Sunday, August 28, 2016

Drivers of economic cycle

While arrogance is an indicator of economic cycle topping out, despair reflects the trough. Hope takes the cycle up and reality brings it down. In between these fluctuations, there lies the trend.
Major political events can lengthen or shorten the cycle. Similarly monetary policy shifts, technology trends, employments levels and change in physical infrastructure will have an effect on economic cycles.

In the last 30 years span, during 1989 there was a peak and the next peak came by 1996 after a gap of 8 years. We had to wait for 11 years till 2007 for another peak to surface. We cannot time these cycles, but going by history, if we can assume that 8-12 years is the cycle time between two peaks, it seems the next peak of economic cycle is waiting to reveal itself.
There are three factors which will act as indicator of such a thing happening.
1.     Monetary system (Inflation-interest rates, Money supply): In the last one-two years, RBI has reduced the rates significantly, some of it is transferred to consumers but banking system drowned in bad debt is not passing the complete benefit. Policy rate reducing is a positive sign but preventing the benefit to be passed on shows that system is not ready yet for a peak.
2.    Employment levels and Wages: Recently seventh pay commission has come into force that leaves more money in the hands of Govt. employees and pensioners taking their spending power up. Money at the hands of consumers will have a better velocity and farther reach than the direct spending by Govt, itself. Along with this wages need a boost in private sector and the total employment levels need to go up. When that happens, it helps to fuel the drive to reach a new top.
3.    Infrastructure development: It had come to a halt during the ending years of UPA-2. But with a new stable Govt in place, it is slowly picking up. Once Banks are able to clear their bad debt mess, they would let more money flow into large infra structures and when those projects gain momentum, it would mark the new peak.

Taking a balanced look at these three factors, it appears like we are out of trough but the upward movement is facing lots of resistances. So this cycle is taking a longer time to reach a new top. But keep watching these factors, it will let you identify the top of next cycle.

Friday, August 26, 2016

High speed internet and low speed traffic – A definition of Bangalore

Bangalore, the IT capital of India, has all the right infrastructure when it comes to sending data over internet. IT professionals here move loads of data to client locations all over the world sitting in their offices in Bangalore. That’s great. But check with them at what speed they commute to offices everyday. You will get answers of 5 to 15 km/hour depending on what route they take and what time of the day they travel. A Bangalorean contributes 3x of national average of GDP per capita. But he/she moves at 1/3 rd speed of average traffic movement of India. What a gap, is not it?
I am living in Bangalore for the past 17 years. I live close to Mysore road and go to Whitefield for work. In the early 2000’s this journey was taking anywhere between 45 mins to one hour. As the city grew, there were more vehicles on road, traffic increased at a pace higher than infrastructure growth, so the congestion began, that increased the travel time to 1.5 hours. Then Govt. took few measures to build flyovers and underpasses to reduce traffic jams. While the civil constructions were carried out for these, it narrowed the available space on roads, increasing the travel time to 2 hours for one way commute. Those constructions took couple of years to complete and by then population and the number of vehicles on road had increased, so these flyovers and underpasses did not save any time for us but it increased marginally. Had they not been built, we would have had tough time reaching office on time everyday.
As the next phase, there was NICE road which came up diverting inter-city traffic. Metro construction began and it too took space on the jammed roads to build the huge columns needed for the elevated train. It resulted in the increase of travel time to at least 2.5 hours a day. And one day, Bangalore witnessed huge rains which flooded the whole city, and those of us who left office in the evening reached our homes past midnight. It took 6 hours to travel 30 km that day. We thought of it as one off day but it was not.
Now most of the metro construction is complete and I tried it out one day. From Mysore road to Bayappana halli, it took 40 mins while the same travel on road would have taken at least 2 hours. Good days are here I thought but it did not solve our problem as it does not take us to Whitefield where majority of us work. We are aware of extension plans of Metro but having witnessed that it took a decade to get here, we know before next phase becomes a reality we would have reached our retirement years.
Traffic at KR Puram junction
You cannot say there was complete inaction by the Govt., they did their moves like building outer ring roads, creating one-ways and some more petty stuff but it was not sufficient. Bangalore grew at a pace higher than their expectations. It’s population has gone up 3x in the last 20 years. But the infrastructure building is not as fast resulting in slowing down of the traffic movement. From an average 30 km/hour of commute speed within city twenty years ago, we have been slowed down to 10 km an hour. When you reach office, you are half tired and when you reach back home you are exhausted. Your kids want to play with you and your wife wants you to help her in daily chores, but there is no energy left in you. And during the weekend, you want to take rest while the rest of the family wants you to take them out. It will leave at least one party of the family unhappy.
During this 2.5 hours to 3 hours of commute (one-way) everyday, what do I do? I read 2 news papers and a magazine. I have read more than 100 books during commute hours in the last two years. I speak to friends over phone and get into discussion with fellow bus mates. I complete urgent office work, opening up my laptop and connecting through internet dongle. I also write my blog posts during commute! Well, you can call it ‘life on wheels’. Yes, but we are short of a pantry and toilet which a bus cannot accommodate, else it would not have hurt us this much.
Those who have not visited Bangalore in the recent past and think of it as a beautiful and charming city, please keep your reservations to yourself. When you visit Bangalore next time, your idea of Bangalore will be shattered as you notice that even an Ambulance can’t find a way through this traffic. When you hear of trucks mowing down pedestrians crossing the roads, you will thank God for not living here.
I had thanked God when I had found a job in Bangalore and started to earn a living. But now to reduce the stress and improve our productivity, my employer is allowing me to work from home couple of days in a week. It is a relief, else I would be forced out of Bangalore due to ill health caused by the smoke on the road.

Do I hate Bangalore? No way, I found an identity here. I would rather love Bangalore if it becomes more livable. I hope things get better than getting worse. Else I would be writing my blog posts from else where.

Saturday, August 20, 2016

Religions of India: How one after the other dominated India?

Ancient Indians led a Vedic way of life. But how did it loose prominence to other religions over time? What made the transforming societies living an urban life ignore the Vedic way of life? Was Charvaka’s philosophy which made fun of Vedic philosophy an outcome of changing generation of India? What place Jainism had in those changing times? How Buddhism gained traction for over a thousand years after Gautama Buddha to become the mainstream religion or the soul of India? Some of my questions are discussed in this documentary – Discovery of India.

In the 8th century things got reversed again, Hinduism pushed back Buddhism to become the mainstream religion. A person with the same caliber of Gautama Buddha helped make that change. He was Adi Shankara. He traveled all over India and his convincing arguments made people restore the study of Vedas. His reviews and commentary of ancient texts laid a strong foundation to Advaita Philosophy. Along with that, Bhakti movement led by numerous poets, writers and musicians shaped the religions of modern India. That is documented in this video.

Thursday, August 18, 2016

Food Parks, a new sunrise industry

During the last budget, our Finance Minister expressed intentions to double the farm income in next 5 years. A great initiative, I thought. Anyway farm incomes would rise given the steadily growing demand and short supply causing food pricing soaring high and being a major driver in inflation. But Govt.’s efforts would surely help the farmers. I was thinking in what all ways farm incomes can see an improvement. I wrote them down here.

·       Higher yield (GM seeds, right use of fertilizers and pesticides, right info)
·       Infrastructure (Water and Power supply, better connectivity to markets)
·       Improved storage (modern warehouses, cold storage etc.)
·       Productivity gains (use of farm equipment, imparting skills to farm labors)
·       Wider market (Reducing export restrictions, futures market)
·       Finance (easy loans and crop insurance)

When you look at those factors, while some of it can be done at individual capacity, most of it needs Govt.’s support like developing infrastructure, removing trade barriers etc. And Govt. has started acting on it. (Link:
A food park can help farmers in many ways from providing the right info to sow to connect them with end markets. Strengthening that with right infrastructure would help in every phase of farming. From soil testing to rain forecasts, choosing the right seed to right amount of fertilizer, helping them store the produce to reduce wastage or turn produce into alternate products through food processing and finally helping them to market at the right price. This kind of hand-holding throughout the farming process is necessary to reduce the volatility in supply and in the prices. As more umber of people get out of poverty, their first demand would be increased food consumption. Population is still growing and would need few decades before it tops out. That will also take the food demand high. But the available land does not increase as forest zones are already carved out and all towns and villages are expanding too. Only way out would be to have higher yields with improved methods and facilities. Whole world is noticing this and India needs to lead by example.

India was an agriculture based economy throughout its history. When the human civilization learnt farming, they found that there is no better place than India to grow their food. So large number of migrants settled down here to become part of India. Those farmers financed the kingdoms through taxes. But they remained poor forever. Times are changing. Don’t be surprised if an average farmer’s income matches that of an IT employee in the next ten years. By the way growth in IT parks is seeing saturation but Food Parks are a sunrise industry.

Dear Finance Minister, your wish will come true but it may take little longer than five years. Those looking for long term investments, farm lands should be on your horizon.

Thursday, August 4, 2016

Making India flat (reducing economic unevenness): GST will help a lot

In a big country, there will be unevenness in the resources spread. So will be availability of skill sets and wages too. But people migrating helps it reduce the gaps in wages and skill availability. When it comes to materials, good infrastructure and efficient transportation can help reduce the pricing inefficiencies across markets within India. But the earlier tax system, dominated by different outlooks by respective State Govt.’s had made the playing ground unequal especially for manufactured goods. Take the example of manufacturing of a two-wheeler, its assembly plant is in one state but the raw materials, spare parts come from different states. Tyre's, batteries, spark-plug, speedometer, steel to make chassis do come from different states and attract different tax rates. So producing the same two-wheeler may cost different in different states for the same manufacturer. And the final product too will attract different tax rates when it is being sold. These variations would reduce or cease to exist as GST comes into play. States Govt.’s will lose their power to levy more taxes or to promote any segment with less taxes at their will as there will be one tax collected by the central Govt. and states will to have to collect their share from it. But they have not lost their entire power as few major businesses like liquor are kept out of GST. Yet, this is a welcome move in integrating manufacturing and trade in India and making it one platform and one market.

At the surface level, GST is a great tax reform. It reduces pricing variations and thus promotes trade. That is economics. But it will affect social structure over the long term as it will reduce variations in wages too. Now average incomes of those working in West Bengal and Goa vary a lot. Similarly employment levels are not the same in Kashmir and Kerala. That was because trade was unequal in those states and some of it was due to different tax policies adopted by their state Govt’s. As those taxes get scrapped and the benefits of GST begin to spread, those states who lacked advantage would find themselves at the same level playing field with those states who dominated trade before. So both trade gaps and income gaps will begin to reduce across states making India a homogeneous country economically. India needs to remain diverse in cultures but not in incomes. And GST will help promote it.

Tuesday, August 2, 2016

ದಾಹ ತೀರಿಸೇ ಮಹಾದಾಯಿ


ಮಹಾದಾಯಿ ನದಿ ಉಗಮ

ಉದ್ದ (ಕಿ.ಮೀ)
ನೀರು ಸಂಗ್ರಹ (ಟಿ.ಎಂ.ಸಿ)
ಸಮುದ್ರಕ್ಕೆ ಹರಿದು ಹೋಗುತ್ತಿರುವ ನೀರು (ಟಿ.ಎಂ.ಸಿ)

ಕಳಸಾ-ಬಂಡೂರಿ ಕುಡಿಯುವ ನೀರು ಯೋಜನೆ (ಟಿ.ಎಂ.ಸಿ)

(ಕರ್ನಾಟಕದಲ್ಲಿ ಸಂಗ್ರಹಗೊಂಡಿದ್ದು ಕರ್ನಾಟಕದ ಉಪಯೋಗಕ್ಕೆ)

(Data Source:

ಇದೆಯೇ ಪರಿಸರಕ್ಕೆ ಹಾನಿ?
ಸಮುದ್ರಕ್ಕೆ ಹರಿದು ಹೋಗುತ್ತಿರುವ ನೀರು 200 ಟಿ.ಎಂ.ಸಿ. ಯಲ್ಲಿ ಕುಡಿಯುವ ನೀರಿಗಾಗಿ ಬಳಕೆಯಾಗುವ ಪ್ರಮಾಣ ಕೇವಲ 7.56 ಟಿ.ಎಂ.ಸಿ. ಮಾತ್ರ. ನಾಲ್ಕು ಪ್ರತಿಶತ (೪%) ನೀರು, ಸಮುದ್ರಕ್ಕೆ ಕಡಿಮೆ ಹರಿದು ಹೋದರೆ ಪರಿಸರಕ್ಕೆ ಯಾವ ಹಾನಿಯಾದೀತು?

ಹಾಗಾದರೆ ಯಾರಿದಕ್ಕೇ ಅಡ್ಡಿ?
ನೆರೆ ರಾಜ್ಯದ ಸಾಮಾನ್ಯ ಜನತೆ ಕುಡಿಯುವ ನೀರಿನ ಯೋಜನೆಗೆ ಪ್ರತಿರೋಧ ನಡೆಸರು. ಆದರೆ ಅವರ ಜೊತೆ ಸರಿಯಾದ ರೀತಿಯ ಮಾಹಿತಿ ಸಂಹವನೆಯ ಅವಶ್ಯಕತೆ ಇದೆ.  ಎಲ್ಲಕಿಂತ ಮುಖ್ಯವಾಗಿ ಅಲ್ಲಿಯ ರಾಜಕಾರಣಿಗಳಿಗೆ, ನಾವು ಕೇಳುತ್ತಿರುವುದು ಸಹಾಯ ಅಲ್ಲ ಬದಲಿಗೆ ಅದು ನಮ್ಮ ಹಕ್ಕು ಎನ್ನುವ ಸಂದೇಶ ತಲುಪಬೇಕು.

ಅದು ಯಾರ ಕರ್ತವ್ಯ?
ಅದು ನಮ್ಮ ನಾಯಕರು, ನಮ್ಮ ಜನ ಪ್ರತಿನಿಧಿಗಳು ಮಾಡಬೇಕಾದ ಕೆಲಸ.