportthat only 27 per cent of mothers fulfil this American Academy of Pediatrics goal (in Alabama, that figure hovers at 11 per cent).


We see this in India too..

Chandigarh’s Sukhna and Nainital’s Naini lakes are going dry. Here’s why

June 7, 2017

My father told me how Nainital’s Naini lake had almost dried. I was taken aback by the news but not really surprised given out utter ignorance of water systems while growing. Most lakes and rivers which flowed during your childhood have either dried or on the verge of drying. The several bridges which were built to cross these water bodies are just staring at dry beds for most part of the year. Just during rains some might fill only to remain dry for the remaining part of the year.

Now one gets news over Chandigarh’s Sukhna lake also drying up. The reasons for all such crises is mostly one: sapiens incessant greed. Rampant construction, complete ignorance of local conditions, rise of fancier hotels and what not. Sapiens amaze you each time.


RBI’s MPC members refused to meet the Government!

June 7, 2017

There were recently apprehensions over government asking MPC members to meet before monetary policy to discuss interest rate matters.

RBI Governor in today’s policy discussion with media (see the video around 9 min.30 sec to 10 min) said the meeting did not happen. The MPC members refused to meet the Finance Ministry officials. It was an ouch moment!

History of Cesses (additional tax) in India

June 7, 2017

Nice press release at PIB.

The press release is about how the Government has abolished multiple cesses on the way towards GST. In the process, it tells us about the plethora of cesses Indians have been facing all this while. In all, the Government has abolished 6 cesses, on 1 July GST 13 cesses will cease to exist. But still 7 cesses will remain as no GST on them.


RBI MPC’s first dissent…

June 7, 2017

Today’s RBI MPC meeting resolution was on expected lines with one difference. Though, there was a dissent this time:

Five members were in favour of the monetary policy decision, while Dr. Ravindra H. Dholakia was not in favour. The minutes of the MPC’s meeting will be published by June 21, 2017.

Though, the decision is not disclosed. However, based on earlier Prof Dholakia work my guess is he would have argued for a rate cut.

In previous meeting there was almost a dissent as one of the members (Dr. Michael Patra) asked for a rate hike but chose not to dissent!:

sum up, I believe that a pre-emptive 25 basis points increase in the policy rate now will point us better at the target of 4 per cent to which the Committee has committed explicitly. It will also obviate the need for back-loaded policy action later when inflation is unacceptably high and entrenched. On balance, however, I vote for holding the policy rate unchanged in this bi-monthly meeting and await a few more readings of incoming data so that remaining transitory factors have passed and a clearer assessment of domestic and global macroeconomic conditions emerges.

The MPC minutes will be interesting to read..

Denmark to issue a commemorative coin to mark the golden anniversary of its Queen and Prince

June 7, 2017

The commemoration coins keep piling up across the world.

The latest to join the race is Denmark which has issued a coin to mark the 50th anniversary of its prince and queen:

To mark the golden wedding anniversary of Her Majesty Queen Margrethe II and His Royal Highness Prince Henrik on 10 June 2017, Danmarks Nationalbank will issue a commemorative coin.

The coin will be minted as a silver 500-krone coin, a 20-krone circulation coin and a 20-krone coin in a proof version with a very sharply embossed motif.

The commemorative coin features a portrait of the couple, with the Queen and the Prince in three quarter profile, facing each other. Along the rim is a ring with the inscription: H.M. Dronningen og H.K.H. Prinsen (HM the Queen and HRH the Prince). The titles are separated by a heart, the mark of the Royal Danish Mint.

The reverse motif is the joint monogram of the Queen and the Prince. Above it, the date and the years of the wedding and anniversary are shown. Below the monogram is the Mint’s heart, which is also the symbol of love.

Medallist Henrik Wiberg has sculpted the portrait and reproduced the joint monogram.

The coins are legal tender and can be exchanged at Danmarks Nationalbank at face value.  All versions of the commemorative coin will be on sale from 7 June 2017 from Danmarks Nationalbank, from the Royal Danish Mint’s webshop and from certain banks.

Though, as pointed earlier Denmark has outsourced minting business to Finland and is in the process to outsource printing notes as well, So will Finland print this commemorative coin for the Highnesses as well?

When an Australian economist’s piece on monetary transmission is discussed in Parliament..

June 7, 2017

It does not happen too often when Parliamentarians discuss an economist’s piece, even if the hearing is on economic matters.

So it is interesting when Prof. Abbas Valadkhani of Swinburne University of Technology writes this piece in Oct 2016 on how banks delay rate cuts following rate cut by central bank. He shows via research that these delayed rate cuts help these banks make money:


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