Opinion: Bravo Rajan!

Two recent news reports from Raghuram Rajan, Governor of RBI offer wisdom and shows what he stands for. Here they are:

One: RBI Governor Raghuram Rajan's word of caution on 'Make in India' campaign (Link: http://zeenews.india.com/business/news/economy/rbi-governor-raghuram-rajans-word-of-caution-on-make-in-india-campaign_114054.html )

Two: Raghuram Rajan Says It's Not The Regulator's Job to Boost Sensex (Link: http://profit.ndtv.com/news/economy/article-raghuram-rajan-says-its-not-the-regulators-job-to-boost-sensex-712041 )

In the first news item, what Rajan says is ABC of economics. Do what you are good at and outsource the rest to flourish. Instead if every country follows the approach of make it all themselves, there would not be much international trade. And the prices of goods won’t be any less leading to opportunity loss. Manufacturing has worked for China but it does not mean our primary focus should also be the same. Manufacturing creates more jobs and has a lot deeper trickle-down effect than service industry. But what the Prime Minister’s office fails to see is manufacturing is not just labor, it is skilled labor and it also demands uninterrupted power, huge water supply and a robust transportation network to enable moving around things quickly and at low cost. Without the supporting infrastructure, it is not possible to produce at low cost. It takes lot more time to build infra than building factories. When we have so many power plants producing a lot lower power than name plate capacity due to coal & gas shortage, who will power the new factories coming online? And what about the water, chemical supplies? Hopefully you now see, why many goods from plastic goods to solar cells would be lot more cheaper to import than make them here in India. Until we fix infra woes, which may take a couple of years to a decade, focusing on manufacturing may not yield the desired results. So Rajan’s caution is all about economical wisdom but who knows whether the powerful person of India is willing to lend an ear or will he ask Rajan to leave at some time? It would be unfortunate if Rajan’s caution is not taken in right sense.

The second news item is about the priorities of a central banker. Inflation and Rupee valuation come first for RBI before the wish list of finance minister and businessmen. The former Governors of RBI too had this as priority but they were pressured successfully by politicians and businessmen. But Rajan is giving them a miss. He raised rates during UPA-2 governance and now he is able to withstand pressure from NDA Government by not reducing it. It may cost his job, but the rock star Governor made it clear what are his priorities. So I say, “Bravo, Rajan!”

Both inflation and Rupee valuation were hit hard in the past few years. Inflation was stubborn above 8% for many years and Rupee had a good fall from 45 to 60 against dollar. But now, in the last few months, inflation is reversing and Rupee did not give up much when rest of the emerging market currencies were sliding quickly. While RBI can be credited for arresting the Rupee fall but not for bringing down the inflation which is due to softening of crude oil and other commodities.

Since the liquidity is high, bringing down rates by a 100 bps may not increase the inflation, but could help in bringing down the interest costs and help boost economy like it is happening in US. Rajan said he is noticing this, but he will act only on confirmation and that may come very soon. What he says is best is best for us, the common men. Of course his priorities are priorities for the common man too.

PwC Report: India to be $10 trillion economy in 20 years; Too rosy picture?

Cover page of PwC report: Source: PwC site

A report published by PwC says India has the potential to achieve 9% growth rate and become a $10 trillion economy by 2034 (i.e., 5 times of $1.9 trillion in 2014) on the back of concerted efforts by the corporate sector and a constructive role played by the government. (http://www.pwc.in/en_in/in/assets/pdfs/future-of-india/future-of-india-the-winning-leap.pdf)

Here are the major expectations of the report:

• Average life expectancy to increase to 80 years (from 66 years)
• Manufacturing to be 25% of GDP (from 12%)
• Agricultural output to rise to 7.4 tons/hectare (from 4 tons/hectare)

Overall, the report paints an optimistic picture though it considers several scenarios. It took a gap of few years for these optimistic reports to make come back. It is a feel good factor for all Indians and we can cheer at this renewed faith.




But one must not ignore the roadblocks and consider following factors to keep expectations more realistic.

• In the next 20 years, there will be at least 3 elections. If the ruling party does not come back to power, replacing political party/parties have the habit of undoing some of the works done by the previous Govt. So forecasting the policies which will come into force in next two decades is grossly inaccurate task.
• As the economy base increases, growth rates reduce. Many econometric models have shown this and one can look at the data of developed countries for the sake of proof. This would mean 9% growth would be achievable when India is a $2 trillion economy. By the time India becomes $5 trillion economy or so, growth rates will slow and even a 6-7% growth would look fantastic.
•  In a period of 20 years, there would be couple of down years due to economic cycle taking a turn. Nobody has perfected the art or science of forecasting the downturns, the timing or impact of it. Central banks all over the world are still struggling to erase the impact 2008 financial crisis.
• India has tough neighbors and had fought with two of them since independence. As growth kicks in, competition for natural resources and trade will intensify.
• India is a low wage country at present. If wages rise quicker than broader economic growth, it would hurt exports and some of the competitive advantages. Though higher wages boost domestic consumption in the beginning, inflation will also go up limiting further growth in consumption.
• Most of the investments are going into infrastructure space now but the productivity benefits derived out of better public infra is high in the beginning and tapers out over time. Further investments in infra after a decade or so may not produce the same financial returns like those earlier projects. So the investment opportunities in Infra will likely reduce over time as it is happening in Japan and Europe. Also think of ghost towns of China which has also built roads to nowhere.

Considering these speed-breakers in place, one can expect Indian economy to reach $7-8 trillion in next 20 years, if not $10 trillion and an average growth rate of around 7% (instead of 9%). Even if this is achieved, millions of people would move above the poverty line and India would be a front-runner in many fields.

Book Review: Steve Jobs by Walter Isaacson

I finished reading (rather lately though it was in my list for long) the biography of Steve Jobs. And what an experience it was to know the life of innovative and equally crazy person. An adopted child grows to mesmerize the world and brings change to the way people live in his own way. He was always honest and brutal many a times so most people found it difficult to work with him though they admired his thinking. When he was at school he was busy with pranks involving electronic gadgets than making friends. One of his childhood friends, Steve Wozniak, one more person obsessive with electronics, made a good friend of Steve Jobs and both went on to found the business of designing, making and selling computers which is called Apple.

Being abandoned by his biological parents hurt Steve Jobs a lot though the parents who adopted him poured all their love and care and spent their life savings to send him to college. Steve later in his life tracks his biological mother and learns that he has a sister, Monica Simpson, who becomes a confidant of Steve for the rest of his life. When Monica traces their biological father, Steve refuses to meet him.

While he mastered the subject of electronics, his personal life was not a conventional one. He goes to India to learn spirituality. He takes up arts as his subject of study for graduation and does not complete it as he thought it is a financial drain of his parent’s earnings. But incomplete academics were not a drag on his future and the artistic bent of mind of he developed had put him at the junction of technology and art and the products he designed and developed were on the hands of millions of people all over the world.

His personal life was erratic many a times. He makes his girlfriend pregnant and refuses to acknowledge that he is the father of the child for many years after the birth of child, only to take responsibility of her later in life. His attitude towards co-workers earns him a bad name and he is thrown out from running operations of Apple, the company he founded. He starts another company, brings out many creative products but none of them see big commercial success but establish him as an innovator in the industry and that experience also teaches him how to manage a company and not just design products. Apple, in Steve’s absence looses market share as it fails to bring out exciting products after the initial Macintosh product line. Steve is called back and the successful products begin to roll out again putting back both Apple and Steve at the helm. When the products of Apple were a competition to their own products, Steve had said “We need to cannibalize our own products, else someone will”.

This book was the #1 best-seller on Amazon in 2011. When you read this book, you will know why a perfectionist like Steve Jobs was insisting Walter Isaacson to write this biography. It is based on multiple interviews of the author with Steve Jobs and discussions with numerous other people. This book provides multiple perspectives about Steve Jobs, his life as seen by himself and others.

Jatropha: Will low crude kill the interest?

Background

While India and all other oil importing countries are celebrating the drop in crude oil prices, there is one industry in the early phase will see a set-back. That is bio-fuels. All the interest in bio-fuels was due to consistent rise in crude oil prices. There was search for alternate fuels. And bio-fuels seemed to be the answer. Ethanol blending began couple of years ago. Since most of Ethanol is made out of Sugar crop, there was fear that it will lead to shortage of sugar and drive the food prices high. Then the interest turned towards Jatropha, which is a non-food crop and can be grown in semi and non-arable farmlands. It seemed perfect to make bio-diesel out of Jatrpoha seeds. It will reduce oil imports, saves foreign exchange, create jobs in the homeland where there is so much of unemployment and non-arable land. Govt. announced subsidies, organizations began spreading the knowledge, pilot projects kick-started and there were research projects taken up to improve yield of Jatropha crop.

Jatropha farm and its seeds

Bio-fuel economics under threat

Most of the bio-fuel business models assumed crude oil prices remaining high or going up further. Now that crude prices are down (30% approx.), and there seems to be no hurry in getting back to earlier prices as the crude oil capacity is on the rise and demand is not catching up at the same pace.

To keep up with the fall in crude and to make economic sense, yields from Jatropha crop has to go up by at least 30% or so. When the pilot projects are not yet proven for their feasibility, this additional expectation is a burden on the economics of Jatropha crop.

In another development, natural gas (CNG, LNG, LPG) vehicles are becoming popular. An increasing number of vehicles worldwide are being manufactured to run on natural gas. The trend is likely to catch up further as many countries would like make use the new gas discoveries and the biggest of them is USA with their shale gas exploration. As more and more natural gas run cars hit the roads, demand for bio-fuel fades away.

Conclusion

As bio-diesel loses its price competency against the conventional crude oil, Jatropha farmers (there are not many) will find fewer and fewer takers for their crop. An industry in its infancy will face a survival threat. Jatropha seemed to be a solution to isolate from geo-politics for India but when oil producing countries are offering a discount for their natural resource, geo-politics lost its power to influence crude pricing.

 For now it appears that Jatropha has hit a road block. Unless the crude prices come back or Govt. offers further incentives or any improvement in the yield in Jatropha is seen, Jatropha farmers need to stay cautious.

ಪುಸ್ತಕ ಪರಿಚಯ: ಹುಚ್ಚು ಮನಸಿನ ಹತ್ತು ಮುಖಗಳು (ಶಿವರಾಮ ಕಾರಂತ)

ಇದು 'ಕಡಲ ತಡಿಯ ಭಾರ್ಗವ' ಎನಿಸಿಕೊಂಡಿರುವ ಶಿವರಾಮ ಕಾರಂತರ ಆತ್ಮ ಚರಿತ್ರೆ. ಈ ಪುಸ್ತಕದಲ್ಲಿ ಅವರು ತಮ್ಮ ಜೀವನದ ಬಹು ಮುಖ್ಯ ಘಟ್ಟಗಳನ್ನು ಮೆಲುಕು ಹಾಕಿ, ತಾವು ಸಾಗಿ ಬಂದ ಹಾದಿಯನ್ನು ವಿಶ್ಲೇಸಿಸುತ್ತ, ತಮ್ಮ ಬದುಕು ಹಾಗೂ ವ್ಯಕ್ತಿತ್ವ ರೂಪುಗೊಂಡ ಬಗೆಯನ್ನು ಅನಾವರಣಗೊಳಿಸುತ್ತ ಹೊಗುತ್ತಾರೆ.

ಅಪರಿಮಿತ ಕುತೂಹಲ ತುಂಬಿದ, ಜೀವನ್ಮುಖಿಯಾದ ಒಬ್ಬ ವ್ಯಕ್ತಿ ಜಗತ್ತಿನ ಅನ್ವೇಷಣೆಗೆ ತೊಡಗಿದಾಗ, ಆತ ಹಲವಾರು ವಿಷಯಗಳಲ್ಲಿ ಸುಲಭದಲ್ಲಿ ಹಿಡಿತ ಸಾಧಿಸುತ್ತ, ಸಾಹಿತ್ಯ, ಸಂಗೀತ, ನೃತ್ಯಗಳನ್ನು ಒಲಿಸಿಕೊಂಡು, ಇತಿಹಾಸ, ರಾಜಕೀಯ, ತತ್ವಶಾಸ್ತ್ರಗಳಲ್ಲಿ ಪ್ರೌಢಿಮೆ ತನ್ನದಾಗಿಸಿಕೊಂಡು, ಜಗತ್ತಿನ ಉದ್ದಗಲಕ್ಕೂ ಅಲೆಯುತ್ತಾ, ನಾನಾ ಸಂಸ್ಕೃತಿಗಳ, ವಿವಿಧ ವ್ಯಕ್ತಿತ್ವಗಳ ಪರಿಚಯ ಮಾಡಿಕೊಳ್ಳುತ್ತ, ಅದುವರೆಗೂ ಜನ ಗಮನಿಸದಂತ ವಿಷಯಗಳನ್ನು ಗ್ರಹಿಸುತ್ತಾ ಸಾಗುತ್ತಾನೆ. ಅವನ ಜ್ಞಾನದ ಪರಿಮಿತಿ ವಿಸ್ತಾರಗೊಳ್ಳುತ್ತ, ಅವನು 'ನಡೆದಾಡುವ ಜ್ಞಾನಕೋಶ' ಎನಿಸಿಕೊಳ್ಳುತ್ತಾನೆ.

ಒಬ್ಬ ಬರಹಗಾರ ತನ್ನ ಜೀವನ ಅನುಭವದ ತಳಹದಿಯ ಮೇಲೆ, ತನ್ನ ಕಥೆ, ಕಾದಂಬರಿಯ ಪಾತ್ರಗಳನ್ನು ಸೃಷ್ಟಿಸುತ್ತಾನೆ. ಬರಹಗಾರನ ಬದುಕು ಎಷ್ಟು ವಿಸ್ತಾರವಾಗಿರುತ್ತದೋ ಅಷ್ಟು ಅವನ ಕೃತಿಗಳು ಸಂಪತ್ದ್ಭರಿತ ವಾಗಿರುತ್ತವೆ. 'ಚೋಮನ ದುಡಿ' ಯಿಂದ 'ಮೂಕಜ್ಜಿಯ ಕನಸು'  ವರೆಗಿನ ಕಾದಂಬರಿಗಳಲ್ಲಿ ಕಾಣ ಬರುವ ಪಾತ್ರಗಳ ವೈವಿಧ್ಯತೆಗಳು, ಕಥೆಯ ಸಾರ, ಅವುಗಳ ಕರ್ತೃವಿನ ಜೀವನಾನುಭವ ಸೂಚಿಸುತ್ತವೆ. ಬಹು ಮುಖ ಪ್ರತಿಭೆಯ, ಪ್ರತಿಯೊಂದನ್ನು ಪ್ರತಿಶೋಧನಗೆ, ತುಲನೆಗೆ ಒಳ ಪಡಿಸುವ ವ್ಯಕ್ತಿಗೆ, ಬರೆಯುವ ಕಲೆ ಸಹಜವಾಗಿ ಸಿದ್ದಿಸಿ ಬಂದಿತ್ತು. ಕಲೆಯ ಇತರೇ ಪ್ರಾಕಾರಗಳು ಈ ಸರಸ್ವತಿ ಪುತ್ರನಲ್ಲಿ ಮಿಳಿತಗೊಂಡಿದ್ದವು. ಶಿವರಾಮ ಕಾರಂತರು ಕಾಲೇಜು ಪದವಿ ಪಡೆಯದಿದ್ದರೂ, ಎಂಟು ವಿಶ್ವ ವಿದ್ಯಾನಿಲಯಗಳಿಂದ ಗೌರವ ಪೂರ್ವಕ ಪ್ರಧಾನ ಮಾಡಿದಂತ ಡಾಕ್ಟರೇಟ್ ಪದವಿಗಳು, ಅವರ ಬೌದ್ಧಿಕ ಆಳ ಮತ್ತು ಸಾಹಿತ್ಯ ಸಾಧನೆಗಳನ್ನು ಎತ್ತಿ ಹಿಡಿಯುತ್ತವೆ.

ಶಿವರಾಮ ಕಾರಂತರ ಜೀವನ ಚರಿತ್ರೆ ತಿಳಿದುಕೊಳ್ಳಲು ಆಸಕ್ತಿ ಇರುವವರಿಗೆ ಅವರದೇ ಬರವಣಿಗೆ ಇರುವ ಈ ಪುಸ್ತಕ ಉತ್ತಮ ಆಯ್ಕೆ. ಅವರ ಕಾದಂಬರಿಗಳಲ್ಲಿ ಕಂಡು ಬರುವ ಜೀವನ ಸ್ಪೂರ್ತಿ, ಈ ಪುಸ್ತಕದ ಉದ್ದಕ್ಕೂ ಕಾಣಬಹುದು. ಕಾರಂತರು ಈ ಪುಸ್ತಕಕ್ಕೆ 'ಹುಚ್ಚು ಮನಸಿನ ಹತ್ತು ಮುಖಗಳು' ಎಂದು ಹೆಸರಿಟ್ಟರೂ, ನನ್ನ ಪ್ರಕಾರ ಕನ್ನಡ ನಾಡು ಕಂಡ ಹತ್ತು ಪ್ರತಿಭಾನ್ವತರಲ್ಲಿ ಅವರು ಒಬ್ಬರು.

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This is the autobiographical work of veteran writer Shivaram Karanth. In this book he revisits the major milestones of his long and fulfilling life.

When a curious person begins exploring the life, he quickly learns the subject of his interest and moves to another (Literature, Music, Dance, History, Politics, Philosophy and so on), travels from one place to another (all over the world), meets variety of people, witnesses strange incidents and observes what many others overlooked. As the repository of knowledge gets bigger and bigger, he becomes a ‘Walking Encyclopedia’.

A writer, a novelist in particular, creates characters for his fictional work from his own life experiences. Wider the experience of the writer, richer is the novel. From ‘Chomana Dudi’ to award winning ‘Mookajjiya Kanasugalu’ characters and plot of the novels show the breadth and depth of life experiences of their creator. For the multi-talented, well-traveled, exploratory nature person, writing came naturally as a form of creative expression but he was equally successful in other forms of arts as well. Shivaram Karnath did not have a college degree, but the honorary Ph. D’s from at least 8 universities were more of a tribute to his intellectual depth and literary achievements.

For those who are interested in knowing the making and personal life of Shivaram Karanth, this book serves best in his own words. Like in his fictional works, one can observe presence of the life force throughout the length of this autobiography. Though this book is named ‘Ten Faces of a Crazy Mind’, I think Shivaram Karnath is one of the ten wisest men Karnataka has seen.