An interesting combination of entrepreneur Rajesh Jain and economist Atanu Dey suggest India should change its constitution. Then only can it improve its economic freedom and grow:
An interesting piece by Muzamil Jaleel of Indian Express. She reports from this place in Bihar called Ratansar.
Here we have a few families which are facing the curse of being a brahmin, an upper caste. They are really poor and cannot do certain tasks because of their caste attitude:
Simon Johnson, the long standing warrior against big banks and fancy finance suggests to reinstate Glass Steagall Act.
The best argument for a modern Glass-Steagall act is the simplest. We should want a lot more loss-absorbing shareholder equity. And, to reinforce this, we should want to make the largest banks simpler and more transparent, with “strong structural firewalls” as Dennis Kelleher, of Better Markets, puts it. Of course, in that context, we should ensure that various activities by “shadow banks” (structures that operate with bank-like features, as Lehman Brothers did) are properly regulated.
Building support for legislation to simplify the biggest banks would greatly strengthen the hand of those regulators who want to require more shareholder equity and better regulation for the shadows. These policies are complements, not substitutes.
Just 20 years back, there was so much noise about removing Glass Steagall Act. And it was of course removed and banks allowed to get into all other activities. Discussions have moved back to square one now..
Linkages are obvious. But we usually do not see a speech where one talks about financial centres.
Thomas J. Jordan chief of Swiss National Bank gives a speech on the topic. Most don’t know but Swiss have had three financial centres – Geneva, Basel and Zurich. Eventually, Geneva emerged as the preferred one.
Earlier, much of our economic thinking and benchmarking was based on Western leaders/policymakers. So, one would quote Reagan, Thatcher and so on and ask Indian leaders to act just like they did. The general advice was that all our economic policy and thinking should be as close to these guys who revamped and reshaped their economies. Now, as the western economies have collapsed and people are questioning the Thatcher/Reagan (and others) ideas, one is looking for some other benchmarks here in India.
The new (relatively new) benchmark is Deng Xioping. This is ironical as it is highly unlikely that Deng would have thought that he would get praise from people on economics matters, that too from India! But I have been reading articles by quite a few where comparisons have shifted from the Western leaders to Deng. The crucial question is Who will be India’s Deng? Is it our current PM? This is even more ironical given the mess China is in now and is paying a price for lopsided development. Yes, it achieved high growth for 30 years but there were costs associated with it. Those costs could be minimised (rather ignored) in China given the autocracy, but can we afford it in India? This is where bulk of the problem is for economists who only use the narrow lens of economics and not of social science as a whole.
Here is one such article:
A sad day indeed. Mr Munjal passed away yesterday leaving behind a history of Indian auto-mobiles which is likely to be unmatched.
The manner in which his family migrated from Pakistan and created this Indian behemoth called Hero Honda Motors (and now Hero), is stuff of legends. He and his team were hardly ever in the news/media trying to create noise/hype over their achievements. Just let the product talk and talk it did. We hardly have people like these in Indian businesses anymore. It has all become too noisy and hunt for instant fame..
A friend Shrikanth pointed to this book by the legend RK Narayan and I was just hooked. A typical plot by RK Narayan based in Malgudi with a financial wizard – Margayya – as the key protagonist. Apart from the usual finance books, one actually learns more abot finance and humility from such books. But hardly anyone recommends this book for a finance course. Though, there are some who recommend works like Reminiscences of stock operator, A fool and his money for a reading in finance.
The Financial Expert isn’t a finance focused book but still leaves the main message – money and its proclaimed masters better be humble. Your mastership is valid only till money lasts and there is no guarantee over the last outcome. Money is as mercurial as the metal.
As we keep ignoring the basics, the mess is just piling across Indian cities. As scholars and media celebrate the rising urbanisation in India, Indian citizens are not one bit amused. It is leading to multiple hazards.
This should have come long ago. One keeps wondering why should an IPO prospectus be so so long? There is close to zero chance any investor (barring the biggies) reads the mammoth prospectus leave alone the retail investors.
As per recent SEBI notice, a company going for an IPO needs to issue a 10 page abridged prospectus as well. It has issued broad guidelines on what to be included in the abridged version:
Vivek Kaul has a piece on Dalonomics. He says the incentives are not right for farmers to grow more pulses. Well, the problem is not limited to pulses alone. Every quarter or so, we have a problem with potatoes or onions or tomatoes and so on. The list just keeps expanding. The problem is incentives are distorted for farming in general. After pulses, there will be something else..
Meanwhile, the prices of dal related items is zooming as well. The eateries across the country are responding in different ways – Dakshin Kannada is cutting size of Vadas, AP village knocks off sambhar from menu, Mumbai eateries are waiting and those in Bangalore have increased the prices.
Most eateries had already increased prices due to rising prices of veggies mentioned above. And now another round due to pulses as well. What is worse is that the prices of veggies and pulses may come lower but menu prices are stickier and remain there.
On top of that in states like Karnataka one pays tax of 20% (14.5% – VAT and 5.5% Service Tax) to eat in restaurants. I mean how priceless it has become to even eat in the country..
Chris Edwards of Cato has a nice post on the topic.
Being from Cato his answer is of course private. There is some research backing the view as well..
In researching an upcoming study on privatization, I came across an interesting illustration of the advantages of private science over government science. Private science focuses on efficiency and results, but government science maybe not so much.
The study by Jonathan Karpoff in the Journal of Political Economy found:
From 1818 to 1909, 35 government and 57 privately-funded expeditions sought to locate and navigate a Northwest Passage, discover the North Pole, and make other significant discoveries in arctic regions. Most major arctic discoveries were made by private expeditions. Most tragedies were publicly funded. By other measures as well, publicly-funded expeditions performed poorly. … Although public expeditions made some significant discoveries, they did so at substantially higher cost (as measured by crew size or vessel tonnage) than private discoveries.
Historical accounts indicate that, compared to private expeditions, public expeditions: (1) employed leaders that were relatively unmotivated and unprepared for arctic exploration; (2) separated the initiation and implementation functions of executive leadership; and (3) adapted slowly to new information about clothing, diet, shelter, modes of arctic travel, organizational structure, and optimal party size. These shortcomings resulted from, and contributed to, poorly aligned incentives among key contributors.
My upcoming study will look at the advantages of privatizing federal activities such postal services, air traffic control, and passenger rail. But policymakers should also explore the advantages of privatizing federal science activities.
Cato adjunct Terence Kealey has written about the advantages of private over government science, and he will discuss that topic at an upcoming Chicago seminar.
Meanwhile, if you plan to explore the Arctic, it would be best to go on a private rather than government ship. There would be less chance of getting scurvy–at least that’s the way it used to be, according to Karpoff.