Monday, January 27, 2020

Did Congress Partition The Country Based On Religion?

One statement that BJP leaders keep repeating is "Congress partitioned the nation on the basis of religion". Of late, they have been using it to defend CAA. In the Loksabha, on the debate on CAA, Amit Shah said "If Congress had not partitioned the country on the basis of religion, this bill would not have been needed. Who divided the nation on the basis of religion? Congress divided the nation on the basis of religion." Watch him saying the same:


The same statement was repeated by him in multiple rallies that he conducted in support of CAA. In one such rally in Jabalpur, he said: "When the country was divided, Congress divided it on the basis of religion ". Watch him saying the same :



While the frequency of this accusation has increased in recent times, BJP and its supporters have been making this allegation for quite some time. Ex DUSU general secretary from ABVP and owner of the TV channel India TV, journalist Rajat Sharma obliquely referred to the same while asking a question to Shashi Tharoor in Aap Ki Adalat more than a year back. He said "You say Congress keeps Hindus and Muslims Together. Who divided the nation?" Listen:

Since this allegation is getting repeated, it is time to examine the truth of the statement. 

If one observes the statement carefully, one finds that it has two parts.
a. Congress divided the nation.
b. The nation was divided on the basis of religion.

Let us examine both these parts in detail.

Did Congress divide the nation?
The answer to this question is an emphatic no. When India became independent on 15th August 1947, it was already divided. Actually, Pakistan celebrated its independence one day before India on 14th August 1947. Before 15th August 1947, India was ruled by Britishers and only they could divide the nation. So, the allegation that Congress divided the nation is wrong because it was British who divided the nation. Congress got a divided nation from Britishers to rule.

One more related question is "Which Party in British-ruled India was demanding a separate nation?" The answer to that is Muslim League. It was Muslim League that was demanding a separate nation and Congress was actually opposing it. So, besides Britishers, it was Muslim League that was responsible for the division of the country. Congress never demanded a separate nation and hence it cannot be held responsible for the division.

It is clear that Congress was opposing the partition. Muslim league was demanding it. What was the position of other parties on the partition? Considering that BJP is making the allegation, the position of  Hindu Mahasabha becomes important. It is pertinent to note that BJP has its origins in Hindu Mahasabha. Jan Sangh to which most of its leaders including Atal Bihari Vajpayee and Lal Krishna Advani belonged was founded in 1951 by Shyama Prasad Mukherjea who was the president of Hindu Mahasabha between 1943 and 1946. Thus Jan Sangh was an offshoot of Hindu Mahasabha and BJP has been created out of Jan Sangh.

VD Savarkar, who was the president of Hindu Mahasabha between 1937 and 1943, was of the opinion that there are two nations in India. A Hindu nation and a Muslim nation. He was also of the opinion that these two nations are antagonistic to each other. In his presidential speech at Ahmedabad in 1937, he said the following. (Source - Page 16 Of Hindu Rashtra Darshan, Collection of Savarkar's speeches as Hindu Mahasabha President)
"As it is, there are two antagonistic nations living side by side in India. Several infantile politicians commit the serious mistake in supposing that India is already welded into a harmonious nation, or that it could be welded thus for the mere wish to do so...
Let us bravely face unpleasant facts as they are. India cannot be assumed today to be a Unitarian and homogeneous nation, but on the contrary, there are two nations in the main; the Hindus and the Moslems, in India.
"

So, as far as the two-nation theory goes, both the Muslim League and Hindu Mahasabha were on the same page and speaking the same language. That being the position of Hindu Mahasabha, BJP holding Congress responsible for partition is like "The pot calling the kettle black".

One more related question which is asked in this regard is as follows: "Why did Congress agree to the partition if it was opposed to it?" To answer this question, we need to understand the alternatives to the partition. The other alternative was to remain under British rule. Maybe for some year, or maybe forever. It should be noted that the Second World War and its aftereffects on Britain were one of the primary reasons for India's Independence. If Congress had not accepted the proposal of partition and Independence at that time, it was highly likely that within a couple of years Britain would have been able to rebuild itself and the offer of Independence would have permanently disappeared. Considering this, delaying independence would not have been a wise decision. 

Another important factor behind Congress accepting the partition was the ongoing Hindu-Muslim riots in the country for a separate Pakistan. The riots that started in Bengal in August 1946 claimed thousands of lives and they were the biggest Hindu-Muslim riots till then. Also, instead of dying down, these riots quickly spread to other parts of the country and Bihar, Noakhali( Bangladesh), UP, Bombay, Punjab, and NWFP also saw the biggest riots of their times. It appeared that the country is in a civil war-like situation and the only way out was to accept a separate Pakistan.

Thus, it is clear that even if Congress was opposed to partition and fought against it tooth and nail, circumstances forced it to accept partition. The alternatives to not accepting partition were far more dangerous and would have cost India its freedom and peace.

Was the nation divided on the basis of Religion?
To answer this question we need to understand the meaning of the division on the basis of religion. When two countries are divided on the basis of religion, it is assumed that people from one religion will stay in one country and another religion in another country. But, India was not divided on that basis. It is true that Pakistan was created out of Muslim Majority provinces of India. But it was never the intention or stated objective of partition that the people of minority religions in respective countries will have to move to another country. At the time of partition, it was understood that Hindus living in Pakistan will continue to live there and Muslims of India will continue to live in India. It is a historical fact that the Initial demand of Pakistan contained the whole of Punjab and  Bengal provinces, including today's Indian states of Punjab, West Bengal, and Assam. It was only after the protests from Congress that Muslim League and Britishers agreed to bifurcate the states of Punjab and Bengal and Hindu majority districts of these states were allowed to go to India. Thus it can be said that the religion was not the basis of partition in the sense that Hindus will live in India and Muslims will live in Pakistan. It is also important to know that a lot of movement of people from both sides of the border on the basis of religion happened because of the gruesome riots that followed the partition. Actually, the wrong notion that the country has been divided on the basis of religion and that people of minority religions in respective countries should move to the other side was one of the primary reasons for the riots. The division of the country on the basis of religion is a tool that has been used by the rioters to instigate people to throw minority communities out of their respective countries. No wonder that the BJP, which relies on division among communities, continues to use it even today for furthering their agenda.

Monday, January 7, 2019

PMJDY - "Dholak Bajao, Naam Kamao"??



If one analyzes the successful schemes of the Modi government, one always finds the following commonalities in them.

  • Most of the successful schemes are from the previous government.
  • The current government has changed their names.

This has led people to claim that the Modi government is not a "game-changing" one, but a "name-changing" one. While this claim is obvious for anyone to see, it should not stop us from analyzing the claimed achievements of the current government and comparing them with the previous one. A critical analysis of the claimed achievements and their comparison with the previous government gives us some more common themes.

  • Most of the successful schemes were reasonably successful even in the previous government.
  • The previous government built the framework/infrastructure for the success of these schemes and was on its course to achieve the desired success over a period of time.
  • Even though the previous government built the desired framework/infrastructure for the success of the schemes and successfully ran them for a period of time, it failed to market these successes even on a small scale. Hence the common man of the country is not even aware that the previous government had implemented these schemes and was successfully running them.
  • The current government spent a huge amount of money on marketing these schemes so that people forget the achievements of the previous government.
  • Almost in all the cases, the current government compares the achievements of its schemes against the 2011 census data. Since the census data was collected between March 2010 and March 2011, it allows the current dispensation to show the achievements of the last four years of the previous government also as its own, thus showcasing its achievements at double the rate of what it has actually achieved.
And finally, the most important one
  • Once it becomes clear to Mr. Modi that all the infrastructure to successfully execute the scheme is in place and that the scheme is running successfully without any hindrance for some time, the target of the scheme is raised to an eye-popping level and everybody in the government is pushed to meet that target so that a big achievement can be announced. These targets are advertised on a large scale and the celebrations for the success are also held on a grand scale. It is pertinent to note that even if these eye-popping targets were not set, given the availability of the infrastructure to execute the schemes and the reasonable success in running them, the schemes would have succeeded anyways. Thus all that Mr. Modi does is to take a successfully running scheme and makes a spectacle out of it and claims it as his success. This I call as The Modi Development Model or "Dholak Bajao, Naam Kamao" Model. While the real work is done by his predecessor, Mr. Modi comes with his drums, plays them loudly and claims these as his success. This is visible in most of the successful schemes of Mr. Modi.

We will look at one of the most talked about successful schemes of this government and try to see if we are able to find these patterns in it.

Pradhan Mantri Jan Dhan Yojana

Claim - As per the PMJDY website, 33.66 crore bank accounts have been opened in the last four and half years since its launch. Though, as per RBI annual reports of 2013-14 and 2017-18, the number of Jan Dhan accounts (RBI still uses the old name BSBDA) opened between March 2014 and March 2018 stood at 29.3 crores. Between March 2017 and March 2018, only 30 lakh new Jan Dhan accounts were opened. Hence the claim of 33.66 crores on the PMJDY website is exaggerated by around 4 crores if we go by the RBI numbers. But still, the number of accounts opened is large even if we take the RBI number.

Now, let us see what was done regarding the opening of bank accounts by the previous government.

Name of the Scheme in the previous government - Basic Savings Bank Deposit Account Scheme or BSBDA Scheme.

Achievements under BSBDA 
  1. As per the RBI annual report of 2013-14, the total number of BSBDAs(renamed to Jan Dhan Account by the current government) opened stood at 24.3 crores.
  2. In the FY 2013-2014, a total of 6 crores BSBDAs were opened.
  3. The number of BSBDAs opened were rising year on year during the UPA-2 regime. So, while 2 crore BSBDAs were opened in FY 2010-11, 4.4 crores were opened in FY 2011-12 and 6 crores were opened in FY 2012-13.
  4. If one looks at the increase in the number of BSBDAs opened on a yearly basis, one can easily conclude that in the subsequent years, it would have increased to 7-8 crores per year.
  5. Based on this run-rate, it is easy to conclude that 30 crores BSBDAs would have been opened by FY 2018, even at the rate at which the previous government was running the scheme, which is same as the achievement of Pradhan Mantri Jan Dhan Yojana by FY2018. 
  6. It needs to be noted that no advertising was done for BSBDAs and these goals were achieved without even people noticing it. If a general survey would have been conducted, even those people for whom BSBDAs were opened will not be able to tell the name of the scheme under which their accounts were opened.
Infrastructure/framework for the BSBDA scheme
  • No Frills/Zero Balance/BSBD Account -  It was a stated goal of the newly elected UPA government in 2004 to double the formal credit to the agriculture sector in the next three years(Common Minimum Programme 2004). But as per the NSSO survey of 2003, only 27% of total farm households were indebted to the formal sources. Hence there was a need to increase the banking access to farm households. This and some other concerns arising out of the 2001 census and some other surveys led the RBI to ask the banks to make Financial Inclusion as their goal in 2005.  It sent notifications in the same year to the banks to introduce "Zero Balance" or "No Frills" account, which was also called BSBD Account. By March 2006, 5 lakh BSBDAs were opened which increased to 24 crores by March 2014.
  • Removing the need of Introduction/Easier KYC - Till 2005, Banks were insisting on introduction from an existing customer to open a bank account. Such introducers were expected to give an undertaking that they know the person whose account is getting opened for at least six months. RBI instructed banks to remove the need for introduction and lengthy KYC processes for the accounts until deposits in those accounts did not exceed more than one lakh Rupees.
  • Pilot project for 100% financial inclusion in 100 Districts - A pilot project was run to achieve 100% financial inclusion in 100 districts of the country in the FY 2006-07. The lessons learned from this pilot were applied later to other districts. Slowly, the number of such districts was increased to 340 in 2007.
  • Use of Banking Correspondents/Branchless Banking outlets - This has been the real differentiator from the rural banking perspective. In Jan 2006, RBI permitted the banks to use Banking Correspondents or Banking Facilitators as their intermediaries and issued the guidelines for the Banks to hire and use their services. The number of branchless banking outlets/BCs in villages went up from zero in Jan 2006 to 3,37,000 by March 2014. The importance of this number increases when we realize that India has only 6 lakh villages. Thus, by March 2014, India had one "BC" for every two villages.
  • Rural Banking Branches - To increase the number of branches in the rural areas, RBI relaxed the norms for opening the branches in the rural areas. It allowed the banks to open branches in tier 2 to tier 6 areas (tier 5 and 6 are rural areas) under general permission subject to reporting. It was mandated that 25% of all the new bank branches need to be opened in the unbanked rural areas(tier 5 and tier 6). 
  • White Lable ATMs - RBI allowed private parties to operate and run the ATMs. This led to the opening of ATMs in the areas that were unbanked till now.
Status as per the 2011 Census
Census 2011 estimated that out of 24.67 crore households in the country, 14.48 crore (58.7%) households had access to banking services. Of the 16.78 crore rural households, 9.14 crore (54.46%) were availing banking services. Of the 7.89 crore urban households, 5.34 crore(67.68%) households were availing banking services. This 55% of rural households using the banking facilities are used in marketing the achievements of PMJDY quite extensively. It needs to be noted that this number ignores the fact that between March 2010 to March 2014, almost 17 crore new accounts were opened by the UPA government. So, while there is no data to know the actual rural household coverage by March 2014, this 55% number from the 2011 census grossly underrepresents the achievements of the UPA government.

The Modi effect on Pradhan Mantri Jan Dhan Yojana
  • Name Change - The name of the scheme was changed to Pradhan Mantri Jan Dhan Yojana. BSBDAs were now called Jan Dhan Accounts.
  • Huge Marketing BudgetModi government spent 100 crore Rs. just in the initial 30-40 days of the launch of the scheme to advertise it. This was necessary to claim the scheme as their own and remove any traces of achievements of the previous government which has spent close to zero on advertising BSBDAs.
  • Raising the Target - Once the Modi government realized that in the next 3-4 years, the banking services will reach every household in the country at the current rate, a serious attempt was made to market it as a great achievement of the Modi government. The target for the account opening was more than doubled. While opening 7-8 crores accounts would have been part of the course, a target of 15 crore accounts was set. Bank officials were pushed to meet this target so that the Modi government could claim a great achievement.
  • Dholak Bajao, Naam Kamao - Once the target of 15 crore new accounts were met, Modiji kept reminding people in every rally, meeting, and forum that he has done something great for the country. No one bothered to ask him, what would have happened if the bank accounts were created at the old rates.
Thus, Pradhan Mantri Jan Dhan Yojana is a prime example of how Modiji operates. A scheme that was on its way to succeeding because of the efforts of the previous government was completely taken over, advertised and marketed to claim great success. 

Wednesday, December 19, 2018

Saubhagya - Modi's Bhagya?




Mr. Narendra Modi has launched many schemes with 2019 general elections in mind. These schemes are targetted for the poor, they are supposed to impact a large population and they are supposed to finish before March 2019. Saubhagya is one such scheme besides Ujjawala, Ayushman Baharat, and others. The scheme is supposed to provide an electrical connection to three crore unelectrified households before December 2018. Once completed, all households in India will have an electrical connection.

While other schemes suffer from one or other major inadequacies, e.g. Ayushman Bharat does not have enough funds to impact a large population or in the case of Ujjawala, the cost of unsubsidized cylinders offered to the poor is prohibitively costly, the Saubhagya scheme is more or less trouble-free. It is true that in this scheme too, only the connection is free and the electricity provided after the initial connection is unsubsidized, the poor households can consume less electricity based on their financial condition, which is not the case with a scheme like Ujjawala. Thus Saubhagya has been a reasonable success till now and as per its dashboard, out of the three crore households to be electrified under this scheme around 2.2 crore households have been electrified as of today. Since 3 crore households represent at least 10 crore votes, which is almost 20% of around 54 crore votes polled in the 2014 elections, the scheme may boost the position of Mr. Modi in the upcoming elections as his party had polled only 17 crores votes in the last elections. Thus Saubhagya has the potential to become Modi's Bhagya.

So, the important question for the opposition parties is about the actions that they should take given the potential of Saubhagya to catch votes. The opposition parties have the following opportunities in this regard.
  • This scheme is ultimately executed by the state governments and at the local level, they can always project it as their own scheme.
  • This scheme has no impact in the urban areas as they were already 100% electrified before this scheme was launched.
  • In the rural areas too, out of 17.5 crore households, almost 14.5 crores had an electrical connection before the launch of this scheme. Thus 82% of the rural households were already electrified by the time the scheme was launched. The opposition parties can always concentrate on this 82% already electrified households, which were electrified before the launch of Saubhagya.
With regards to the rural electrification, a lot of misinformation is being spread by the current government. Claims are being made that by 2014 only 55% of the rural households were electrified. This is a plain lie. The 55% number has been picked up from the 2011 census, where the "primary source of light" was counted for each household. But, one needs to differentiate between the primary source of light and the electrical connection. A family may have an electrical connection, but Kerosene will be counted as the primary source of light if the electricity is irregular and unavailable in the peak time between 6 pm to 10 pm. It is to be noted that the peak deficit in India has fallen from 10+% in 2010 to less than 2% now, primarily because of the large number of thermal power plants put by the then UPA government. Actually, the peak time deficit had fallen to around 4% by 2013-14 itself, which means that many rural households would have moved from Kerosene to the electricity as the primary source of light between 2011 and 2014 without even getting a new electrical connection. It also needs to be noted that during the UPA time, the BPL households were provided free electrical connection and the number of such households for the ten years of UPA rule was around 2.2 crores. The current government had continued that scheme and that scheme was working till September 2017, when Saubhagya was launched. If one assumes that the current government issued 50 lakh connections to the BPL households before the launch of Saubhagya, then the total number of households electrified by 2014 stands at almost 14 crores or at 75% of all the rural households. This is no small number and points to a large number of households with an electrical connection by 2014. These households might not be swayed by the Saubhagya numbers and may choose to vote on the basis of farmer distress or the prevailing unemployment conditions in the country.

Monday, July 23, 2018

The Rupee At Its Lowest Level

Before the national elections in 2014, the value of the rupee was used as a political tool by the opposition extensively. The valuation of the rupee was discussed at many public events by the top BJP functionaries like the then-aspiring prime ministerial candidate Sri Narendra Modi and the wannabe finance minister Sri Subramanian Swamy as well as the pseudo-BJP supporters like Sri Sri Ravishankar. Sri Modi went on to say that the rupee and the central government are in a competition with each other on who will tumble more. Listen to what he said about the rupee at an event organized by Zee Business in Ahmedabad on 24th July 2013.


In 2012, Mr. Subramanian Swamy went on to predict that in the year 2017, one dollar will be equal to one rupee. 

And Sri Sri Ravishankar went on to say that it is refreshing to know that once Sri Narendra Modi becomes the prime minister of the country, one dollar will be equal to forty rupees. Please see what he tweeted on 20th March 2014, when the 2014 elections were about to start.


All these statements will make one believe that when Narendra Modi will take over as the prime minister of India, he will work towards improving the valuation of the rupee. But, to the contrary, the rupee has been falling continuously against the dollar during his regime. Please see the graph of the rupee against the dollar from the time he became the prime minister of India.


The rupee has moved all the way from fifty-nine, when he took over as the PM of India, to sixty-nine as of 22nd July 2018. That is a fall of almost 17% in a matter of a little over four years. Now, compare that with his statement that the rupee had just fallen by 4% during the 6-year regime of Mr. Vajpayee to raise a hope among the listeners that his performance will also be on the similar lines.

However, we also need to analyze his claim regarding the rupee devaluation during Mr. Vajpayee's regime. Mr. Vajpayee became the prime minister of India on 19th March 1998 and he demitted his office on 22nd May 2004. If one looks at the Trending Economics website, which has the data for the dollar-rupee exchange rate for both these dates, one finds that the dollar-rupee exchange rate was at 39.53 on March 18th, 1998 and it was at 45.18 on 24th May 2004. Thus, it becomes clear that Mr. Modi lied about the value of the rupee for both the start and the end of the tenure of Mr. Vajpayee. It is also clear that the rupee devalued by 14% during the 6-years of Mr. Vajpayee's regime and not 4% as claimed by Mr. Modi. Such lies are commonplace in most of his speeches and he confidently keeps putting wrong data to prove his point. Actually, on a closer analysis of his other speeches as well, it appears that presenting the wrong data with a very nasty remark is his specialty.

Since we know the dollar-rupee exchange rate on the date when Mr. Vajpayee demitted his office and we also know the rupee valuation at the date when Mr. Modi won the elections, we can say that the rupee devalued from 45.18 to 59.42 during the ten years of Dr. Manmohan Singh's regime. This is a devaluation of almost 31.5% for the ten-year regime of Dr. Manmohan Singh.

Given that we know the details of the devaluation of the rupee during all these three prime ministers, it is easy to compare their performances as far as the rupee devaluation is concerned.

Here is how the performances stack up.

Mr. Vajpayee - devaluation CAGR for 6 years - 2.18%
Dr. Manmohan Singh - devaluation CAGR for 10 years - 2.78%
Mr. Narendra Modi - devaluation CAGR for 4 years - 3.65%

It is obvious from the above calculation that Mr. Modi is the worse performer among all the three prime ministers. If we compare the performance of Mr. Modi and Dr. Singh's governments in terms of rupee devaluation CAGR, we get the following graph.



Besides the performance of the Modi government vis-a-vis the rupee valuation, we also need to check one more claim that he makes in the video above. Was the rupee equal to one dollar in 1947?

The rupee was pegged against the British pound from the time of Independence till 1966. The rupee was equal to 1 shilling and 6 pence at that time. This means that one British pound was equal to 13.33 rupees (1 Shilling = 12 Pence and 240 Pence equals 1 British pound).  Also, one needs to note that the value of the rupee never changed against the British pound during this period. The dollar-rupee exchange rate only changed in this period because of the changes in the dollar-pound exchange rate. After the independence, the devaluation of the pound against the dollar happened only in 1949. Until 1949, one British pound was equal to 4.03 dollars as is evident from the graph below.


So, if one divides 13.33 by 4.03, one gets the dollar-rupee exchange rate at the time of independence which is 3.30 rupees. The rupee was never equal to one dollar and even at the time of independence, a dollar was equal to 3.30 rupees. The same information can be seen at multiple places like in the article here.

Thus it becomes obvious that in the span of just one and a half minutes, Mr. Modi told multiple lies to the people and then went on to share the same on the Twitter and other platforms with his nasty remarks. Lying and then sharing it boldly with nasty remarks has been a consistent strategy of Mr. Modi and one needs to be careful about every sentence that he speaks because he may say multiple lies in the same sentence.

Meanwhile, the rupee is at its lowest level against the dollar and Mr. Modi is a far worse performer than his predecessor as far as the valuation of the rupee is concerned. And sadly for Sri Sri Ravishankar, it will not be very refreshing to know that the rupee will soon hit seventy against the dollar.

Wednesday, July 18, 2018

Bullet Trains, Swachch Bharat And The Absence Of Toilets In The Passenger Trains


Recently, Dr. Sreedharan, the Metro Man of India, told the Hindustan Times in an interview that bullet trains are for elites and India needs a modern, clean, safe and fast rail system. Similar sentiments were expressed by Mr. Chidambaram some months back through his tweets.



Since politicians keep blaming each other, much attention was not paid to Mr. Chidambaram's tweet, but a lot of discussions followed the comments of Dr. Sreedharan. A lot of people argued that Mr. Sreedharan is not thinking ahead. They argued that nay-sayers made similar arguments against the launch of the Rajdhani express when it was introduced around fifty years back.

Being a computer engineer by education, I generally favor forward-looking technologies and I was in the agreement with the statements made by the people who were opposing Dr. Sreedharan's views. But someone told me an incident that happened to him recently(2nd July 2018) that made me rethink. The incident brought back the stark realities of the Indian railways and the progress that we have made as a nation in front of me.

So, this person was planning to go to Buxar from Phulwari Sharif along with his friend. Phulwari Sharif is a station in the suburbs of Patna, the capital of the Bihar state. Since no express train stops at Phulwari Sharif, they took a passenger train. The distance is around 100 Km and the time taken is roughly around 3 hours without counting the delays which are commonplace for the passenger trains in this route. Luckily, the train arrived on the time and they boarded it. After almost two hours in the train, the person felt some movement in his bowels. He wanted to return the nature's call. But he realized to his utter surprise that there were no toilets on the train. When he told me this, I too was shocked to hear it. Sadly, even today we are running many trains which run for hours and they have no toilets. Many people like me who live in the cities and are a rare user of trains will not know this reality. Anyways, since there were no toilets on the train, they had no choice but to get down from the train.

Both friends alighted at the Banahi station (six-seven stations before the Buxar station where they wanted to reach). They searched for a toilet on the station. To their utter surprise, they found an extremely dirty toilet on the station without any water facility. Since there was no water in the toilet, they started searching for the water at the station. They were more shocked when they realized that there was no water at the station. Some of you may think that they alighted at a new/small station or a halt. But, let me tell you that I have traveled quite a lot on this route and I know that Banahi station is neither a halt nor a new station. It is a very old station and even existed before I was born. It was shocking to me to hear that there was no water even at this station. Just to reconfirm, I asked him if a hand pump existed on the station. He said to me that there was no hand pump either and there was no other source of water at the station. Since there was no water at the station, he has to come out of the station to relieve himself.

The area outside the station is not very developed and only some small shops exist there. There are no public/paid toilets in the locality. So, they kept moving outside until they found a small pond. Finally, the person relieved himself in the open. So much for the open defecation free India and Swachch Bharat. Now, the next problem was to wash his hands for which he needed fresh water. He walked a little more and after some distance found a hand pump and managed to wash his hands. Then both the friends walked back to the station and caught the next passenger train which was scheduled after two hours and reached their destination three-four hours later than what they had initially planned.

The whole incident begs a serious question. What shall be our priority as a country? Shall we worry about a lakh crore worth of bullet train project and wi-fi for the stations or shall we worry about providing water and sanitation at all the stations and on all the trains? Shouldn't there be a Swachch Bharat campaign to fit toilets in all the trains? Shouldn't there be a drive to provide water at all the stations? The best thing would be to first provide basic necessities at all the stations and trains and then move on to the bullet trains and wi-fi, but when I look at the statements emanating from the government, there is a big rush to do things which can be capitalized as votes and I don't find enough mention of the issues that impact lakhs of people. The general thinking of the govt appears that all the existing issues can be blamed on the previous governments and instead of solving them they want to do something which can be showcased as an achievement. Bullet train appears to be just that.

Dr, Sreedharan, you are right once again like you have been on many occasions earlier. What is also great about you is your ability to take a non-popular but a correct stand. Please take a bow from me.

Thursday, July 23, 2015

जो बीत गई सो बात गई (Jo Beet gayi so baat gayi)


Sometimes a poem can express our thoughts much better than a prose. I love this poem by Harivansh Rai Bachchan and keep using it for clarifying things in discussions. Keeping it in my blog for easy reference. 



जीवन में एक सितारा था
माना वह बेहद प्यारा था
वह डूब गया तो डूब गया
अंबर के आंगन को देखो
कितने इसके तारे टूटे
कितने इसके प्यारे छूटे
जो छूट गए फ़िर कहाँ मिले
पर बोलो टूटे तारों पर
कब अंबर शोक मनाता है
जो बीत गई सो बात गई
जीवन में वह था एक कुसुम
थे उस पर नित्य निछावर तुम
वह सूख गया तो सूख गया
मधुबन की छाती को देखो
सूखी कितनी इसकी कलियाँ
मुरझाईं कितनी वल्लरियाँ
जो मुरझाईं फ़िर कहाँ खिलीं
पर बोलो सूखे फूलों पर
कब मधुबन शोर मचाता है
जो बीत गई सो बात गई
जीवन में मधु का प्याला था
तुमने तन मन दे डाला था
वह टूट गया तो टूट गया
मदिरालय का आंगन देखो
कितने प्याले हिल जाते हैं
गिर मिट्टी में मिल जाते हैं
जो गिरते हैं कब उठते हैं
पर बोलो टूटे प्यालों पर
कब मदिरालय पछताता है
जो बीत गई सो बात गई
मृदु मिट्टी के बने हुए हैं
मधु घट फूटा ही करते हैं
लघु जीवन ले कर आए हैं
प्याले टूटा ही करते हैं
फ़िर भी मदिरालय के अन्दर
मधु के घट हैं,मधु प्याले हैं
जो मादकता के मारे हैं
वे मधु लूटा ही करते हैं
वह कच्चा पीने वाला है
जिसकी ममता घट प्यालों पर
जो सच्चे मधु से जला हुआ
कब रोता है चिल्लाता है
जो बीत गई सो बात गई

Jeevan Main Ek Sitara Tha
Maana Vah Behad Pyara Tha
Vah Doob Gaya To Doob Gaya
Ambar Kay Aanan Ko Dekho
Kitne Iskay Taare Toote
Kitne Iskay Pyare Choote
Jo Choot Gaye Fir Kahan Mile
Par Bolo Toote Taaron Par
Kab Ambar Shok Manata Hai
Jo Beet Gayi So Baat Gayi
Jeevan Main Vah Tha Ek Kusum
They Us Par Nitya Nichavar Tum
Vah Sookh Gaya TO Sookh Gaya
Madhuvan Ki Chaati Ko Dekho
Sookhi Kitni Iski Kaliyan
Murjhaayi Kitni ballriyan
Jo Murjhayi Woh Fir Kahan Khili
Par Bolo Sookhe Phoolon Par
Kab Madhuban Shor Machata hai
Jo Beet Gayi So Bat Gayi
jeevan Main Madhu Ka Pyala Tha
Tumnay Tan Man De Daala Tha
Wah Toot Gaya To Toot Gaya
Madiralya Kay Aangan Ko Dekho
Kitne Pyale Hil Jaate Hain
Gir Mitti Main Mil Jaate Hain
Jo Girte Hain Kab Uthte Hain
Par Bolo Toote Pyalo Par
Kab Madiralaya Pachtata Hai
Jo Beet Gayi So Baat Gayi
Mridu Mitti Kay Hain Bane Hue
Madhu Ghoot Phoota Hi Kartay Hain
Laghu Jeevan Lekar Aaye Hain
Pyale Toota Hi Karte Hain
Fir Bhi Madiralaya Kay Andar
Madhu Kay Ghat Hai Madhu Pyale Hain
Jo Madakta Kay Maare Hain
Vey Madhu Loota Hi Kartay Hain
Va Kachcha Peene Wala Hai
Jiski Mamta Ghat Pyalon Par
Jo Sachchey Madhu Sey Jala Hua
Kab Rota Hai Chillata Hai
Jo Beet Gayi So Baat Gayi

Saturday, March 14, 2015

Rakesh Jhunjhunwala's Real CAGR




I have always wondered about the real CAGR achieved by the big investors. Stories are created and floated in the market to make their achievements look much bigger than what they actually are. Rakesh Jhunjhunwala is unarguably the most successful investor on Dalal Street. I was always interested in knowing his real CAGR. The problem is that the stories created around him make it almost impossible to gauge that. It requires some glimpses into his early years as an investor/trader to know the approximate CAGR achieved by him.

As per the fable, he came to Dalal Street with 5000 Rs in 1985.  And now considering that his net worth is close to 2 billion dollars(12000 crores), the CAGR achieved will be closer to 77%. For a 30 year period, achieving a 77% CAGR looks almost impossible, and I never bought into the story.

Recently, RJ was interviewed by Ramesh Damani and N. Jaikumar (of Prime Securities fame in which I successfully managed to lose two thirds of my original capital in 2008 in just 3 months. Sometimes, I will write a blog on phony, nice sounding, TV-appearing people and their investment (mis)achievements but for time being let us focus on their interview). A good portion of the interview was spent around the early years of RJ in Dalal Street. Some facts were stated about his early years, which make his story much more clearer to us. As per the story, even though RJ came to Dalal Street with 5000 Rs in 1985, in 1986 he made 25 lakhs. This is a very very important fact and takes us much closer to the real achievements of RJ.

Being investors in the market for long, we all know that by no means one can convert 5000 Rs. to 25 lakhs in a single year. So, assuming that RJ started his investing journey with 5000 Rs is either false or only partially true. At least, the fact that RJ started his investment journey with only 5000 Rs should not be interpreted as "he had only 5000 Rs and all his net worth was created out of these 5000 Rs by investing them in the stock market" as most of us do. Based on the facts stated by him, it is highly likely that he had at least 10 lakh Rs to invest (assuming that his networth jumped by 3.5 times (highly optimistic) in the first year). So, a much more realistic scenario is that RJ started his investing journey with 10 lakh Rs in 1985 and now in 2015 he has 12,000 crores. This is a CAGR of close to 48%, which is great by all standards but much more realistic.

The other way to calculate his CAGR will be to ignore the first year and go by the fact stated by him about his networth in 1986. So, if we remove the first year and start from 1986, his networth has jumped from 25 lakhs to 12,000 crores in 29 years. That will still be closer to 45%. So, based on all the realistic facts, RJ has achieved a CAGR of 45-50% for 30 years. That is a great achievement, but not very unrealistic. All of us can target for it, and probably many of us will be closer to that for a shorter period of time.

The most important lesson of this fact is as follows. "If one can compound his networth at 45% for a 30 year period, he can easily become a billionaire starting from a modest sum of 10 lakhs". Another important fact that we should not ignore is the drop in CAGR rates with the increase in the corpus size. So, in the same interview, RJ mentions that his networth was 20 crores in 1990. That is an increase of almost 100 times in the first 4 years of operation. That will put his CAGR for first 4 years at 200+%, which is truly remarkable. But this also points to the fact that RJ has achieved only 30% CAGR since 1990 which is remarkable but not very far from what many investors have achieved on Dalal street for a shorter period of time with smaller corpus sizes.

Based on all these facts, it appears that RJ's journey has been great but not an impossible one. Many of us can try to emulate his journey and hope to do equally well.

Please find the link to the interview below.

http://www.moneycontrol.com/news/market-outlook/grab-opportunities-buy-first-research-_1329409.html