Sunday, August 31, 2014

P.Chidambaram on Modi

Excerpt from "A View from the Outside" by P.Chidambaram (On Dec 8, 2002).

As a student, Mr.Modi is reported to have taken lead roles in school plays and once wrote and performed a one-man show. In Gujarat, he seems to be re-enacting that stage of his life. If Mr.Modi succeeds he will, with or without the help of Mr.Advani, take his show to the rest of India.

Sunday, August 24, 2014

P.Chidambaram on District Governments

Excerpt from A View from the Outside by P.Chidambaram (Written on Nov 30, 2003)

If we cannot have smaller states, we could have smaller, and viable, units of administration that are charged with the sole responsibility of delivering these public goods. A mandal or a panchayat samiti is too small for these purposes. A district as the unit seems more viable and governable. Today, at the district level, the entire administration is in the hands of bureaucrats. It is time to ponder over an alternative model - fully elected district administrations, responsible for the delivery of selected public goods and answerable to a district-level assembly of elected representatives. The result is that there will be 5,000 units of administration, but the people may also get water, roads and sanitation.

Sunday, August 17, 2014

P.Chidambaram on Black Money

Excerpt from A View from the Outside by P.Chidambaram

In earlier columns I have argued for rejecting the phobia about 'foreign' money. I wish to make another controversial suggestion. Perhaps, for a certain period of time, we should be colour blind to 'black' money if invested in certain sectors. Consider tourism. That is one sector which has almost infinite potential. Every additional tourist who comes to India has the potential to create at least two additional jobs. Can we not agree on a policy that allows for a period of ten years new investment in the tourism sector - hotels, luxury coaches, spas and treatment centres, sports facilities for skiing, sailing, surfing, hiking, mountaineering and golf - and promises that no questions will be asked about the source of funds? Agreed, there is an element of inequity in this proposal and the means are somewhat dishonest, but this is perhaps one of the better examples where the ends would justify the means.

Sunday, August 10, 2014

Complex Solutions for Simple Problems

Von Neumann is a famous Physics Professor. He was a scientist in the first generation of atomic energy. Once in a party, a beautiful lady asked him a difficult question. The following was the question.

Two cyclists are at a distance of 30 Kms from each other. Both are cycling towards other with a speed of 15 kms per hour. After one hour both reach the middle point. When they have started, a fly also started along with the first cyclist at 20 kms per hour, and touched the other cyclist, and returned to the first cyclist and after touching him again went to the second cyclist. It was doing repeatedly till both reach the middle point. How much distance did the fly travel?

This kind of problems are difficult to solve. Since, the distance needs to be traveled by the fly is reducing gradually. This has to be done by using infinite series, and that would take lot of time to solve.

Von Neumann told the answer in half a minute.

There is a trick in this problem. If we think the problem in a different direction, it would be easy to solve. The fly is travelling at a speed of 20 kms per hour. It traveled for one hour (since it took one hour for cyclists to reach the middle point). So, the total distance traveled by the fly is 20 kms.

Then the lady congratulated him and told him that, she thought he would take lot of time in solving the problem by using infinite series, but, he found the trick easily.

Then Von Neumann said, "I solved by using Infinite series only. Is there any simpler method?"

Courtesy: Mohana Makarandam by Mohan Kanda

(By the way, I am also solving problems in the similar way)

Sunday, August 03, 2014

Staying in the Competition With Losses

In 1980, in Andhra Pradesh, the middlemen used to buy fish for very less price from the fishermen. There were no facilities to store or processing the fish. So, the fishermen could not wait till they get better price. So, they did not have any other option other than selling for whatever price was offered by the middlemen.

Since constructing an ice plant would take significant time and money, the Managing Director of fisheries, Mohan Kanda (who later became Chief Secretary of Andhra Pradesh) proposed to start a small shop to buy the fish from the fishermen for a reasonable price. They have done all the calculations and started the shop and announced a fair price for the fish. Then the middlemen did not make any calculations. They simply offered Re.1 more than the government price per kg fish. Obviously that was a better offer for the fishermen, and they started selling to the middlemen (but, now with higher price). Nobody sold to the government shop, and the shop was idle and it was incurring the cost of running the shop.

The original problem was, giving better price to the fishermen. That problem was solved.

After few months, finance ministry verified all the accounts and checked that, this shop was not getting any profits. It was not doing any sales and not buying anything from fishermen. So, they ordered to close the shop, since there were no profits.

As a result finance ministry saved few thousands of rupees on that shop. The middlemen reduced the prices, since there was no competition. The fishermen's income reduced. Nobody bothered that, running this shop is the least expensive way to improve the life of the fishermen, and welfare schemes are most expensive.

Courtesy: Mohana Makarandam by Mohan Kanda