Rajendra Pratap Gupta
The satyam saga is not as simple as people believe . My personal view is, that it happened due to the political comfort Raju enjoyed with all the powers that are at play. More specifically , all the A.P. Governments be it of CBN or YSR..
I am sure that, this dirty trail will pull out many political skeletons. And if this is bound to happen, Raju’s life might be in danger . No A.P. politician would like to be named when elections are just a few weeks away. I fear that Raju might be eliminated in the name of a heart attack
The center must interrogate , investigate and keep the custody of Raju out of Andhra . But as we know, that our courageous politicians , corrupt agencies working under political influence and control, inefficient judiciary and biased press will not let the truth be out for the common man. That is what is called the CMP – Common Minimum Programme !!
Government has given mobilizing advance to Maytas infra. What steps have been taken to build safeguards for the two thousand Crores given as mobilising advance ? It is well understood that government has a cut in every such deal. Rajiv Gandhi once said that, out of every rupee meant for poor , 15 paisa reaches the poor. In ( political – business ) deals , poor are our politicians and they demand much more than 15 paisa out of every rupee in the name of the party and themselves – They have no shame – Remember Bangaru Laxman ?. How come suddenly a news paper cartoonist like Bal Thackeray and his entire clan run deals worth hundreds of Crores !! A poor man when becomes a saviour of the poor ( read politician ) suddenly becomes rich ?? I recall a quote- A Politician is one, who extracts votes and money from the rich and poor on the pretext of protecting each from the other !!
A few days back, I was talking to one of my friends who has access to the powers at the center. I was shocked to learn , that planning commission does not issue money to the states till there is a guarantee for the portion of the money being returned for fighting elections. If the grapevine is to be believed , this amount per state runs into thousand crore plus !!! That’s why when you complain about corruption , no one listens, as all the powers are deeply involved into it either at the front end or at the backend . Corruption is the politician’s only religion . Corruption is a trickling down process and is like rain water . It comes from the top and not the other way round !
While a lot of people are looking at bringing about a change in the governance of the nation . But trust me , it will not happen soon. Reason is, that there are only less than 5 percent of people who read and get frustrated about the current state of affairs ; unfortunately, they don’t even vote . So frustration alone will not change this system.. Rest 95 percent are victims and partners by force to such an ‘illegal democratic System’. The corruption is “institutionalised business” to such an extent that you and i cannot imagine as honest individuals . A Member of parliament. has to pay for becoming an M.P. then he has to collect the same money ( with returns ) from business houses, IAS & IPS officers in the name of getting things done !! A low level clerk or the hawaldaar / constable has to be pay for his posting and lucrative transfer . At the end , i and you have to pay for all this as bribe. This is my definition of the current democracy – a totally manipulated system by the politicians , for the influential at the cost of the common man.
Those of us who think that we can change it by mere lighting a candle or filing an PIL. Just go and check how many election commissioners , retired judges that have given favourable judgements are in plum postings post retirement ? why did Chief Election Commissioner T.N.Sesan not become a Union minister and Mr.Gill become a union minister ? Why do IPS officers , Judges become governors of states after retirement ? Many such cases exists. Just peep into the past. You might have all answers. Why does the CBI need a permission from the government for prosecuting the officers or M.P.’s ? Simply to delay and bid time . Anyways, an average Indian is so lost in daily chores that he/she doesn’t have time to get ‘involved’ in ‘such issues’ . Votes that the ‘intellectuals’ like us give does not exceed 3 % .Mostly, we don’t even go to vote. Majority of the people who vote for these corrupt politicians decide not on the basis of good governance, but whether his wives get a saree and the family gets a sumptuous meal a few days till the voting day. These are the 600 million innocent and exploited people who for almost next five years after elections will go to bed empty stomach every day. They cannot practice our principles ! And the politicians don’t wish them to prosper . If these 600 million people prosper and come out of poverty, corrupt people like Lalu Yadav, Shibo Soren, Mulayam Singh , Amar Singh, Sharad Pawar and many more would not be rubbing shoulders with Sonia or Manmohan or dreaming to be union ministers !! We all know why Ashwariya got the Padmshri award ? Simply because Amar and his gang have bailed out the congress ? Rahul Gandhi and Sonia Gandhi talk about democracy in the nation . If Rahul was not Gandhi would he become the Gen.Secy of the congress so soon ? When the party itself is against democracy and decides the top posts based on sycophancy , favouritism and dictatorship how can it guarantee democracy to the nation ? Why are we getting fooled. I would go to an extent of writing that Manmohan would have been forced for the cardiac surgery . So that if by chance , Congress comes to power. On health grounds , Manmohan can be retired and Rahul can step in to lead the nation to disaster ! Anyways, the Gandhi dynasty has ruled the nation for 90 % of the time since Independence . Earlier , they can be credited with ‘license raj’ and now ‘quota raj’ . Both the steps led them to manipulate and come to power but weakened he nation and divided it . We have gone backward than becoming developed . Elections have never been fought for good governance . It has been fought to stay in power. The priorities are misplaced totally. Last five years into power they had all to develop an indigenous growth model for India . But they went on to build a dollar based economy and gave us recession to live with . What a colossal failure for Sonia , Manmohan and PC !!
Don’t expect the system to change soon . A new cult has to come up from the youth , specially women who will have to lead another mass movement to make it happen. And it cannot happen if you read this and still decide to sit back and go into thinking mode.
We must get up to action .
Rajendra Pratap Gupta
President
Countryfirst
Email: mail@rajendragupta.org
rajendra.india@gmail.com
Thursday, January 29, 2009
Sunday, January 18, 2009
Global Recession- An opportunity for India to course correct
January 16th, 2009
Dr. Manmohan Singh
Prime Minister &
Minister for Finance
Government of India
New Delhi
Subject: Economic policies and the current turmoil- Recommendations
Dear Dr.Singh,
I am writing this letter to draw your attention to the issues affecting the nation and some practical solutions
On the outset, I wish to place it on record that I am neither a world renowned Economist nor a Nobel Laureate but have spend 12 successful years at the helm of many corporate companies more so because of my approach rather than some other qualification. As an ever lasting student of the corporate world, my focus has been on constant innovations and prioritizations in order to simplify complex situations and search for practical, achievable and sustainable solutions. The spirit and essence of this communiqué flow from these thoughts.
and trust me, if you follow my advice, we can certainly come out of the recession faster and emerge stronger. There are lessons to be learned to make India stronger
Let me clear you that India is in a recession and that we are headed for a severe recession if we don’t take immediate steps. I wish to quote you the following data to enlighten you about the same.
• Exports :According to the President ,Federation of Indian Export Organizations ( FIEO), Mr.A.Sakthvel, 2009 is going to be the worst year in history and the Indian Exporters may cut 10 million jobs by March as the orders are drying up
• Slow down in the leather industry is likely to axe 5 lakh workers in leather units in the next three to four months with worsening market scenario in US and Europe . The industry employs almost 2.5 million people. Ref: The Economic Times dated Jan 2009.
• Tax Collections :The Tax collections for December quarter dropped by 22 % ( Ref: The Economic Times dated 27th Dec 2008 )
• Corporate - Domestic slowdown Net profit of India Inc. likely to decline by almost 46 % in the 3rd Quarter of third fiscal .Ref: The Economic Times dated 28th Dec 08.
• The private sector abandoned projects worth 44 billion in the third quarter of 2008
• Insurance Sector April to Nov 08 , the insurer’s first premium income and number of policies sold were down by 14 % - Ref : The Economic Times dated 3rd Jan 2009
• Banking SectorFor a leading private bank , between Nov and Dec 08 the credit card delinquency increased to 26 %
• The gross NPA’s of banks will reach 4.7 % of the total loans in FY10 from the current of 2.3 %. Credit card delinquency has gone up to as high as 14 %. Loan defaults would follow shortly and this will be a big blow to the banking / loan system. In the first half of Dec 2008, in Bangalore itself there have been defaults to the tune of Rs.80.23 crore at Corporation Bank . Out of the total home loan portfolio exposure of Rs.1000 cr , 50 % is in the IT sector. Defaults will start increase going forward. We will see the real impact in April 09.
• Aviation Sector Jet airways and Jet lite have defaulted in payments of Rs. 32.78 Cr to AAI TOI 29th Dec 08. Airline industry is expected be in deep red this year
• Hospitality Sector The hotel occupancy has dropped by 50 %. Ref : The Economic Times dated 28th Dec 2008
• Diamond Sector 60 % of the 8000 units into diamond polishing and cutting business went on forced holiday leaving 100,000 people without jobs. (Times of India 27th Dec 2008). There is a 40 % reduction in demand according to Gems and Jewellery Promotion Council (GJEPC). Exports account for $ 20 billion in the industry. Ref: The Economic Times dated 28th Dec 2008
• Auto & transport Sector Approx 90 % of all the commercial vehicles sold in India is via loans. Kotak Mahindra Bank has repossessed about 200 vehicles. Deepak Sachdeva, President of the Delhi Goods Transport association said that between April and Dec alone, close to 158000 commercial vehicles were either surrendered or repossessed due to loan defaults. Ref The Mint – Wall street Journal dated Dec 26th 2008
• IT sector is likely to lay off 50,000 people in the next 6 months. Already layoffs are happening across sectors
Let’s look back as to why we have had a problem ? We built an economy on dollars, FDI and stock market and not on 600 million people who live on 2.5 USD a day. We have tried to compete with China or serve the developed world. The outsourcing business is not build on merits other than low costs of human capital. We don’t have a lasting story if we bank on cheap labour only!! We need to capitalize on our resources internally and not become a body shopping country. But till now, we have let others capitalize on our strengths. You will have to change this. Common minimum programme has to be Common man’s programme
India has always been a land of ‘Rishi’ and ‘Krishi’. We forgot this aspect of India. We still have not done much for the farmers of this nation. We know for sure that 18 % of the GDP (agriculture) supports 60 % of the population. Kamal Nath believes that this might not be possible. I must correct him. What we need is value addition to agriculture and connecting the value chain of agriculture business to farmers at the place of produce. We need to think more about farmers producing cash crops besides staple crop. We need to increase the value of 18 %. We must note that 80 % farms in India are smaller than 5 acres. From 1971-96, the average size of the farms has reduced from 2.3 to 1.4 acres. Whilst, in the developing countries the average farm size has decreased, same has increased in developed world.
Having given the above mentioned data let me inform you that in abnormally tough times you cannot take routine decisions. Baby steps would not help. Severe crisis needs several big interventions. You need to take drastic steps. Some of which i am putting for your immediate consideration
Just lowering the interest rate or some small duty cuts would not raise the morale of the countrymen. This is a crisis of comfort and confidence both. You are testing waters by lowering the rates in monthly reviews and at intervals. Not realising that that these SOPS in instalments are deteriorating the economy and the morale of the people is suffering as time is passing. We are drifting in the ‘quick sand of recession’. Please consider, people do not buy because a particular product or service is cheap. But the buying decision is dependent on certainty of income and availability of cheap capital coupled with host of other social and market factors. Seeing what is happening in the country, i don’t see a positive mood till you take drastic steps like,
1. Replace the portfolio of Minister of Finance with the Minister for economic development
2. Have a dedicated secretariat to monitor the economic indicators and look to prevent surprises and signal disasters much in advance- in short to do a overall risk assessment across sectors in the economy. They should have no other job than to forecast and warn against the impending threats to the economic growth
3. Have a dedicated minister for modern agriculture practices
4. Dedicate a separate ministries for each innovation ,poverty alleviation and PPP- Public Private partnerships . PPP must be encouraged in all sectors
5. Economic policies should be more inward looking than foreign dependent
6. Tax rates must be reduced for individuals in one go and in a massive manner and not in instalments
7. Fuel rates should be reduced immediately and be made market driven
8. We need to focus and take immediate steps for setting up Agri and processed foods SEZ on an urgent basis.
9. Announce incentives for organic farming.
10. Announce incentives for tourism
11. Government must give big push to vocational training and employment for students
12. Increase recruitment for teachers , police and other government staff
13. Scholarships for education and R&D must be given
14. Lower the bank interest rates for corporate lending to around 9 % at one go.
15. Home loan rates be immediately reduced to 7.5 % for amount up to Rs. 5 lac, 8 % above 5 Lac till 20 Lac, 8.5 % for amount above Rs. 20 lac till Rs.50 Lac and 9 % for amounts above Rs. 50 Lac. The customers must be allowed to get these at fixed rates and not floating rates for a period of 20 years. Construction boom will increase activity in a lot of infrastructure industries like construction workers, cement, iron and steel and paints etc. which will add to the economy in a big way. All these must be lowered in one go rather in instalments
16. While you give incentives to the infrastructure , you must appoint a housing regulator to bring in confidence of a fair play amongst the investors
17. Government must build houses for weakest sections of the society to be leased on rentals and not be sold
18. Banks must be mandated for giving loans to students for vocational courses without any guarantor .This will lead to enhancement of skills and employment and the loan amounts will be small. Plus the bank will secure the loans as the students cannot get the job without clearance from banks !! So safer loans. People can earn and pay along
19. IT sector must focus on agriculture sector & education– This one step will take India to a better placed economy
20. Big corporates must be mandated to outsource 2.5 % of their requirement to SSI (Small scale industries).
21. Encourage Small scale industries and incentivise them by making them tax free for 3 years
22. SSI based SEZ must be considered for every state
23. Agriculture and food processing SEZ must be established near ports and in every state
24. Don’t transform Mumbai to Shanghai. Create more Mumbai’s in India. Have realistic goals
25. Remove bureaucratic hurdles to set up small businesses like removing multiple approvals. Let it be a single window clearance for setting up a shop or small business
We must be focussed on servicing our population and not be dependent on globalization. We have learned now that building an economy based on just FDI will not be a stable economy. We need to learn a lesson from the BJP’s Swadeshi strategy. Albeit in a different manner. Let the financing be local and focus on intrinsic industries. Agriculture, and SSI is good enough to give stable growth to the economy
Unchecked capitalism has failed in USA . Now America is fast moving towards being a socialistic economy – American government is funding and buying into big defaulting and bankrupt corporations thus socialising the economy. It is clear that you can’t build a great economy on capitalist lines. I have my serious doubts on Barack being able to revive US capitalist economy. In India, we have only four five major corporates in a land of a billion people. This indicates that the policies of the government have favoured or controlled by a privileged few !! This needs to be changed immediately. Encourage entrepreneurship and SSI in an institutionalised manner and support them.
Give a push to communication, Infrastructure, healthcare, education and PPP to grow India to the next level. Have a robust pension system and a culture of long term investments and savings. This is critical to avoiding America like defaults and disaster
I must also take you through the US failure and where it might head for. The failure of America is due to lack of culture of savings and greedy & unnatural growth strategies. It is the start of the historical shift of power equation. Historically, Greek & Roman empires dominated the world. Then came the turn of Britain that controlled the world , It shifted the power equation to USSR & USA. Now it is the USA. Future undoubtedly is of China. If you care to correct the situation with drastic measures, India will be back in to glory by the year 2020 as the world’s top most power.
We have faltered due to our myopic policies. You have the opportunity to change this nation’s future by taking appropriate measures or get caught in the web of political compulsions or electoral policies. Needless to mention, peace is a precondition to progress.
See the date of different states, this tells us a lot. I have arranged in ascending order w.r.t. population
S. No State Population Per capita net state domestic product in INR No. of M.P.’s
Lok Sabha No. of M.P’s Rajya Sabha No. of Assembly seats
1 Lakshadweep 60650 N.A. 1
2 Daman & Diu 1.58 Lac NA 1
3 Dadra & Nagar Haveli 2.2 Lac N.A. 1
4 Andaman & Nicobar 3.56 Lac 28340 ( 2002-3) 1
5 Sikkim 5.4 Lac 21586 (2003-4) 1 1 32
6 Mizoram 8.88 Lac 22207 (2002-3) 1 1 40
7 Chandigarh 9 Lac 57621 (2003-4) 1
8 Poducherry 9.74 Lac 50936 (2003-4) 1 1 30
9 Arunachal Pradesh 11 Lac 17393 ( 2003-4) 2 1 60
10 Goa 13.47 Lac 53092 (2002-3) 2 1 40
11 Nagaland 19 Lac 18911 (2001-2) 1 1 60
12 Manipur 21.66 Lac 14766 (2003-4) 2 1 60
13 Meghalaya 23.18 Lac 18135 (2003-4) 2 1 60
14 Jharkhand 26.9 Lac 12509 (2003-4) 14 6 81
15 Tripura 31 Lac 18676 (2002-3) 2 1 60
16 Himachal Pradesh 60 Lac 24903 (2003-4) 4 3 68
17 Uttaranchal 84 Lac 13260 (2001-2) 5 3 70
18 J&K 1 Crore 13320 ( 2001-2) 6 4 87
19 Delhi 1.38 Crore 51.664 (2003-4) 7 3 70
20 Chhattisgarh 2.0 Crore 14863 ( 2003-4) 11 5 90
21 Haryana 2.11 Crore 29963 ( 2003-4) 9 5 90
22 Punjab 2.4 Crore 27851 (2003-4) 13 7 117
23 Assam 2.65 Crore 13139 ( 2003-4) 14 7 126
24 Kerala 3.18 Crore 24492 ( 2003-4) 19 9 140
25 Orissa 3.68 Crore 12388 (2003-4) 21 10 147
26 Gujarat 5 Crore 26979 ( 2003-4) 26 11 182
27 Karnataka 5.28 Crore 21696 (2003-4) 28 12 225
28 Rajasthan 5.60 Crore 15486 (2003-4) 25 10 200
29 M.P. 6 Crore 14011 (2003-4) 29 11 230
30 Tamilnadu 6.2 Crore 23358 (2003-4) 39 18 234
31 Andhra Pradesh 7.6 Crore 20,757 (2003-4) 42 18 295
32 West Bengal 8 Crore 20896 (2003-4) 42 16 294
33 Bihar 8.29 Crore 5780 ( 2003-4) 40 16 243
34 Maharashtra 9.68 Crore 29204 (2003-4) 47 19 288
35 Uttar Pradesh 16.61 Crore 10817 (2003-4) 80 31 403
I must also advice that you convince your colleagues on increasing the salary of M.P.’s, and this is one thing that they might or might not agree. 545 Member of parliaments run this country. Let them have the best salaries. I will recommend for them salaries starting Rs.2.5 Crores with a larger bonus on performance. Reasonable cause for this high salary is that;
1. We will get the best brains drawn to politics
2. Public will not let incompetent people to be elected to such ‘high paying offices’ and public outcry will question non performance for the high salaries
3. Bribes ‘might’ stop
4. People taking such salaries will have guilt if they did not deliver (at least we can hope so !!).
Recently, I interviewed more than 100 students of a top internationally renowned management institution at Mumbai and was both happy and felt at a loss. I am glad that we have a logical and a responsible youth contrary to media perception. But i felt sorry that, they are lacking proper guidance and so they are disillusioned. We must unleash the power of youth, more so, of women power. Then only we will begin a new era of growth.
Recession is equally big an opportunity as robust economic growth.
Economic Forecast for 2009: If the Indian economy grew at 8 -9 % in 2007-8. I must believe that, about half of this came due to intrinsic or local market factors that is about 4 to 4.5 % . So we will continue with that growth with some downward slide in 2009, and also that the remaining half was due to foreign or extrinsic factors. Which i believe, will reduce by a good 50 % . So intrinsic or internal growth will contribute between 3.5 to 4.5 % and remaining 2- 2.5 % will come from the extrinsic factors. So in all , i guess this year we will witness growth somewhere around 6.0 to 7.0 %. If the World economies shrink badly , which is expected, this might impact this growth a little more and bring it down well under 6.0 %
You will not be remembered for how you managed the crisis of the 90’s but how you manage 09. That time, we were alone in the crisis and compulsions left with you with only one option. Now it is a Global crisis . Only intelligent and effective leadership can work. I see so many opportunities and endless possibilities. Hope see that as well. Good Luck !
Dr.Singh, we cannot drive our car looking at other cars rear view mirror. We must drive our car from within and people cannot steer it from outside. This has a message for you. Look inside and drive India to glory, out of recession
I hope i have made a point
Best regards
Rajendra Pratap Gupta
President
Country First
Email: rajendra.india@gmail.com
Mobile: 09323109456 / 9867300045
Dr. Manmohan Singh
Prime Minister &
Minister for Finance
Government of India
New Delhi
Subject: Economic policies and the current turmoil- Recommendations
Dear Dr.Singh,
I am writing this letter to draw your attention to the issues affecting the nation and some practical solutions
On the outset, I wish to place it on record that I am neither a world renowned Economist nor a Nobel Laureate but have spend 12 successful years at the helm of many corporate companies more so because of my approach rather than some other qualification. As an ever lasting student of the corporate world, my focus has been on constant innovations and prioritizations in order to simplify complex situations and search for practical, achievable and sustainable solutions. The spirit and essence of this communiqué flow from these thoughts.
and trust me, if you follow my advice, we can certainly come out of the recession faster and emerge stronger. There are lessons to be learned to make India stronger
Let me clear you that India is in a recession and that we are headed for a severe recession if we don’t take immediate steps. I wish to quote you the following data to enlighten you about the same.
• Exports :According to the President ,Federation of Indian Export Organizations ( FIEO), Mr.A.Sakthvel, 2009 is going to be the worst year in history and the Indian Exporters may cut 10 million jobs by March as the orders are drying up
• Slow down in the leather industry is likely to axe 5 lakh workers in leather units in the next three to four months with worsening market scenario in US and Europe . The industry employs almost 2.5 million people. Ref: The Economic Times dated Jan 2009.
• Tax Collections :The Tax collections for December quarter dropped by 22 % ( Ref: The Economic Times dated 27th Dec 2008 )
• Corporate - Domestic slowdown Net profit of India Inc. likely to decline by almost 46 % in the 3rd Quarter of third fiscal .Ref: The Economic Times dated 28th Dec 08.
• The private sector abandoned projects worth 44 billion in the third quarter of 2008
• Insurance Sector April to Nov 08 , the insurer’s first premium income and number of policies sold were down by 14 % - Ref : The Economic Times dated 3rd Jan 2009
• Banking SectorFor a leading private bank , between Nov and Dec 08 the credit card delinquency increased to 26 %
• The gross NPA’s of banks will reach 4.7 % of the total loans in FY10 from the current of 2.3 %. Credit card delinquency has gone up to as high as 14 %. Loan defaults would follow shortly and this will be a big blow to the banking / loan system. In the first half of Dec 2008, in Bangalore itself there have been defaults to the tune of Rs.80.23 crore at Corporation Bank . Out of the total home loan portfolio exposure of Rs.1000 cr , 50 % is in the IT sector. Defaults will start increase going forward. We will see the real impact in April 09.
• Aviation Sector Jet airways and Jet lite have defaulted in payments of Rs. 32.78 Cr to AAI TOI 29th Dec 08. Airline industry is expected be in deep red this year
• Hospitality Sector The hotel occupancy has dropped by 50 %. Ref : The Economic Times dated 28th Dec 2008
• Diamond Sector 60 % of the 8000 units into diamond polishing and cutting business went on forced holiday leaving 100,000 people without jobs. (Times of India 27th Dec 2008). There is a 40 % reduction in demand according to Gems and Jewellery Promotion Council (GJEPC). Exports account for $ 20 billion in the industry. Ref: The Economic Times dated 28th Dec 2008
• Auto & transport Sector Approx 90 % of all the commercial vehicles sold in India is via loans. Kotak Mahindra Bank has repossessed about 200 vehicles. Deepak Sachdeva, President of the Delhi Goods Transport association said that between April and Dec alone, close to 158000 commercial vehicles were either surrendered or repossessed due to loan defaults. Ref The Mint – Wall street Journal dated Dec 26th 2008
• IT sector is likely to lay off 50,000 people in the next 6 months. Already layoffs are happening across sectors
Let’s look back as to why we have had a problem ? We built an economy on dollars, FDI and stock market and not on 600 million people who live on 2.5 USD a day. We have tried to compete with China or serve the developed world. The outsourcing business is not build on merits other than low costs of human capital. We don’t have a lasting story if we bank on cheap labour only!! We need to capitalize on our resources internally and not become a body shopping country. But till now, we have let others capitalize on our strengths. You will have to change this. Common minimum programme has to be Common man’s programme
India has always been a land of ‘Rishi’ and ‘Krishi’. We forgot this aspect of India. We still have not done much for the farmers of this nation. We know for sure that 18 % of the GDP (agriculture) supports 60 % of the population. Kamal Nath believes that this might not be possible. I must correct him. What we need is value addition to agriculture and connecting the value chain of agriculture business to farmers at the place of produce. We need to think more about farmers producing cash crops besides staple crop. We need to increase the value of 18 %. We must note that 80 % farms in India are smaller than 5 acres. From 1971-96, the average size of the farms has reduced from 2.3 to 1.4 acres. Whilst, in the developing countries the average farm size has decreased, same has increased in developed world.
Having given the above mentioned data let me inform you that in abnormally tough times you cannot take routine decisions. Baby steps would not help. Severe crisis needs several big interventions. You need to take drastic steps. Some of which i am putting for your immediate consideration
Just lowering the interest rate or some small duty cuts would not raise the morale of the countrymen. This is a crisis of comfort and confidence both. You are testing waters by lowering the rates in monthly reviews and at intervals. Not realising that that these SOPS in instalments are deteriorating the economy and the morale of the people is suffering as time is passing. We are drifting in the ‘quick sand of recession’. Please consider, people do not buy because a particular product or service is cheap. But the buying decision is dependent on certainty of income and availability of cheap capital coupled with host of other social and market factors. Seeing what is happening in the country, i don’t see a positive mood till you take drastic steps like,
1. Replace the portfolio of Minister of Finance with the Minister for economic development
2. Have a dedicated secretariat to monitor the economic indicators and look to prevent surprises and signal disasters much in advance- in short to do a overall risk assessment across sectors in the economy. They should have no other job than to forecast and warn against the impending threats to the economic growth
3. Have a dedicated minister for modern agriculture practices
4. Dedicate a separate ministries for each innovation ,poverty alleviation and PPP- Public Private partnerships . PPP must be encouraged in all sectors
5. Economic policies should be more inward looking than foreign dependent
6. Tax rates must be reduced for individuals in one go and in a massive manner and not in instalments
7. Fuel rates should be reduced immediately and be made market driven
8. We need to focus and take immediate steps for setting up Agri and processed foods SEZ on an urgent basis.
9. Announce incentives for organic farming.
10. Announce incentives for tourism
11. Government must give big push to vocational training and employment for students
12. Increase recruitment for teachers , police and other government staff
13. Scholarships for education and R&D must be given
14. Lower the bank interest rates for corporate lending to around 9 % at one go.
15. Home loan rates be immediately reduced to 7.5 % for amount up to Rs. 5 lac, 8 % above 5 Lac till 20 Lac, 8.5 % for amount above Rs. 20 lac till Rs.50 Lac and 9 % for amounts above Rs. 50 Lac. The customers must be allowed to get these at fixed rates and not floating rates for a period of 20 years. Construction boom will increase activity in a lot of infrastructure industries like construction workers, cement, iron and steel and paints etc. which will add to the economy in a big way. All these must be lowered in one go rather in instalments
16. While you give incentives to the infrastructure , you must appoint a housing regulator to bring in confidence of a fair play amongst the investors
17. Government must build houses for weakest sections of the society to be leased on rentals and not be sold
18. Banks must be mandated for giving loans to students for vocational courses without any guarantor .This will lead to enhancement of skills and employment and the loan amounts will be small. Plus the bank will secure the loans as the students cannot get the job without clearance from banks !! So safer loans. People can earn and pay along
19. IT sector must focus on agriculture sector & education– This one step will take India to a better placed economy
20. Big corporates must be mandated to outsource 2.5 % of their requirement to SSI (Small scale industries).
21. Encourage Small scale industries and incentivise them by making them tax free for 3 years
22. SSI based SEZ must be considered for every state
23. Agriculture and food processing SEZ must be established near ports and in every state
24. Don’t transform Mumbai to Shanghai. Create more Mumbai’s in India. Have realistic goals
25. Remove bureaucratic hurdles to set up small businesses like removing multiple approvals. Let it be a single window clearance for setting up a shop or small business
We must be focussed on servicing our population and not be dependent on globalization. We have learned now that building an economy based on just FDI will not be a stable economy. We need to learn a lesson from the BJP’s Swadeshi strategy. Albeit in a different manner. Let the financing be local and focus on intrinsic industries. Agriculture, and SSI is good enough to give stable growth to the economy
Unchecked capitalism has failed in USA . Now America is fast moving towards being a socialistic economy – American government is funding and buying into big defaulting and bankrupt corporations thus socialising the economy. It is clear that you can’t build a great economy on capitalist lines. I have my serious doubts on Barack being able to revive US capitalist economy. In India, we have only four five major corporates in a land of a billion people. This indicates that the policies of the government have favoured or controlled by a privileged few !! This needs to be changed immediately. Encourage entrepreneurship and SSI in an institutionalised manner and support them.
Give a push to communication, Infrastructure, healthcare, education and PPP to grow India to the next level. Have a robust pension system and a culture of long term investments and savings. This is critical to avoiding America like defaults and disaster
I must also take you through the US failure and where it might head for. The failure of America is due to lack of culture of savings and greedy & unnatural growth strategies. It is the start of the historical shift of power equation. Historically, Greek & Roman empires dominated the world. Then came the turn of Britain that controlled the world , It shifted the power equation to USSR & USA. Now it is the USA. Future undoubtedly is of China. If you care to correct the situation with drastic measures, India will be back in to glory by the year 2020 as the world’s top most power.
We have faltered due to our myopic policies. You have the opportunity to change this nation’s future by taking appropriate measures or get caught in the web of political compulsions or electoral policies. Needless to mention, peace is a precondition to progress.
See the date of different states, this tells us a lot. I have arranged in ascending order w.r.t. population
S. No State Population Per capita net state domestic product in INR No. of M.P.’s
Lok Sabha No. of M.P’s Rajya Sabha No. of Assembly seats
1 Lakshadweep 60650 N.A. 1
2 Daman & Diu 1.58 Lac NA 1
3 Dadra & Nagar Haveli 2.2 Lac N.A. 1
4 Andaman & Nicobar 3.56 Lac 28340 ( 2002-3) 1
5 Sikkim 5.4 Lac 21586 (2003-4) 1 1 32
6 Mizoram 8.88 Lac 22207 (2002-3) 1 1 40
7 Chandigarh 9 Lac 57621 (2003-4) 1
8 Poducherry 9.74 Lac 50936 (2003-4) 1 1 30
9 Arunachal Pradesh 11 Lac 17393 ( 2003-4) 2 1 60
10 Goa 13.47 Lac 53092 (2002-3) 2 1 40
11 Nagaland 19 Lac 18911 (2001-2) 1 1 60
12 Manipur 21.66 Lac 14766 (2003-4) 2 1 60
13 Meghalaya 23.18 Lac 18135 (2003-4) 2 1 60
14 Jharkhand 26.9 Lac 12509 (2003-4) 14 6 81
15 Tripura 31 Lac 18676 (2002-3) 2 1 60
16 Himachal Pradesh 60 Lac 24903 (2003-4) 4 3 68
17 Uttaranchal 84 Lac 13260 (2001-2) 5 3 70
18 J&K 1 Crore 13320 ( 2001-2) 6 4 87
19 Delhi 1.38 Crore 51.664 (2003-4) 7 3 70
20 Chhattisgarh 2.0 Crore 14863 ( 2003-4) 11 5 90
21 Haryana 2.11 Crore 29963 ( 2003-4) 9 5 90
22 Punjab 2.4 Crore 27851 (2003-4) 13 7 117
23 Assam 2.65 Crore 13139 ( 2003-4) 14 7 126
24 Kerala 3.18 Crore 24492 ( 2003-4) 19 9 140
25 Orissa 3.68 Crore 12388 (2003-4) 21 10 147
26 Gujarat 5 Crore 26979 ( 2003-4) 26 11 182
27 Karnataka 5.28 Crore 21696 (2003-4) 28 12 225
28 Rajasthan 5.60 Crore 15486 (2003-4) 25 10 200
29 M.P. 6 Crore 14011 (2003-4) 29 11 230
30 Tamilnadu 6.2 Crore 23358 (2003-4) 39 18 234
31 Andhra Pradesh 7.6 Crore 20,757 (2003-4) 42 18 295
32 West Bengal 8 Crore 20896 (2003-4) 42 16 294
33 Bihar 8.29 Crore 5780 ( 2003-4) 40 16 243
34 Maharashtra 9.68 Crore 29204 (2003-4) 47 19 288
35 Uttar Pradesh 16.61 Crore 10817 (2003-4) 80 31 403
I must also advice that you convince your colleagues on increasing the salary of M.P.’s, and this is one thing that they might or might not agree. 545 Member of parliaments run this country. Let them have the best salaries. I will recommend for them salaries starting Rs.2.5 Crores with a larger bonus on performance. Reasonable cause for this high salary is that;
1. We will get the best brains drawn to politics
2. Public will not let incompetent people to be elected to such ‘high paying offices’ and public outcry will question non performance for the high salaries
3. Bribes ‘might’ stop
4. People taking such salaries will have guilt if they did not deliver (at least we can hope so !!).
Recently, I interviewed more than 100 students of a top internationally renowned management institution at Mumbai and was both happy and felt at a loss. I am glad that we have a logical and a responsible youth contrary to media perception. But i felt sorry that, they are lacking proper guidance and so they are disillusioned. We must unleash the power of youth, more so, of women power. Then only we will begin a new era of growth.
Recession is equally big an opportunity as robust economic growth.
Economic Forecast for 2009: If the Indian economy grew at 8 -9 % in 2007-8. I must believe that, about half of this came due to intrinsic or local market factors that is about 4 to 4.5 % . So we will continue with that growth with some downward slide in 2009, and also that the remaining half was due to foreign or extrinsic factors. Which i believe, will reduce by a good 50 % . So intrinsic or internal growth will contribute between 3.5 to 4.5 % and remaining 2- 2.5 % will come from the extrinsic factors. So in all , i guess this year we will witness growth somewhere around 6.0 to 7.0 %. If the World economies shrink badly , which is expected, this might impact this growth a little more and bring it down well under 6.0 %
You will not be remembered for how you managed the crisis of the 90’s but how you manage 09. That time, we were alone in the crisis and compulsions left with you with only one option. Now it is a Global crisis . Only intelligent and effective leadership can work. I see so many opportunities and endless possibilities. Hope see that as well. Good Luck !
Dr.Singh, we cannot drive our car looking at other cars rear view mirror. We must drive our car from within and people cannot steer it from outside. This has a message for you. Look inside and drive India to glory, out of recession
I hope i have made a point
Best regards
Rajendra Pratap Gupta
President
Country First
Email: rajendra.india@gmail.com
Mobile: 09323109456 / 9867300045
Wednesday, January 7, 2009
Satyam Fraud
Madhav Mehra
President
World Center for Corporate Governance , U.K .
President
Institute of Directors
India.
Dear Madhav,
Wish you a great 2009.
While i was the Hon. Director at IOD , i had clearly cautioned IOD, that the companies that are getting the award for corporate governance from IOD could be the next Enron’s of the world and i had cautioned Gen.Ahluwalia categorically even quoting some of the recipients
Having said this , i must re-iterate that IOD must be careful in giving out the award to companies who really deserve it after proper scrutiny and due diligence .
I had written earlier on my blog ,much before the Satyam fraud came to light ( Dec 27, 2008 . www.rajendrasays.blogspot.com ). I ,must emphasize again , that more corporate frauds can’t be rules out. Though, after this Satyam Fiasco , corporates will be more vigilant before they resort to this route.
After leaving Reliance almost two years ago , i had taken a course in Corporate governance from Kellogg Business School ,USA and decided to pursue independent board positions as my full time professions , much before people focussed on this board positions as a full time profession. Earlier , it was considered as a retired Executives parking slot,. While i took on this lead in India , a lot many people were shocked that i gave up a cushy job in Reliance and decided to pursue independent directorships as my profession. Trust me , i have been very strict with my companies for compliance and disclosures . I clearly insist and minute my issues in the board meetings so that compliance and disclosures are not dealt with lightly ( i can show some of the minutes where i have requested the board members to furnish me the quarterly compliance certificate ). If i find that the companies are not willing or are shying away. I move out of the board and mention the same in my resignations. I did that in the MNC – Medicine Shoppe . Today , we see it on the verge of closure and whatever i wrote to the board members while resigning from the board has happened . I could see that the company was not managed well and there were discrepancies in what the management was presenting to the board every quarter . I could foresee a downfall good two years back and wrote to the board and moved on as i believed that board and the management were not driving the company well.. This is despite the fact, that Medicine Shoppe Intl is a part of the fortune 20 , Cardinal Health, it was the fastest growing retail chain in India and a pioneer in pharmacy retail, adding to this ,the the investors were highly regarded PE players in the country .The country not just needs a strong law and strict guidelines to have independent directors but also the independence of directors . Independent directors and independence of directors is equally important This is not as easy as i write , as i have the experience of a dozen companies and i can understand it well from the independent directors standpoint .This has to be done by SEBI and the government without any further delay. Today, most of the independent directors are chosen from the level of comfort of promoters with the individual . In India , corporate governance is as big an issue as in the US . Only difference that , in USA you have punishments and in India you can get away with ‘ Contacts’ and ‘Payouts’.
This is what i wrote in my blog much before Satyam fiasco came to light .
“The government should be vigilant on big business houses for accounting and reporting in case they are listed, or we might see a fraud and failure like Enron or WorldCom. This is a step to avoid ‘financial terrorism’ . Some business houses ‘control’ many politicians and this is an area of big concern. We have created unequal wealth in the form of strong and gigantic business houses who are iconic Any wrong doing in such a big business houses would be like a corporate suicide and will severely impact the market scenario. I don’t rule out ‘accounting manipulations’ or ‘jugglery’ in these ‘tough times’ to keep the image and reputation intact for such big business houses”
You might like the entire blog at http://rajendragupta.wordpress.com/
It is high time that IOD reconsiders the Corporate governance award model to people who just give up the “award fee” , it must have the options of picking up people besides these applicants. Thus people like Satyam would easily get this award and no wonder that these business houses will pay any amount to get these awards and fool the investors. Seeing the current list of recipients of IOD awards. I am scared that more such names may come to light ! There is more pain in the corporate world in these turbulent times – Just wait to watch
Also, please work on the corporate governance day on 3rd Feb to create the awareness amongst people
All the best ,
Rajendra Gupta
------------------------------------------------------------------------
Rajendra Pratap Gupta
Cell : + 91- 9323109456
+ 91- 9867300045
(USA) +1515-450-6165
Skype: rajendra.india
E-Mail: mail@rajendragupta.org / rajendragupta@aol.in
www.countryfirst.org
------------------------------------------------------------------------
President
World Center for Corporate Governance , U.K .
President
Institute of Directors
India.
Dear Madhav,
Wish you a great 2009.
While i was the Hon. Director at IOD , i had clearly cautioned IOD, that the companies that are getting the award for corporate governance from IOD could be the next Enron’s of the world and i had cautioned Gen.Ahluwalia categorically even quoting some of the recipients
Having said this , i must re-iterate that IOD must be careful in giving out the award to companies who really deserve it after proper scrutiny and due diligence .
I had written earlier on my blog ,much before the Satyam fraud came to light ( Dec 27, 2008 . www.rajendrasays.blogspot.com ). I ,must emphasize again , that more corporate frauds can’t be rules out. Though, after this Satyam Fiasco , corporates will be more vigilant before they resort to this route.
After leaving Reliance almost two years ago , i had taken a course in Corporate governance from Kellogg Business School ,USA and decided to pursue independent board positions as my full time professions , much before people focussed on this board positions as a full time profession. Earlier , it was considered as a retired Executives parking slot,. While i took on this lead in India , a lot many people were shocked that i gave up a cushy job in Reliance and decided to pursue independent directorships as my profession. Trust me , i have been very strict with my companies for compliance and disclosures . I clearly insist and minute my issues in the board meetings so that compliance and disclosures are not dealt with lightly ( i can show some of the minutes where i have requested the board members to furnish me the quarterly compliance certificate ). If i find that the companies are not willing or are shying away. I move out of the board and mention the same in my resignations. I did that in the MNC – Medicine Shoppe . Today , we see it on the verge of closure and whatever i wrote to the board members while resigning from the board has happened . I could see that the company was not managed well and there were discrepancies in what the management was presenting to the board every quarter . I could foresee a downfall good two years back and wrote to the board and moved on as i believed that board and the management were not driving the company well.. This is despite the fact, that Medicine Shoppe Intl is a part of the fortune 20 , Cardinal Health, it was the fastest growing retail chain in India and a pioneer in pharmacy retail, adding to this ,the the investors were highly regarded PE players in the country .The country not just needs a strong law and strict guidelines to have independent directors but also the independence of directors . Independent directors and independence of directors is equally important This is not as easy as i write , as i have the experience of a dozen companies and i can understand it well from the independent directors standpoint .This has to be done by SEBI and the government without any further delay. Today, most of the independent directors are chosen from the level of comfort of promoters with the individual . In India , corporate governance is as big an issue as in the US . Only difference that , in USA you have punishments and in India you can get away with ‘ Contacts’ and ‘Payouts’.
This is what i wrote in my blog much before Satyam fiasco came to light .
“The government should be vigilant on big business houses for accounting and reporting in case they are listed, or we might see a fraud and failure like Enron or WorldCom. This is a step to avoid ‘financial terrorism’ . Some business houses ‘control’ many politicians and this is an area of big concern. We have created unequal wealth in the form of strong and gigantic business houses who are iconic Any wrong doing in such a big business houses would be like a corporate suicide and will severely impact the market scenario. I don’t rule out ‘accounting manipulations’ or ‘jugglery’ in these ‘tough times’ to keep the image and reputation intact for such big business houses”
You might like the entire blog at http://rajendragupta.wordpress.com/
It is high time that IOD reconsiders the Corporate governance award model to people who just give up the “award fee” , it must have the options of picking up people besides these applicants. Thus people like Satyam would easily get this award and no wonder that these business houses will pay any amount to get these awards and fool the investors. Seeing the current list of recipients of IOD awards. I am scared that more such names may come to light ! There is more pain in the corporate world in these turbulent times – Just wait to watch
Also, please work on the corporate governance day on 3rd Feb to create the awareness amongst people
All the best ,
Rajendra Gupta
------------------------------------------------------------------------
Rajendra Pratap Gupta
Cell : + 91- 9323109456
+ 91- 9867300045
(USA) +1515-450-6165
Skype: rajendra.india
E-Mail: mail@rajendragupta.org / rajendragupta@aol.in
www.countryfirst.org
------------------------------------------------------------------------
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