'The Man In The Mirror' Vanished So Unceremoniously

In my schooldays (1983 - 1997) I grew up listening to Western music of a few selected rock n' roll bands and pop singers. Without a grain of doubt I can recall that the first name that flash across my mind when I think of one pop-star is none else but Michael Jackson.

A celebrity's life is not at its pinnacle if it doesn't have enough scandals which give critics their food for thought. Michael Jackson as a celebrity had enough of them. But, to me since my childhood, he has been an angel. His 'Heal The World' was like a hymn to us in school and the most frequently sung opening chorus on our Annual Day. It is the same song which we belted out to win the 2nd prize in an Inter University National Youth Festival.

I never had an inkling of an idea that the 'Man In The Mirror' would vanish away so soon!!

Two Major Moves By LIC And India Post

I am excited about two major moves going to be taken by two different financial services institutions in India. The first move is by Life Insurance Corporation of India (LIC) and the second one is by the Indian Postal Services Department aka India Post.

LIC will be implementing a project called Enterprise Document Management System (EDMS), which they plan to complete by 2011. It will enable LIC to extend 'Anywhere Anytime' service. They have already launched the project in 2007 partnered with Hewlett Packard (HP). It will enable the policy holders or their nominees to pay LIC premium or claim their settlement payment from any location in India. This would indeed make lives of 230 million policy holders across the country much hassle free. Also, the digitization of record of these policy holders will ensure archival of physical records in electronic form and will eliminate risks of loss or damage to physical records due to natural and other disasters.

The second move that I was referring to, by India Post is that they are going to provide on-site ATMs for their customers. To note India Post has 155,000 locations across the country. This would be a massive value-added service to the post-office savings bank account holders. The hours of waiting in long queues at post-offices for withdrawing or depositing money can be cut down substantially. India Post had 228.9 million savings bank accounts with an aggregate outstanding amount in these accounts of US$ 457.89 million (as on March-end 2009).

Is Indian Economy Resilient To A Poor Monsoon?

Delayed monsoon and rising El Niño risks gives me a hint ... “are we going to see once again the market selloff during the drought of 2002?” The water reservoir levels are already low, and this factor coupled with poor monsoon may have adverse effects on farm income, and raise fiscal burdens. We are already halfway through in July and there has been no significant sign of onset of monsoon. My apprehension may turn out to be true depending on the progress in this month.

The year 2009 season has started on a bad note. The overall rainfall for the season until Jun 17 has been 45% below normal, with 28/36 meteorological divisions receiving rainfall below the long-term average. The water levels in reservoirs are at 10% of capacity (vs. norm of 14% for Jun). This is indeed an alarming situation. According to Australia’s Bureau of Meteorology, the signs of a developing El Niño, which usually lead to drought in Asia, have strengthened during the past fortnight. And if their predictions materialize in reality then we are definitely heading towards a crisis situation.

Indian agriculture is no more heavily dependent on monsoon. There has been much progress in the irrigation facility, and also the share of agriculture in GDP has declined. The share of the monsoon-dependent kharif crop has declined. Since 1987, agri output fell in only 5/8 years when monsoon rainfall was +5% below average. Also, the area under irrigation (now 43%) has been rising steadily, albeit gradually. This is a positive indication.

With agriculture now accounting for only 18% of GDP (versus 33% even in the early 1990s), the Indian economy is far more resilient to a poor monsoon season. However, a poor crop will deflate the current buoyancy in farm incomes. At a time of +10% fiscal deficits, there is little room for further fiscal support.

Investor Hostility and the Communist Governed States in India

In one of my earlier posts “Brand Bengal: It’s High Time to Rethink”, dated September 06, 2008 I had discussed the current state of investor hostility in the Communist regime in West Bengal. After the Dubai based Smart City decided to quit its ventures to set up self-sustained townships for information technology and knowledge-based industries near Kochi, Kerala I am compelled to think ‘is investor hostility plaguing communist governed states?’

The proposed Smart City was likely to generate direct employment for 80,000 people and provide indirect employment to another 20,000 people. This is only the employment generation aspect, besides this there are other aspects like revenue generation for the state in the form of taxes, and economic growth of the state which gets adversely affected. Added to this will be a domino effect wherein other investors restrain themselves from investing in projects in Kerala.

When the Tatas pulled out of its Nano project from Singur, West Bengal the immediate loss was over Rs. 5,000 crore and the potential loss was a whopping Rs. 80,000 crores. Smart City, Dubai had urged the Kerala state government to commit at least 12% free land out of the total 346 acres of land. The Kerala government still does not have a clear-cut answer to this issue and have dilly-dallied things.

Kerala and West Bengal are two states where the communists have ruled for long tenures and had once built a strong political base. In West Bengal the current public choice is against the red-brigade, they have been badly beaten in the Panchayat (local self-governments) elections followed by the Parliament elections. The story in Kerala is also similar, and if the investor hostility continues then the communist governments in these two states would have to pack their bags soon.