The newspapers are full of advertisments carrying the third-quarter results of listed Indian companies. I've noticed that most of them have very large numbers for their sales, and other data. However, almost every Indian company in its advertisment has not bothered to put a comma separator after every three digits. Imagine reading the sales of Q3 as 123456 lakh, the corresponding quarter as 112233 lakh and the nine months as 345678 lakh.
First of all, with such big numbers, why doesn't corporate Indian use crore, rather than lakh. Wouldn't it be more useful to read this as 1234.56 crore or 3456.78 crore. Heck, drop the two digits after the decimal that represent the lakh.
Next peeve, why can't these companies simply turn on the comma button on their excel spreadsheets and relable this as 1,234.56 crore rather 1234.56 crore.
Finally, in India, we use lakh and crore. A crore is a hundred lakh. I find it strange that some companies who use the comma, use it wrongly. They say Rs. 123,456. That's bizarre. Shouldn't they say Rs. 1,234,56 lakh to make it clear that the last two digits separate from the crore.
Simply put, capitalism is about big numbers. Big numbers need commas to make them stand out. Even if India doesn't follow the univeral millions and billions, shouldn't it at least get its commas right?
Tuesday, February 3, 2009
Monday, December 1, 2008
Mumbai terror--striking at the symbols of Capitalism in India
Capitalism in India's oldest, brashest, and most powerful symbol is Mumbai. Since it was sold as the dowry of a Portugese princess to the time Asia's first stock exchange was set up to today, when its hotels and cafes there were businessmen, foreigners, movie stars, and ... people who served them, it has always been the Gateway ... to a rising prosperous and confident nation.
No wonder the Taj on the Gateway was the first target of those poor boys from a poor town in the poor Punjab province of the poor country of Pakistan. They, and their masters, knew that to really frighten India, they had to strike at its most potent symbol of capitalism--the Oberoi and the Taj--the two grand dames of Mumbai.
The geographical diversity of the death toll--from Manipur in the east to Delhi in the North; from Bangalore in the South to Porbander in the west--is to me, also, perversely a symbol of spreading capitalism. Energetic young men and women from all parts of our country are today choosing to work, to serve consumers, and to become wealthier by using the same capitalist, free-market system that their fathers had derided.
It is amazing to read that how young Indians--are seizing the opportunities that capitalism is providing to leave their homes and migrate to Mumbai for jobs (which in Mumbai's case is no news--people have been upping sticks and streaming through VT for almost as many generations as have immigrants to the USA passed through the Statue of Liberty on their way to New York).
I've just started reading Imagining India by Nandan Nilekani. His first chapter talks about how India needs to capitalize on its once-in-history demographic dividend by increasing access to education and jobs and to spread wealth, especially in North Indian states.
After the terror attacks in Mumbai, I believe that it's important that capitalism spreads fast not just in India, but also in benighted Pakistan, so that young men from that country have enough opportunities for wealth in their country and in their lifetime, rather than go to another country to seek martyrdom.
No wonder the Taj on the Gateway was the first target of those poor boys from a poor town in the poor Punjab province of the poor country of Pakistan. They, and their masters, knew that to really frighten India, they had to strike at its most potent symbol of capitalism--the Oberoi and the Taj--the two grand dames of Mumbai.
The geographical diversity of the death toll--from Manipur in the east to Delhi in the North; from Bangalore in the South to Porbander in the west--is to me, also, perversely a symbol of spreading capitalism. Energetic young men and women from all parts of our country are today choosing to work, to serve consumers, and to become wealthier by using the same capitalist, free-market system that their fathers had derided.
It is amazing to read that how young Indians--are seizing the opportunities that capitalism is providing to leave their homes and migrate to Mumbai for jobs (which in Mumbai's case is no news--people have been upping sticks and streaming through VT for almost as many generations as have immigrants to the USA passed through the Statue of Liberty on their way to New York).
I've just started reading Imagining India by Nandan Nilekani. His first chapter talks about how India needs to capitalize on its once-in-history demographic dividend by increasing access to education and jobs and to spread wealth, especially in North Indian states.
After the terror attacks in Mumbai, I believe that it's important that capitalism spreads fast not just in India, but also in benighted Pakistan, so that young men from that country have enough opportunities for wealth in their country and in their lifetime, rather than go to another country to seek martyrdom.
Wednesday, November 26, 2008
Vajpayee--the PM who traveled most down the capitalist path
Upfront disclaimer: I worked for four years on Atalji's personal staff.
This post salutes former Prime Minister Atal Bihari Vajpayee as one who from being an instinctive socialist took some of the most capitalist decisions of an Indian PM; directly strengthening capitalism in India.
The BJP is a party that proclaimed its disdain for the license raj. However, it is as wedded to socialism and state control as any other party. Its record in opposition, both before 1998 and after 2004 is one of anti-business, anti-consumer, and pro-government directed growth. Vajpayee is the embodiment of this socialist mindset. He believed in Gandhian socialism. Like McCain, he wasn't much interested in economics or in making every Indian rich.
Therefore, expectations by industry (and mine too) were low when a Vajpayee-led government took charge. At best, the BJP would not block the liberalization path that Manmohan Singh had laid out for India and Chidambaram was trying to take the now-forgotten United Front government.
Contrast with today. Four years after Vajpayee left office, most businessmen--cutting across sectors--will tell you that he and his government did possibly more for business and growth than his successors. The Vajpayee government's many capitalism-friendly decisions created new wealth, widespread wealth, and sustained growth. Yes, there were failures too, most notably in agriculture, which is why India Shining failed, but no one can doubt the record of Vajpayee and growth.
Other PMs didn't walk so far down the road to (capitalist) Damascus. Rajiv Gandhi studied in capitalist Britain and worked for a company. For him, it wasn't too difficult to take the few capitalism-promoting steps that he did. VP Singh was a socialist in name, but a late 80s icon of capitalism, who had too short a tenure. Chandra Shekhar had an even shorter tenure to count. Gowda and Gujral didn't do much. Manmohan Singh is a trained economist and capitalist. For him the road to Capitalism heaven wasn't too difficult to talk. But, for Vajpayee it was.
For him to liberalize first IT, then ISPs, then telecom, then get private investment into highways; then cleared electricity reforms; then lower and simplify taxes (continued by Chidambaram); then give more financial powers to states; then strengthened the banking and securities markets (whose benefits we're seeing today); then by lowering tariffs and allowing foreign investment, including the then-contentious issue of insurance; then by actively privatizing government assets (backed by the redoubtable Arun Shourie); then improving relations with America and other capitalist nations; then awarding businessmen Padma Shris and Padma Bhushans (till him, there were very few such winners); then always talk about how the average citizen looked to create wealth for himself and his family--either through business or through a job--he did more than any other.
Vajpayee's record as a capitalist PM was so strong that the opposition Congress routinely denounced him as going too far down the accepted socialist path. But Vajpayee understood how wealth was created--and it wasn't by the state--and in his own way he laid the foundation for a political shift to growth. Today, no PM or more importantly no CM can not talk about attracting private investment, fostering employment, and promoting growth.
Atalji, you've been known as the Bhishma Pitamah of politics. I call you the Bhishma Pitamah of Indian capitalism.
This post salutes former Prime Minister Atal Bihari Vajpayee as one who from being an instinctive socialist took some of the most capitalist decisions of an Indian PM; directly strengthening capitalism in India.
The BJP is a party that proclaimed its disdain for the license raj. However, it is as wedded to socialism and state control as any other party. Its record in opposition, both before 1998 and after 2004 is one of anti-business, anti-consumer, and pro-government directed growth. Vajpayee is the embodiment of this socialist mindset. He believed in Gandhian socialism. Like McCain, he wasn't much interested in economics or in making every Indian rich.
Therefore, expectations by industry (and mine too) were low when a Vajpayee-led government took charge. At best, the BJP would not block the liberalization path that Manmohan Singh had laid out for India and Chidambaram was trying to take the now-forgotten United Front government.
Contrast with today. Four years after Vajpayee left office, most businessmen--cutting across sectors--will tell you that he and his government did possibly more for business and growth than his successors. The Vajpayee government's many capitalism-friendly decisions created new wealth, widespread wealth, and sustained growth. Yes, there were failures too, most notably in agriculture, which is why India Shining failed, but no one can doubt the record of Vajpayee and growth.
Other PMs didn't walk so far down the road to (capitalist) Damascus. Rajiv Gandhi studied in capitalist Britain and worked for a company. For him, it wasn't too difficult to take the few capitalism-promoting steps that he did. VP Singh was a socialist in name, but a late 80s icon of capitalism, who had too short a tenure. Chandra Shekhar had an even shorter tenure to count. Gowda and Gujral didn't do much. Manmohan Singh is a trained economist and capitalist. For him the road to Capitalism heaven wasn't too difficult to talk. But, for Vajpayee it was.
For him to liberalize first IT, then ISPs, then telecom, then get private investment into highways; then cleared electricity reforms; then lower and simplify taxes (continued by Chidambaram); then give more financial powers to states; then strengthened the banking and securities markets (whose benefits we're seeing today); then by lowering tariffs and allowing foreign investment, including the then-contentious issue of insurance; then by actively privatizing government assets (backed by the redoubtable Arun Shourie); then improving relations with America and other capitalist nations; then awarding businessmen Padma Shris and Padma Bhushans (till him, there were very few such winners); then always talk about how the average citizen looked to create wealth for himself and his family--either through business or through a job--he did more than any other.
Vajpayee's record as a capitalist PM was so strong that the opposition Congress routinely denounced him as going too far down the accepted socialist path. But Vajpayee understood how wealth was created--and it wasn't by the state--and in his own way he laid the foundation for a political shift to growth. Today, no PM or more importantly no CM can not talk about attracting private investment, fostering employment, and promoting growth.
Atalji, you've been known as the Bhishma Pitamah of politics. I call you the Bhishma Pitamah of Indian capitalism.
Wednesday, November 19, 2008
India's second most capitalist state: West Bengal
Gujarat is India's most capitalist state. Big small businesses, small businesses, global connect, share ownership, government-driven capitalism--under all these heads, Gujarat leads the country.
The next state, in my opinon, is West Bengal. Yes, thirty plus years of Communist rule, ave propelled this state to the second spot in a rough index of capitalism. Incidentally, Punjab would rank third.
How do I make this counter-intuitive argument. Simple: West Bengal has the number of capitalists as a proportion of its population than any other state of the Union--more than Gujarat too. These are not shareholders of listed companies, as are many Gujaratis. Neither are they workers in big businesses. But, they are: farmers!
Yes, thirty years after Operation Barga gave West Bengal the highest rate of land redistribution, it has created two generations of farmers who own their own land--and this is what propels the state firmly into the capitalist side. A communist measure is promoting the most diversified ownership of a factor of production--land, labor (UP), and capital (Gujarat).
(Operation Barga was the name given to the land reforms program of the first communist Government of Bengal, elected in 1977, that took land away (sometimes forcibly) from big landlords and gave it to farmers. This has had the side-benefit of making Bengal's farmers overwhelmingly vote for the Communists, and city dwellers for the Trinamool Congress.)
It may be a small plot, but widespread ownership has encouraged farmers to invest in their land and to make even more productive. Which is why, West Bengal now leads the nation in many agricultural rankings.
According to the 2007-08 Economic Survey, http://indiabudget.nic.in/es2007-08/chapt2008/tab115.pdf, West Bengal is number one in rice with 16 percent of India's production. It's number two in potatoes with 31 percent of output.
In fruits and vegetables, the results have been the most startling. According to the 2008 statistics of the Ministry of Agriculture, http://dacnet.nic.in/eands/At_Glance_2008/hpcrops_new.html, Table 5.7 which gives data for the area under cultivation of fruits and vegetables is revealing. In 1990-91, West Bengal was ranked 2 with 871,000 hectares. Orissa was 1 with 996,000 hectares, and UP was a close 3 with 867,000. In 2005-06, West Bengal had risen to 1,455,000 hectares--a clear number 1, UP was 2 with 986,000, and Orissa had fallen to 3 with 975,000 hectares.
This expansion into cash crops (and fruits and vegetables are cash crops--farmers have to sell it in the markets--they can eat only a small portion of what they grow) is another proof of West Bengal's capitalist outlook. If lots of small farmers have to go to a market to sell their produce--and fruits and vegetables (and potatoes too) don't have state guaranteed minimum prices--then they are all capitalists.
The consequence of all this agriculutural capitalism is clear. Again, according to the 2007-08 Economic Survey, http://indiabudget.nic.in/es2007-08/chapt2008/tab18.pdf, West Bengal's yearly per capita income is Rs. 25,226, close to the national average of Rs. 25,716. This is commendable for a state that was for long seen as a byword of economic stagnation.
Owning your land--a dream for farmers in many other states--has created this new class of capitalist farmers and got West Bengal on the road to growth. China went down the same road--reforming agriculture in the early eighties, before moving onto industry in the nineties.
Indeed, now it's clear to me why there's so much opposition in West Bengal to land acquisition for industrialization. Lots of small farmers own only their land, and they're loath to give it up, because like all good capitalists, they've learnet how to extract the best profits from an asset.
If capitalism is not just alive and kicking, but also scoring in West Bengal (to use an appropriate football analogy for the soccer-mad State), then surely the same capitalism can also turn around the fortunes of other States.
The next state, in my opinon, is West Bengal. Yes, thirty plus years of Communist rule, ave propelled this state to the second spot in a rough index of capitalism. Incidentally, Punjab would rank third.
How do I make this counter-intuitive argument. Simple: West Bengal has the number of capitalists as a proportion of its population than any other state of the Union--more than Gujarat too. These are not shareholders of listed companies, as are many Gujaratis. Neither are they workers in big businesses. But, they are: farmers!
Yes, thirty years after Operation Barga gave West Bengal the highest rate of land redistribution, it has created two generations of farmers who own their own land--and this is what propels the state firmly into the capitalist side. A communist measure is promoting the most diversified ownership of a factor of production--land, labor (UP), and capital (Gujarat).
(Operation Barga was the name given to the land reforms program of the first communist Government of Bengal, elected in 1977, that took land away (sometimes forcibly) from big landlords and gave it to farmers. This has had the side-benefit of making Bengal's farmers overwhelmingly vote for the Communists, and city dwellers for the Trinamool Congress.)
It may be a small plot, but widespread ownership has encouraged farmers to invest in their land and to make even more productive. Which is why, West Bengal now leads the nation in many agricultural rankings.
According to the 2007-08 Economic Survey, http://indiabudget.nic.in/es2007-08/chapt2008/tab115.pdf, West Bengal is number one in rice with 16 percent of India's production. It's number two in potatoes with 31 percent of output.
In fruits and vegetables, the results have been the most startling. According to the 2008 statistics of the Ministry of Agriculture, http://dacnet.nic.in/eands/At_Glance_2008/hpcrops_new.html, Table 5.7 which gives data for the area under cultivation of fruits and vegetables is revealing. In 1990-91, West Bengal was ranked 2 with 871,000 hectares. Orissa was 1 with 996,000 hectares, and UP was a close 3 with 867,000. In 2005-06, West Bengal had risen to 1,455,000 hectares--a clear number 1, UP was 2 with 986,000, and Orissa had fallen to 3 with 975,000 hectares.
This expansion into cash crops (and fruits and vegetables are cash crops--farmers have to sell it in the markets--they can eat only a small portion of what they grow) is another proof of West Bengal's capitalist outlook. If lots of small farmers have to go to a market to sell their produce--and fruits and vegetables (and potatoes too) don't have state guaranteed minimum prices--then they are all capitalists.
The consequence of all this agriculutural capitalism is clear. Again, according to the 2007-08 Economic Survey, http://indiabudget.nic.in/es2007-08/chapt2008/tab18.pdf, West Bengal's yearly per capita income is Rs. 25,226, close to the national average of Rs. 25,716. This is commendable for a state that was for long seen as a byword of economic stagnation.
Owning your land--a dream for farmers in many other states--has created this new class of capitalist farmers and got West Bengal on the road to growth. China went down the same road--reforming agriculture in the early eighties, before moving onto industry in the nineties.
Indeed, now it's clear to me why there's so much opposition in West Bengal to land acquisition for industrialization. Lots of small farmers own only their land, and they're loath to give it up, because like all good capitalists, they've learnet how to extract the best profits from an asset.
If capitalism is not just alive and kicking, but also scoring in West Bengal (to use an appropriate football analogy for the soccer-mad State), then surely the same capitalism can also turn around the fortunes of other States.
Monday, October 27, 2008
MK Gandhi: India's first capitalist
Mohandas Karamchand Gandhi: "Father of the Nation"; "Against Western consumerism for decades"; "Swadeshi's most ardent supporter"; "Charkha's Creator"--these are all labels that one easily attaches to Gandhi. But, "India's first capitalist"? Yes, I strongly believe so.
Just as October 2008 has shown that capitalism is not the erstwhile Washington Consensus or the Anglo-Saxon model, so too, I believe that the cloak of capitalism certainly covers (and fits well) the man who chose a loin-cloth as his symbol (in Madurai in 1921).
Why do I believe this. Simple: Gandhiji was for individuals going out and creating wealth for themselves. The charkha was his favored tool. He believed that if individuals labored on their own, they could create wealth for themselves and their families. He never approved communist-style collectivism; nor was he a believer in some "third-way" cooperative model. Yes, his capitalism wasn't about large listed companies, but it was about market forces and prices being set by the same laws that Adam Smith had postulated.
He postulated that India's demands for cloth was more than its domestic supply--and thus there was a market for handspun and hand-woven khadi. Yes, he didn't believe in foreign trade, but in the 1920s, when his economic beliefs became clearer, the un-divided India was truly a sub-continent with an economy that was large enough to grow on its own.
Apart from this fundamental belief in individuals, he had strong supported technology--only his was what he felt "appropriate" technology, and appropriate was defined as appropriate for India's villages. Indeed Gandhiji's belief about villages becoming economic entities is, in my view, nicely repackaged eighty plus years later as the pithy: "Fortune at the Bottom of the Pyramid". Gandhi was certainly aware of the bottom of the pyramid and he did all he could to increase its fortune.
Gandhiji's Gujarat was as mercantile a community as it is today. He went to South Africa to fight a case for a businessman--an early example of globalization in services (at least services in the British Empire), where qualifications in one part--the Inns of Court at London--were recognized in East London, thousands of kilometers away--just as the WTO now urges countries to do. MK Gandhi never hesitated to work with mill-owners, businessmen, and other sundry capitalists in Imperial India--from Ahmedabad's Sarabhais to Mumbai's Parsis--the Tatas and Godrejs were as large contributors to him then as they are to the rest of the nation today.
Gandhi had a clear idea of economics and its power. By substituting homegrown yarn and cloth for the mills of Lancashire, he consciously struck at the root of the Raj--the commercial interests that kept India part of an Empire. And, when those commercial interests were reduced--and weakened by World War 2--the British walked away--leaving Gandhi to father a nation, but also unconsciously become India's first capitalist
Just as October 2008 has shown that capitalism is not the erstwhile Washington Consensus or the Anglo-Saxon model, so too, I believe that the cloak of capitalism certainly covers (and fits well) the man who chose a loin-cloth as his symbol (in Madurai in 1921).
Why do I believe this. Simple: Gandhiji was for individuals going out and creating wealth for themselves. The charkha was his favored tool. He believed that if individuals labored on their own, they could create wealth for themselves and their families. He never approved communist-style collectivism; nor was he a believer in some "third-way" cooperative model. Yes, his capitalism wasn't about large listed companies, but it was about market forces and prices being set by the same laws that Adam Smith had postulated.
He postulated that India's demands for cloth was more than its domestic supply--and thus there was a market for handspun and hand-woven khadi. Yes, he didn't believe in foreign trade, but in the 1920s, when his economic beliefs became clearer, the un-divided India was truly a sub-continent with an economy that was large enough to grow on its own.
Apart from this fundamental belief in individuals, he had strong supported technology--only his was what he felt "appropriate" technology, and appropriate was defined as appropriate for India's villages. Indeed Gandhiji's belief about villages becoming economic entities is, in my view, nicely repackaged eighty plus years later as the pithy: "Fortune at the Bottom of the Pyramid". Gandhi was certainly aware of the bottom of the pyramid and he did all he could to increase its fortune.
Gandhiji's Gujarat was as mercantile a community as it is today. He went to South Africa to fight a case for a businessman--an early example of globalization in services (at least services in the British Empire), where qualifications in one part--the Inns of Court at London--were recognized in East London, thousands of kilometers away--just as the WTO now urges countries to do. MK Gandhi never hesitated to work with mill-owners, businessmen, and other sundry capitalists in Imperial India--from Ahmedabad's Sarabhais to Mumbai's Parsis--the Tatas and Godrejs were as large contributors to him then as they are to the rest of the nation today.
Gandhi had a clear idea of economics and its power. By substituting homegrown yarn and cloth for the mills of Lancashire, he consciously struck at the root of the Raj--the commercial interests that kept India part of an Empire. And, when those commercial interests were reduced--and weakened by World War 2--the British walked away--leaving Gandhi to father a nation, but also unconsciously become India's first capitalist
Sunday, September 21, 2008
After Wall Street's crash, is capitalism still recommended
I'm starting this blog--my first--to talk about my favorite topic. How do you promote capitalism across India--businesses, states, communities--and make our country richer, faster.
It seems that the week after the Wall Street Crash isn't the good time to talk about the virtues of capitalism. But, the crash itself offers one good example to India. The speed at which businesses have shut, merged, or been bought is a good contrast to the delays that happen in India.
Take two examples. When UTI was in trouble, it took one committee many months to recommend that the government take over UTI and separate it into good and bad parts. Eventually, the government profited by this, but the weeks and months it took to agree to this, contrasts poorly with the hours for the Government, for buying banks (BoA, Barclays, Lloyds) to decide. Heck, they worked on Sundays too. Now, things aren't so bleak for Lehman, and the stockmarkets have also digested this (of course, with lots of help from Uncle Sam!)
The Harshad Mehta scandal took a parliamentary committee years to unravel. The case between NHB and Standard Chartered had to go to the Supreme Court many years later.
Lesson from last week. Good capitalism is fast capitalism. Some of India's businesses are fast as elsewhere--telecom, IT. Some are as slow as other countries--picking the winning bidder for airport privatization--and I mean this as a compliment. Some, unfortunately are much slower. POSCO's steel plant has been talked for years; yet, it's not even started construction.
It seems that the week after the Wall Street Crash isn't the good time to talk about the virtues of capitalism. But, the crash itself offers one good example to India. The speed at which businesses have shut, merged, or been bought is a good contrast to the delays that happen in India.
Take two examples. When UTI was in trouble, it took one committee many months to recommend that the government take over UTI and separate it into good and bad parts. Eventually, the government profited by this, but the weeks and months it took to agree to this, contrasts poorly with the hours for the Government, for buying banks (BoA, Barclays, Lloyds) to decide. Heck, they worked on Sundays too. Now, things aren't so bleak for Lehman, and the stockmarkets have also digested this (of course, with lots of help from Uncle Sam!)
The Harshad Mehta scandal took a parliamentary committee years to unravel. The case between NHB and Standard Chartered had to go to the Supreme Court many years later.
Lesson from last week. Good capitalism is fast capitalism. Some of India's businesses are fast as elsewhere--telecom, IT. Some are as slow as other countries--picking the winning bidder for airport privatization--and I mean this as a compliment. Some, unfortunately are much slower. POSCO's steel plant has been talked for years; yet, it's not even started construction.
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