Friday, August 30, 2013

Agriculture Policies Vs Marriage Laws

At the time of Independence, the tenants of agriculture land used to suffer because of the unfair practices of the landlords. For that purpose, government introduced laws which gives unfair advantage to the tenants.

In few decades, farming became the profession which gets the least income.

Since, many husbands are torturing their wives, government introduced laws like 498A (By which any husband can very easily be harassed by his wife), share of the husband's wealth to wife, and considering wife's opinion alone in case of divorce etc.

I will not be surprised, if there is no institution of marriage in few decades.

Sunday, August 25, 2013

Growth in Infosys - 1991 Reforms

The following is an excerpt from the book, "A Better India: A Better World" by N.R.Narayana Murthy.

Between 1982 and 1992, Infosys revenues grew from a paltry $130,000 to $1.5 million, a factor of just 12 on a small base over a period of ten years. However, after the reforms, our revenues have grown from $1.5 million in 1992 to a likely figure of $4.1 billion in 2008, which is a factor of 2,700 over a period of sixteen years! Today, we are listed on NASDAQ. We operate in seventy countries and have over 88,000 employees comprising over ninety nationalities. We have created over 2,000 dollar millionaires and about 20,000 rupee millionaires through our employee stock option plans. We have beaten every MNC in India to be voted the best employer, the best managed company, the best in corporate governance, and the best in investor focus.

We pride ourselves as a shining example of all the good things that came out of the economic reforms of 1991.

Wednesday, August 21, 2013

Rajya Sabha MP - How is it Useful?

Excerpt from

Once a reporter tried to convince me that Rajya Sabha seats were up for sale.

I didn't believe him one bit. He eerily quoted the very same Rs 100-crore figure (that's being bandied in the media recently) at that time itself.

The conversation went something like this...

"Who would want to buy an RS seat?"

"An industrialist, of course!"

"What will he gain?"

"A diplomatic passport for one."

"How is that helpful?"

"Well, that's great for travelling all over the world for doing international business seamlessly. It's a great boon. You wouldn't understand."

"That's all?"

"Well there's also the fact that you get to sit in the Rajya Sabha. Do you know that if a businessman tried to meet a Minister, he might never ever get an appointment? Here he meets all the Ministers every day. It's like an exclusive membership to the most powerful political club in India!"

He now seems to have a point. Today, even the Prime Minister is a member of the Rajya Sabha.

Imagine sitting and chatting with all the top politicians of the country on a regular basis. Now that would be really handy for business!

I'm still foxed about the Rs 100 crore figure, though. Has there been no inflation in over a decade? Or was it 40-50 crore at that time and he was exaggerating?

Friday, August 16, 2013

Social Service Vs Expecting Returns

Many people and media thinks, somebody is helpful, only if that person is going to lose something while doing the help. If that person gains even insignificant things while doing the help, then many consider them as just business people, and most of the media criticizes them as the one who sucks the blood of poor people for their profits.

Many people do not bother about "Win-Win" concept. Media sees, "Win-Lose" as the only social service. People miss the point that, if somebody is always losing while doing help, then they cannot do anymore help after a certain extent, because, they would lose everything that they have.

Many times, Media criticizes even the explicit "Win-Win" business proposals, because, the proposer is getting huge percentage of profit, whereas the other party is getting negligible. If we are worried more about what others getting, and not what we are getting, then we will never develop.

If we are worried about a politician (with good intent) is trying to retain his post by illegal methods, and if we bring down the good politician and give power to another inefficient or bad politician, our life would go down only.

If anyone is taking help from others, they must make sure that, others are not losing anything while doing the help. Then only, they can get help in long term.
If anyone wants to help others, they must make sure that, they do not lose anything while doing the help. Then only, they can help in long term.

There are only two types of social services. Politics and Business. Everything else is some variant of begging.

Thursday, August 15, 2013

Social Service Vs Business

N.R.Narayana Murthy wanted to earn more money, and that's why he started Infosys. He never started it to develop the country or to uplift the middle class people.

Amir Khan have done programs like, "Satyameva Jayathe", to earn money in the name of the social service. He got paid in crores for those programs.

Britishers have constructed railway network and many other projects in India for their business purposes, and never to develop India.

P.V.Narasimha Rao bought MPs to retain his PM post, and never to serve India.

Sunday, August 11, 2013

Parent State's Approval While Forming New State

Till 1955, in Article 3, it is mentioned that, when there is a state separation, the state's consent should be taken. It was changed during state reorganization that, union government does not need to take state's consent. The reason is, there were 550 princely states, and everything was going to be changed in building new India, and it is difficult to take state's consent for each and every small change. Near the border of any two states, if both the states claim it as part of their state, it becomes difficult to get the consent of that states. For that reason, they have amended the constitution so that, union government can reorganize the states without their consent. But, not to split the states like they want.

There was a discussion in Sarkaria Commission on whether it is must to take the consent of the parent state before separation or not. They mentioned that, union government should take the opinion of the state in separation. They also mentioned that, since, no state was formed without taking the consent of the parent state, they left it assuming this question won't arise. That is the spirit of the constitution. In one case, they may do it. But, that becomes precedent for the country. Tomorrow, if Delhi government does not like Karnataka, they would split into two. If they don't like Narendra Modi, they would split it into three. Is this the way for India to move forward?

The above is taken from the speech of Dr.Jayaprakash Narayan

Can I assume, if Telangana bill does not pass in AP Assembly, he would be against introducing the same in Parliament?

Friday, August 09, 2013

1991 Economic Reforms - Excerpt from A Better India Better World by N.R.Narayana Murthy

Everything is changed in a jiffy when the reformers led by Narasimha Rao waved their magic wands. Just in a matter of weeks we were in a new orbit unconstrained by the major debilitating forces. The government removed licensing in most sectors of the economy. Since 1991, I have not gone to Delhi to obtain a single licence from the government. The reforms provided full current account convertibility. In fact, today there is absolutely no restriction on any current account transaction. Even in the area of capital account convertibility, we hardly have any restrictions for corporations. Indian companies have been acquiring companies abroad like never before in the economic history of India.

The government, realizing the futility of mandating IPO prices, abolished the office of the CCI and allowed Indian companies to set the IPO price in consultation with their investment bankers. This has resulted in market-oriented pricing policies and has generated a lot of enthusiasm among entrepreneurs.

These major reforms have influenced Indian businesses in many ways. First, the reforms enabled our business leaders to spend their time in focusing on the market, innovation and employees rather than spending their time lobbying in the corridors of Delhi. Second, they removed uncertainty in business decisions forced by bureaucratic delays and whims. In other words, post reforms, businesses are much more in control of their own destiny than before. There is no climate of helplessness in the board rooms. The market is the primary determinant of the success of companies. Third, the reforms reduced the tyranny of rent-seeking and corruption to a large extent. Fourth, these policy changes made it easy for the entry of world-class multi-national companies (MNCs) into India.

Courtesy: A Better India: A Better World by N.R.Narayana Murthy

Tuesday, August 06, 2013

Before 1991 - Pricing of IPO

The following is an excerpt from the book, "A Better India: A Better World" by N.R.Narayana Murthy.

In India, prior to 1991, there was a government officer in Delhi called the Controller of Capital Issues (CCI) who decided on the IPO price for Indian companies going public. This officer had very little idea of capital markets since he/she sat in Delhi while the capital markets were in Bombay, and he/she rarely travelled to Bombay or bothered to understand the dynamics of these markets. He/she would look at just the past performance of a company and allow a very low premium, if any, for the IPO pricing. Such a policy of government-determined IPO pricing was a disincentive for entrepreneurs who had to give up a large part of their equity to raise a small sums in the capital market. After all, capital markets are all about future potential rather than just about past performance.

Saturday, August 03, 2013

Why Cannot Seemandhra Develop its Own Capital?

Most of the politicians are destroying India. But, once in a while, we get very good politician who fixes everything so that, even after he leaves the office, still for many years, the state/country will be in a better state. After a good person leaves the office, many people would try to get their share of the profit from the development done, and fight for that. Nobody bothers about continuing the same development.

The fight with Hyderabad is also very same. Many people say that, Most of the development is done by the private people and not by the government. There is no evidence that, Seemandhra people developed Hyderabad. So, Seemandhra cannot claim on the ownership of Hyderabad. And also, Seemandhra is going to get more money. So, it can be developed much better etc.

But, all these are never the root causes. The root cause is always, the bad policies of the government and not any other reason.

There are many arguments around whether Telangana people developed Hyderabad or Seemandhra people or people outside the state. "Who developed it" is never a question. Since, it is a capital, it has to be developed. In general, most of the development comes from the private organizations and private people. Again, it does not matter, from which area they have come. The other argument is, since, the development is coming from private people, a new capital can be developed with private organizations/people, and infrastructure can developed with the money that the new state gets. So, Seemandhra does not need Hyderabad.

The private investment can come only, if the government is good and it encourages the development. But, unfortunately, in India, we get one leader in one generation, who develops the state/country, and rest of the time, we just survive with what that good leader had done for the state/country.

If anyone wants to start a small school for 6th class students, the no.of approvals that they need to get from the government is huge. For very small things also, there are lot of dependencies with the government. If the head of the state aims to develop the state, everything would move fast. Otherwise, everything would stall. If the state is formed, and the CM is not for the development, then the situation would be worse, and the state will not have anything other than what they already had.

Not only the state government, but, also the union government should support for the development of the state. If Seemandhra wants to modernize Vijayawada airport or to make it international airport, union government must give full support. If Kurnool becomes capital, then, it must have good train connectivity (I am not asking for airport). Railway department has very bad history in this (since independence).

If the state government or union government is not for the development of the state, but for their pockets, then the state would be doomed, because of lack of infrastructure and developed city. Since, most probably, the next CM is not going to develop Seemandhra, the people of Seemandhra do not want to lose Hyderabad.

If we have good governance and free market economic policies, all these problems will not even exist. Since, we don't have them, Seemandhra is fighting for Hyderabad.

People can say that, if they elect a good leader, it would solve all the problems. But, if Seemandhra people ask the same question, there will not be any need to separate the state in the first place.