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Archive for the category “Economy”

The prevailing “wisdom” on disinvestment is Catch-22

We will disinvest; we will not. We will divest upto 49%; no, we will not.

We will disinvest when the time is ripe. Meaning, when the market is ruled by fools and everyone and his sabjiwala is buying stocks.

Here’s my reading:

1. By saying they will disinvest, only when the market is near its peak, the government has professed to be the ultimate stock market expert. They can actually predict the peak.

2. They have also said that it takes 8-9 months for a single disinvestment to go through; that’s the time it takes the government to do all the due-diligence, window-dress the books,  do a multi-country road-show and so on.

3. 1&2 read together tells you that this government will never disinvest in anything, because they will have to anticipate the theoretical market peak 8-9 months prior to it happening.

4. If any proof was ever needed, it is here that the 1st 5 years of soporific calm that this government displayed, was not due to being periodically hit on the “left” side of the head by blunt instruments wielded by Messr Karat and Yechury. The Congress government of Manmohan Singh, does not need any further help in muddle-headed thinking; they are quite capable of muddling along themselves, thank you.


Where Swaminathan S Aiyar gets hopelessly wrong about Manmohan Singh

History reveres the sharif badmash who gets results – Swaminomics – SA Aiyar – Columnists – Opinion – The Times of India.

Swaminomics is a column I read regularly. I respect the intellectual clarity that Swaminathan S A Aiyar brings to the subject of economics. No nonsense, no bullshit. Yet, unafraid to take a stand and sometimes go against the tide of public wisdom. Witness his predictions about the oil price nosediving when the ruling price was nearly $150 and predictions were for it to go upto $200 a barrel. He also wrote a recent column predicting that Mayawati will be our next PM and while the very thought makes me cringe, you can’t fault his courage in speaking his mind.
The trouble with Swaminomics is that it is morphing from a economics focused column to a column with wider canvas. Some of his pronouncements on political affairs seem more designed to stir controversy than anything else. What is one to make of this very stretched comparison between Lincoln and Manmohan Singh?
I have no quarrel with his basic premise, headlined in the article. However, I have doubts on whether Manmohan Singh will only be remembered for being the architect of the Indo-US nuclear deal and presiding over a “magic economy”. To my mind, he will be as much remembered for the cash for votes scandal, his participation in a government where he was clearly still dependent on his leader for political management and basically wasting 5 years twiddling his thumbs without taking a single bold step towards solving many structural inadequacies in our economy, political system and judicial system.
Our taxation system, our labour laws, the burden on our judicial system, lack of reliable electricity supplies to most homes in our country, our electoral laws, the state of our roads, lack of safe drinking water for the vast majority of our people, an education system that produces conformists … the list is endless. Mr. Singh could have chosen any or many of these areas to focus his and his team’s considerable talents. Instead he chose to fritter away the large fiscal balance he inherited and the “space” afforded by the booming world economy to spend on populist schemes. Mr. Singh has not built infrastructure and he leaves behind mountains of problems for whoever comes to power next.
I think history will judge Manmohan Singh on Vision, Team Building and Execution; the 3 key parameters which will define any leader’s legacy. I have not seen any grand vision from this government. He worked with a team that was working at cross-purposes . Congressmen vied with non-Congressmen in setting disparate agendas and settling scores.  When Arjun Singh was not undermining the authority of the prime minister, he was busy undermining the autonomy of the IITs and IIMs. When Ramadoss was finally rid of his bete-noire Prof Venugopal, he was banning smoking in public places: notice the implementation of this had to be done by the home-ministry and not the health ministry. We had the minister for communication, Raja doling out spectrum for a pittance (valued many times subsequently) and NHAI came to a standstill as the surface transport minister effected 5 changes in 3 years in the NHAI leadership. I can go on and on.
Blaming it on “coalition dharma” does not wash. As I pointed out in a previous post, Vajpayee and Narasimha Rao had both led coalitions with tenuous majorities, but left far more lasting and beneficial legacies.
My question to you all is, will you forget all this and remember the Indo-US nuclear deal?

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