Vishal Sikka’s Resignation

A learned individual has remarked that the Vishal Sikka story is like an Indian arranged marriage ending in divorce. Having read the resignation letter as available online I too felt it like a divorce notice in which the wife puts the blame on the mother in law.

Jokes apart, corporate governance must be a serious issue and I feel that the Indian corporate sector has not matured enough over time. The Cyrus Mistry episode was a clear case of power struggle and we know by now who calls the shots in the Tata Group. Given the shareholding pattern in Infosys I find the picture a bit hazy. If promoters (Narayana Murthy and others) hold less than 13% of shares, how can they force the Managing Director’s exit  that too when he enjoys the confidence of the board.

The cited reasons for the resignation are “false, baseless, malicious and increasingly personal attacks”. But the question is by whom. The letter does not name anybody but it is too obvious.

The unfortunate part is everybody accepts that “performance” is a subjective issue. Infosys founders and board members are all eminent persons of extra ordinary caliber but they are unable to converge at a point which defines good performance.

Bitter corporate exits highlight vague subjectivity where the more powerful is the winner and things like performance and corporate governance take a backseat.

Narayana Murthy symbolizes dreams and achievements of Indian middle class. We can only hope that as the events unfold in Infosys in next few days his image remains undented.

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Two Hundred Years Ago

The year 1817 was a crucial year in Assam history. In that year Burmese troops entered Assam for the first time. Burmese invasion was the beginning of the end for the Ahom kingdom which ruled Assam for nearly six hundred years.

Despite facing setbacks in America the British founded a strong base in most of part of the Indian sub continent by 1817 and the might of British East India Company was almost unchallenged in this part of the world.

The modern democratic United States of America was already founded based on a written constitution. James Monroe, one of the founding fathers of the United States became president of the country in the year 1817. A part of his tenure as president is recalled as an “era of good feelings” in the U.S.

Let’s look back to Assam in the year 1817. The Assam king Chandrakanta Singha was 18 years old and mostly spent his time playing with friends in the royal palace at Jorhat, the capital of Assam then. The de facto ruler was Purnananda Burhagohain, the experienced prime minister. Purnananda Burhagohain was an able administrator and he was able to suppress internal rebellions with his standing army. The standing army was trained and armed by the British East India Company.

The extent of internal conflict during Purnananda Burhagohain’s tenure was astonishingly high. Apart from various Moamoriya factions, there were troubles created by the Dundiya revolt, incursions by Khamtis, Morans, Singphous and Kacharis. The reasons for the revolts are not well documented, but in all likelihood the leadership failed to inspire a large section of the population.

Though Purnananda Burhgohain succeeded in defeating anti royal elements, he lacked a pragmatic approach of statecraft. There was no new approach of reconciliation and reaching out to dissenting voices.

So when the Burmese troops entered Assam, they did not face resistance from a united Assam and it was a virtual walkover for them.

Bangladeshi Influx in Assam and the Surgeon from Bangladesh

A pamphlet is pasted on the wall of a grocery shop in an interior village in Barpeta district, Assam. In one corner of the pamphlet there is a photograph of a young man having Islamic style beard and cap.

The pamphlet is written in Assamese mixed with Arabic words. My translation of the pamphlet in English would be something like this:

“Dear/Respected all….. I “so &so” ,  a surgeon (some word in Arabic which in my understanding of the content of the pamphlet is surgeon) from Bangladesh and I am an expert in carrying out circumcision in true Islamic style. All devout Muslims having male children may contact me at………”

The interior village I am referring to is a village inhabited by people of Bangladesh origin. I do not know whether these villagers reached Assam before or after 24 th March 1971, the cutoff date of entry into Assam as per the Assam Accord. I can only hope that the “surgeon” is in Assam with a valid visa, at a time when the governments at the centre and state are strictly against Muslim influx from Bangladesh.

Though I was a minor, the volatility and emotion linked to Assam Agitation (1979-1985) is still fresh in my mind. In next thirty years we have only felt betrayal. Forget deportation, even detection of foreign nationals based on existing laws and documentation proves to be an almost impossible task.

The history of movement of people from areas of present day Bangladesh to Assam is not less than hundred years old. It is alleged that in the beginning local people supported   such influx. Well known Assamese intellectual  Gunabhiram Baruah reportedly supported immigration in 1885-86 ( one hundred thirty two years ago). Sir Syed Muhammad Saadulla, an indigenous Muslim was the premier of British Assam between 1937 and 1946 on three occasions. Though Sir Sadullah was reportedly an able administrator, an eloquent speaker, moderate and liberal in his approach but supported Jinnah’s two nation theory and wanted Assam’s inclusion in Pakistan. He reportedly encouraged immigration for development of “low lying areas of Brahmaputra Valley”. It is believed that even a great leader like Jawaharlal Nehru supported immigration “from the point of view developing Assam and making it a wealthier province”.

As Assam Accord failed to deliver results , there is another serious issue overlooked in the accord deserving attention  is the higher population growth rate of the immigrant community. Statistics indicate that even in recent years the population growth rate of Muslims continues to be high in Assam and I find it difficult to attribute to influx alone.  Since Assam Agitation days,the  government has at least acknowledged the seriousness of the problem and there are attempts to seal Indo-Bangla borders in Assam ( which is still incomplete for reasons not clear to us). Let’s us also remember that since signing of the Assam Accord, Assam agitation leaders ruled Assam for ten years. Also there was a period of NDA rule led by the BJP which is strongly against Muslim immigration from Bangladesh. If even after that the influx continues, I don’t know who is to be blamed.

Now let’s have a relook at the possible reasons why the mass migration happened from the places of today’s Bangladesh. There used to be abundance of cultivable land in Brahmaputra valley in Assam. Perhaps the basic idea was more jute cultivation because Jute Industry was flourshing  at some point in time.

But in today’s perspective, land in Brahmaputra Valley is under constant threat of flood and erosion. Industrially Assam is a backward state and even agriculturally the state is not self sufficient. Per capita income of the state is far below national average. And the jute industry is in decline all over India.

 

There are many who are fighting for the cause of Bangladesh origin Muslim immigrants. I think they should also consider the following points seriously.

This community of Bangladesh origin Muslim immigrants in Assam lives in sub human conditions, specially those who are in river islands or in riverine places. They struggle for their existence under constant threat of flood and erosion.  So is it not necessary to relocate them to safer locations (while doing so let’s remember that population density of Assam is higher than developing states such as Gujarat, Karnataka and Maharashtra)?

Due to disproportionate increase in family sizes the community remains impoverished despite their hard working nature. Anybody thinking for welfare of the community must also think about modernizing the community by dragging them out of age old backward mindset and superstitions. Controlling population growth must be on top of the agenda for progress of the community.

Another point– many in the pro Bangladesh origin immigrant camp get hurt when we say that the economic condition of Bangladesh leads to influx into Assam. Their point is Bangladesh’s economic growth rate is higher than India. If that is the case then they should take the initiative for a reverse migration which will lead to better life of the community.

Flash Flood in Guwahati & Solution

Noted academician and scientist Dr. Amarjyoti Chaudhury wrote an Assamese novel “Gosor Nisina Sakokhan”. The title of the novel is inspired by Khasi folktale “ Jingkieng Ksiar”. According to the Khasi  legend there used to be a ladder connecting the earth and the heaven and men on earth could move up the ladder and reach heaven. Till such time human race remained righteous the ladder existed.

Dr. Chaudhury is of the view that the ladder symbolizes a tree and folktale is about ecology and about a just society’s commitment to the environment.

The novel “Gosor Nisina Sakokhan” talks about how Guwahati  a hub of natural beauty with its green hills, rivulets and water bodies is changed into a city of congested roads, damaged ecosystems and most importantly the old  rivers getting blocked or carrying the city sewage. The central character of the novel Stuti is an idealist lady but her bureaucrat husband is convicted on charges of granting illegal permission to contractors violating environmental norms.

In reality I am not aware if there are laws to safeguard the ecological balance of Guwahati city.

For at least three decades the city has witnessed flash floods. The intensity of floods has started taking human lives now.

Like elsewhere in the state preparedness to face the challenge seems to be inadequate in Guwahati too. The problem is probably not due to lack of ideas, technology or money. I was going through a scholarly article on tackling the flash flood problem in Guwahati.  I would like to reproduce some words, phrases and institutions that appeared in the article:

Watershed Management

Building Bye Laws

Maps by Assam Remote Sensing Application Centre

Creation of Silt Traps

Sedimentation Control Standard

Hydro Seeding

Dry Seeding

Chemical Soil Stabilization

Vegetative Buffer Strip

Rainwater Harvesting

Master Drainage Plan

City Master Plan

Storm Water Study

Guwahati Smart City Development Agency Ltd

Restoration of Beels

Riverfront Rejuvenation

Hill Rejuvenation

Centralized Command and Control Structure

 

It appears that there are serious thoughts about the issue but not much is done on ground. Can we hope that such ideas and action plans will be implemented soon and in 2018 monsoon Guwahati will not face the flash flood havoc?

Indian Railways: Achievements & Initiatives

I was flattered to receive an email from Railway Minister Suresh Prabhu. But the euphoria ended when I learnt that it is a bulk mail sent to all registered email ids with IRCTC. But I must say that Indian Railways have offered something tangible in the three years of NDA government.

The latest milestones are the new train connecting Guwahati and Indore,  and a solar powered train from Delhi to Farukh Nagar in Haryana.

The government must be credited for improving train services in the north bank of Brahmaputra in Assam.

As a regular traveler I felt some experiences are worth sharing. The railway minister writes

            “Highest ever 2855 kms of new lines, gauge conversion and doubling commissioned

             &

            Mission Raftar to enhance both average and highest speed of trains

Now a journey to Naharlagun  from Guwahati  is enjoyable. The train is mostly on time. This is because the north bank train line is yet to face any major traffic congestion. Though there are more trains between Guwahati and Bongaigaon  the time factor continues to be uncertain and it will continue to be so till double tracking of railway line is completed. But has the double tracking work started ?

The introduction of Shatabdi  Express  between Guwahati and Dibrugarh/Naharlagun  is another good move.  But this Shatabdi takes over nine hours to cover four hundred  fifty kilometers while NJP-Kolkata Shatabdi express  takes one hour less to cover  a distance of  five hundred fifty kilometers.

The Jan Shatabdi express continues to be as important as it was for travelling between Guwahati/Dimapur  and Jorhat. Fifteen years ago the passenger occupancy in the train was limited. But in recent times the train resembles a passenger express halfway through the journey.  There are more trains now but still not enough to meet growing passenger movement.

Though the Railway Minister has taken up the challenge of bringing all North East State capitals in the railway map by 2020, but I am ready to give him more time. I will be happier to experience reliability and quality services in trains connecting Guwahati and Silchar.

A major challenge is maintaining cleanliness of stations and coaches considering the gigantic population and improper habits of people. But again cleanliness is now a national agenda. While boarding a train I tried to figure out if there is a change as compared to the years gone by. I was about to draw a positive conclusion but suddenly an exuberant rat appeared from under the seats and then disappeared.

I felt that indeed it’s a long way to go.

Good & Simple Tax

Here is an excerpt from an article on VAT ,  published twelve years ago- “Value Added Tax—one of the most radical reforms to be proposed for the Indian economy, could finally become a reality after four years of political and economic debate.

Yet, the biggest hurdle before the government is not making India ‘a common market’ through a uniform sales tax structure, but removing a complicated tax structure that also allowed for fraudulent practices”

But how did said tax reform VAT implemented with effect from 1st April 2005 affected us? Now after twelve years while rolling out  GST, are we not saying the same things again?

VAT could not wipe out fraudulent practices or more specifically tax evasion by traders.

Even the surgical strike on corruption “demonetization” was successfully outsmarted by the trading class.

When we say GST will lead to simplicity and one nation one tax, do we tell the truth?  GST has its components like CGST, IGST, UTGST and IGST. The rates will vary from 5% to 28% and again there are exempted goods and services and the list is still not exhaustive.

Also there can be provision of cess over the peak 28% on “luxury and sin” goods.

Identifiable loopholes are the threshold limits on exemption and the intelligent ones perhaps already worked out their accounting statements.

The input tax credit part does not seem to be so simple with the invoice matching condition.

Also I have a doubt regarding the PM’s comment “ long wait by vehicles at toll plazas will end”. If  the plaza collected Octroi then it is yes. But “toll” is not a tax but a fee and I think it can’t be subsumed in GST. The “long wait” can be avoided if the vehicle is RFID affixed and the gate is technically enabled but that’s a different story.

If Einstein found it difficult to understand Income Tax, perhaps he would not have found Indian GST any simpler.

Farmers’ Agitation

Being in Assam it is difficult to understand and appreciate the farmers’ agitation in Mandsaur and Nashik. The problem of plenty in these places as reported is not reflected in the vegetable market of Guwahati even if we take into account the benchmark items viz potato, onion and tomato. Having learnt that Assam is the “emerging state in agricultural growth” as per India Today group and given that there is record agricultural production in  major Indian states and there is  record low level inflation in the country my natural expectation was some  relief in food and vegetable expenses , which has not come true till date.

But articles and opinions published across media on agrarian crisis have not convinced me much. Experts summarize that agriculture currently is an unviable activity in India. If agriculture employs more than half of India’s workforce and contributes less than one fifth to the GDP then more than half of Indian population is underemployed and contributing insignificantly to the national income. If the statement is true then the story that India is an emerging economic powerhouse is redundant.

India’s central bank is primarily focused in controlling inflation. The present RBI governor is continuing the legacy of Raghuram Rajan, who took a rigid stand on inflation and we may recall his inflation vs dosa analogy. As per reports the  country  is  through  the lowest rate of inflation and there is  free fall of food and vegetable prices  and that in turn boomeranged as farmers did not  get right price for their produce. So can we say that the crisis is due to RBI’s mismanagement of the economy?

Various reasons identified by experts include higher input costs and small land holding in agriculture. But the recent problem is in higher output and higher output should have had counter effect to mitigate the problem.  Also both are controllable parameters. If there is indeed overproduction then there has to be a relook at the agricultural policy which at the moment talks about increasing farm productivity and provides various state sponsored incentives.

As possible solutions many are suggesting steps such as loan waiver and minimum support price or MSP. But the banking sector is already in trouble due to bad loan. Also a progressive government should have talked about price discovery through efficient commodity exchanges rather than the archaic MSP.

A new idea suggested in one place is a “decentralized futures market by agri entrepreneurs”. The idea is not clearly elaborated but the reason why existing commodities exchanges can’t be developed to address the problem is not understood. The state policy on agricultural commodity derivative market has been inconsistent since independence and current crisis is probably an opportunity to correct it.

The Power of English Language

It was a pleasant surprise watching a girl from our neighborhood on TV being interviewed as she is one of the successful candidates in the recently declared all India civil services examination. She looked ecstatic but composed and talked very intelligently. Still I could not understand why she had to use a Hindi  word “Kyunki” while talking in decently good Assamese. Perhaps this is the effect of long years of stay in Delhi for exam preparation or may be like “Hinglish” ,“Hassamese” is also developing fast.

Had she been interviewed in English, perhaps we would have heard clear and complete English without a word borrowed from any other language. Here lies the strength of English language which is only because of us, the natives of the former British colony.

The power of English language is so massive that we can conveniently communicate any difficult ideas through it.  For example the Naga rebel leaders said that “shared sovereignty” is the premise of Indo Naga peace agreement. But not many would understand the meaning of “shared sovereignty” and the Government of India can easily avoid giving an explanation.

“Layoff” is a word heard and seen regularly in recent days which means “termination”. Termination sounds harsh but layoff is trendy but consequences are the same. The response of the IT industry regarding layoff is beautifully crafted as “workforce realignment is a normal part of the internal process of companies based on their operational imperatives”.   A well written sentence but can’t mitigate the devastation of layoff.

Commenting on hyper-nationalism by some TV channels in recent times a scholar wrote “Pornography gratifies but fails to satisfy”.  I am yet to understand the comment fully but perhaps the writer would have found it difficult to put across his point in any other language.

AG, LG and the Transformation of Assam Youth

In the late eighties and nineties there used be doubts over the  loyalty of Assamese people  to the Indian State and therefore the central  government at that time whispered  the UPSC to filter out Assamese candidates.  This is what I overheard in a conversation of important individuals long time ago. Any way things have changed completely now and today at least two gentlemen from Assam, AG and LG  are  holding the patriotic flag up and high.

AG  in his new avatar has successfully overtaken the role of Ministry of Home Affairs, Prime Minister’s Office and all investigating agencies. The very first day we learnt from him that Bihar is governed by somebody behind the bar, the second day Sunanda death mystery revealed and so on and so forth. Even we were shown live the movement of maoists in Bastar.

But LG’s case is vexing and I doubt if he himself had anticipated to be a national hero. No doubt as an army man he is a great patriot. But even the army general made a public statement that what LG did was not a professional conduct  and must not be repeated.

But the unfortunate part is that some sections are making him a brave national hero, some are comparing him with the great Ahom general Lachit Barphukan and some elements are trying to crack a joke that “LG is Assam’s Lion”.

Business Correspondents and Payment Banks

Many bank officials are of the view that Business Correspondents or BC  channel is a loss making proposition for banks. But I could not validate the assessment as the BC channel is currently engaged primarily to collect deposits and do small value transactions and the channel is not being engaged to do the core banking activity of lending. However the deposits mobilized by BCs can be used by banks for lending or doing other investment activities. Therefore BCs can’t be held accountable for utilization of deposits by banks.

Like the BC channel, Payment Bank is another project by the Government of India to promote financial inclusion. Eleven entities got payment bank licenses, three of them have already opted out and three have just started working. Since the very beginning experts have been skeptical about the viability of Payment bank business model.Like BCs, payment banks can collect limited deposits, do transactions but can’t lend.

Without a sustainable business model, Payment Bank is not likely to become a success story. Government may perhaps look at expanding the scope of activities of Payment Bank and bring in priority sector lending and micro finance under it.

As per emerging trends we observe that the payment banks that have started operations are converting their wallet/app businesses into payment banking which means it would essentially become an urban business and financial inclusion would take a backseat.