In Defence of Vijay Mallya

The Fundamental Economics of demand and price is being defied by Indian Firms.

Increase in Price reduces the demand of a product. As the price of money, in this case, Interest rates have gone up in India, the corporate indebtedness has significantly increased. So have the levels of bad debts in this country.

In almost all major economies of the world, interest rates are at an extremely low level. In the United Kingdom, interest rates have been at rock bottom for a decade. In Switzerland, they are close to zero. We have the recent case of Japan Where negative interest rates now exist.

For the 12 large corporate groups that account for 15% of all India’s debts, interest rates may be a theoretical construct that does not matter. For the hundreds of thousands of small businesses that borrow money, for the millions of small and marginal farmers, for the millions of consumers who need to borrow money to purchase housing, transport equipment and consumer durables, the Level of high interest rates has meant that the quality of life has been compromised for a generation or more.

Indian businesses, across the board, are financed by banks that are, in turn, financed by taxes, given that India’s banks are primarily state owned. Hence, for all practical purposes, India’s private corporate sector businesses are disguised public sector enterprises.

Undoubtedly, there is collusion, between, the lenders, borrowers, regulators and the political masters. One does not need to be a rocket scientist to figure out the rest of the story.

 So, how did the flamboyant kingfisher Vijay Mallya screw up?

Exactly the reason, in a jungle one needs to camouflage for survival, not be seen out of the crowd, and be vulnerable. The Indian banking sector is going down the drain and they needed a scapegoat to slaughter and be seen doing the right thing.

SBI is bigger than RBI in influence, also, too deep entrenched serving many masters over the years. There are no morals, no rules and no justice either at the top or at the bottom of the pyramid. It’s just about survival every day.

During the global financial meltdown of the last decade, governments were bailing out large corporate all over; the winds were conducive for such a dole in India too.

Mallya, a flamboyant Rajya Sabha member, having actually bought over, Hegde’s JD(S), was pushed on the front by the cunning lot of side watchers. Taxes on aviation fuel were high, making domestic airlines, bleed in their balance sheets.

Closing down the airlines, though, would have been a smarter move then, would have put the government and the rest of the economy on a negative mode.

So, the idea of a bailout was floated.

India is a socialist country, congress, realized they could not be seen helping the rich, especially, the known Mallya, so they offered him, more borrowings through, the SBI.  Other banks followed the big brother.

 Mallya had known then, where it all was heading, and eventually he headed to where he had to.

Nothing happened overnight.

The Ambani’s, Adani’s are too smart and stay camouflaged.

I have some personal experience about banking and indebtedness. Thus feel bad about Mallya.

In 2002, I borrowed Rs. 5 lakhs from SBI, by mortgaging property worth Rs. 10 lakhs, for an Agro Business. In 10 years my debt went up to Rs. 65 Lakhs, my property in mortgage value increased to Rs. 150 lakhs. Obviously, I must have paid the installments and interests for 10 years to get such an exposure.

We were a loss making company from day one.  The Agro Sector in a god forsaken, non industrious rural set up would take up more than a decade to make sense. The increase and renewal of my loan was only serving the interests and installments. Keeping me away from being an NPA or a Non Performing Asset.  Soon, I reached a state of default.

I wanted a restructuring, which was denied and subsequently, the draconian SARFESI was imposed, my property auctioned for mere Rs. 27 lakhs.

I had to pay Rs. 96 lakhs besides that as per the DRT order. And I am still a litigant, fighting for my property and trying to start afresh.

And I can’t get a loan anymore.

That’s SME banking in India and I am not the only one.

Maybe not a mansion, I am sure that Rs. 96 lakhs and some more would have got me a shack, in the same Southampton neighborhood as Mr. Mallya.

Breakfast with Reetika

Breakfast we are told is the most important meal of the day.

Having breakfast, with a soul of a clear mind, no minced words, a spiritual guru, a reki preacher, a la French teacher and a practicing Zen at the art of fast car driving, is just bliss.

For me it was providence.

Breakfast with Reetika, could not be planned, coincidence or just an opportunity.

Life and events of life happen is such a way, that it makes sense, usually late in life but sometimes instantly.

Maybe, the good people are wonderful thoughts and words are always around.  It’s just that one needs to be ready to see, hear and understand them. Same words get thru to you, on different levels at different times.

I am always in turmoil.

At times more,

My 16 year old daughter is 16 and Daughter.

It’s rhetorical, but I have never been a father to a 16 year old daughter before.

Reetika has been there, done that and composed her thoughts well.

Thus, the well received sermons.

Reetika is Pushpendra’s better half, and Puspendra is an old friend from School days, who doesn’t remember me at school. 

They run a hotel at Jaipur, Jaipur Inn. An extremely well intended, simple, affordable but graceful accommodation, for budget tourists.  To, me it reminds me of my old Hostel at Brij Nikunj, the upholstery, the toilets, the beds, people and the place. I just love being here.

At least four times a year, we drop in and park ourselves and stay for days, without missing home.

She must have realized the state of my mind. The couple called me over for breakfast, one day and then rest of the days, I am around.

I talk, usually, no wisdom, but just my mind, nothing to read between lines. I have more than many words where a comma could do.

Reetika is unwilling to listen to my garble and doesn’t mince to point that, I don’t need to talk so much.

I am propagating negative energy when I elaborately dissect my problems of now and past, trying to link things, justify actions.

Stop making other peoples life your purpose.

I am a pervert and decomposed mind.

Hah..!! Huh..!

No need, one just needs to focus on the positive things.

Joy, everything, everyday should be effort towards this one goal.

Anything else is just an excuse.

Yep! I kind of agree now…! Me including, we think we are what we are for the choices and circumstances of the past.  It is true! So what!

Life moves on, without you having a say in it, so might as well find a purpose, which makes you happy and go seeking it.

Reetika usually has a single word for your long stories. What’s amazing is that single syllable is so appropriate, it just registers and lights up your bulb.

I always look up to my Breakfast, with these conversations, the energy intake just doubles.

We have Pushpendra’s for proof, he walks up to Nahargarh fort every now and then.

Thank you Reetika!

Na Dava Na Daru - A Case against Prohibition

“Baykhari” or “Bhuskhar” is the Bihari word for Silo’s or Granary.

 It’s like a thatched conical mud house, lined with dry hay and grains stored within.

 Besides the utility of storage of grains free from pests and humidity, it’s a symbol of security, prosperity and pride. Still, in Villages, we count the number of “Baykhari” one has before giving our daughters in their family.  

My Late father used to tell me, that during the late sixties the Congress government came with a rule that, all farmers have to sell their grains to the government and government only. One was allowed to keep only a few sacks of grains in their house, just for consumption. 

The police along with the concerned department used to raid farmer’s premises, take all the grains stored and destroy the “Baykhari”. Thereby destroying ages old, a functioning system of agro storage and agrarian balance.  Destroying also their prosperity, ages old symbol of pride and chances of a good bride for their sons.

Please find a relevant article here: http://ccs.in/parking-space-poor-restrictions-imposed-marketing-movement-agricultural-goods-india

Of course, it didn’t last long, as farmers stopped growing; there was scarcity of food and famine followed. It was overzealous socialism and governments perceived morality of spoon feeding the poor nation called India.

In a similar move, the State of Bihar, through its elected members of legislative assembly, unopposed.  One fine morning decided that the Bar in my house, a symbol of prosperity and pride, is an illegal Silo and the contents of it, acquired with so much of effort, through various travels, is dangerous for the poor people of this state, also immoral.

Not much has changed since then it seems.  As the Nitish Kumar Government in Bihar, imposes complete ban on alcohol, not a single individual or group or civil society opposed it or even showed some signs of resistance.

On the other hand, Nitish Kumar has formed a Mahila Brigade to showcase his high ground on morality. Who beat drums, play with colors and burst crackers in favor of prohibition. 

It’s a staged performance, paid by the tax payers’ money, as these groups run state sponsored NGO’s, some of them housed in govt. buildings.

Undoubtedly, inebriated men had become a social nuisance in Bihar, especially in villages during last 10 years.  

Shri Kumar was the CM for these years. The booze shops increased from mere couple of hundreds to over 6000. Shops were allowed to have a drinking area too, even allowed to operate in residential and educational area.  Mr. Kumar’s logic was the govt. needs the revenue. The revenue shot up from 150 crores to 4000 crores.

Then, like the Great Samrat Asoka, Nitish had a change of heart and like Asoka, from the great warrior and war monger  became the most powerful preacher of Buddhism and peace. 

Nitish wishes to become the preacher of prohibition. 

Like Asoka, learnt that wars never get over and are expensive way to remain a renowned king, piggy backing on Buddha would make him immortal.

Nitish would make this a national issue and walk his way to the immortal chair of the Indian Prime Minister. 

Asoka did succeed to a large extent, time shall tell about Shri Kumar.

But, Sir Ji, Wars didn’t stop after Asoka and neither will the flow of alcohol, after you try to piggy back Gandhi.

Yesterday, one of my co-villagers was arrested from his house, consuming his daily dose of whiskey.  Arrested under section 47(a) of Excise laws.  We were told someone complained, thus his house was raided.  To know later, Panchayat elections are due and people are settling scores. That’s how law takes its selective turn.

The punishment is 5 to 10 years of prison for possessing, consuming or manufacturing of alcohol and in some cases death sentence too. Now that’s what we call a resolve.  

The state goes to sleep at 9 pm now. Clubs and hotels have halved their staff.  People packing for Delhi and other places.   Marriages, parties, seminars are being postponed, cancelled or moved away to other destinations.

I am sure all these people were drunkards and a bane to the Bihari society, better in other places than here.   Laloo during his arrogant days, made sure that the trader community got out of this state, leaving behind caste ridden backward and prejudiced society, a fit place to run by a nincompoop. Still, he knew his basics well; he liberated toddy and the Pasi community from the socialist congress and removed the licensing on the age old profession.

The other day, I happened to travel with my journalist friend for a story on the effect of the ban on the lives of the Pasi community.  We went to the houses of those tree climbers, their women were in tears, there was no food for last few days, as these people earn on a daily basis. Even a single day without work has direct effect on their stomach.  Police has been harassing them and breaking their utensils. Even their political leaders have abandoned their cause as they are a part of the govt. and the unanimous passing of the legislation.

Initially, the ban was supposed to be in two phases, first was ban on so called country liquor, which is nothing but flavored alcohol made out of simple distilled molasses spirit.

Later, it might have been extended to so called IMFL, whatever, that means its branded booze. Also, now, the state beverage corporation would sell them from their own 650 shops across state.

The aggrieved manufacturers and shop owners had gone to court, seeking injustice, main argument being, if booze is bad, even IMFL is booze, why should country liquor be singled out. 

Does it mean, rich have the right to drink and poor don’t? 

On the 5^th of April, the case was up for hearing, a day before that, some 50 state run shops that were to open weren’t allowed by the vigilant citizens, as they were being opened in residential areas. The mood was set for anti booze. Mr. Kumar realized his weak wicket, before the court went to hearing they decided to implement full ban. 

Putting the parties on back foot. Now, they would have to go to the drawing board again.  He cited that, there was immense support from the masses for prohibition.

Thick skin Politicians have a knack for making hay in adverse situations.

   

The Bihar Booze industry which was almost an 80K crores business, suddenly had no takers. As if no one knew who was drinking all that stuff.

There are mainly two reasons why everyone kept quiet. Primarily, the issue of morality, perceived misplaced hypocrite morality. 

Not to call a spade a spade is a civil society norm.

Second, no one wants to be seen on the wrong side of the law. 

When Nitish was on a liquor shop opening spree in 2006, the aggrieved, especially the women of the house, kept quiet and let it happen. The law was supporting the drinking business.  

Now, he is closing all shops and putting drinkers behind bars, the law supports thus better to keep quiet.

For a society to flourish, dissent is the most important ingredient.  What we have since ages instead, is hope filled yes Sayers, some have vested interest and some are just too lazy to dissent. 

They are hopeful that good things will eventually come forth.  

Oh! They will, but with your dissent.

What shall eventually happen is, bootlegging and mafia and deep rooted nexus and very powerful certain group of people and some real hooch tragedy death and death of a society. 

Good men sipping their adulterated scotches in steel glasses in quiet corners of their homes, reliant on goons for their supply and the goons shall sit on the sprawling lawns of MLA quarters and gulpthe real thing.

As for me, its Dava Daru.

A co - villager told me a certain remarkable thing.  “It’s called DAVA - DARU” meaning Medicine and liquor go together.  One has to have Daru like a Dava, Alcohol like medicine, in the right dose, not less not more for good health.