B DAY BLUES

Budget Day has come and gone. The hype and hoopla associated with the
budget has turned the event into a veritable television frenzy. The
immediate takeaway is that prices will rise – all services, barring 17
items, which form 59 per cent of the GDP will be taxed at higher rate
of 12 per cent while excise duty has been ramped up to 12 per cent
from 10. The next big scare comes from the rising fiscal deficit which
obviously has a life force of its own because it has galloped to 5.9
per cent of the GDP. Throw in the debt on the books of the states and
this consolidate figure is in excess of 10 per cent. Tinkering in the
income tax slabs may have thrown some crumbs for the salaried class,
but the general rule of thumb in this budget is that prices will rise.

In many ways a zero risk, middling, pedestrian and lackluster budget
driven by an overhang of a dramatic revenue shortfall. It makes the
right noises about important items on the nation’s agenda, but does
not detail the prognosis for the affliction. The journey over the last
seven years has seen the Congress hemmed in by its coalition partners
– first the Left and the DMK and now increasingly the Trinamool
Congress. One step forwards and three step backwards as pressure
points have been built up incisively by the allies reducing the
Congress’s room to manoeuvre.
Fiscal profligacy over the past few years has even seen full stop vis
a vis populist flagship schemes. Safe rather than sorry seems to be
the mantra. Once again finance minister Pranab Mukherjee has wasted an
opportunity to take India to the next level of the growth paradigm.
While he said the right things, the words may not necessarily mean
very much. "Economic policy, as medical treatment, often requires us
to do something which in the short run may be painful but is good for
us in the long run," he said and rounded it off by saying, “As
Hamlet, the Prince of Denmark, said in Shakespeare's immortal words,
'I must be cruel only to be kind'."
Yes, I want to do so much, but I cannot. Which is a travesty because
it means that India is satisfied with a 6.5 per cent growth when by
widening and deepening reform, it can actually vault back to the 9
plus per cent trajectory. Potent, unpalatable reformist measures
simply cannot be taken by this government, the yawning fiscal gap all
pervasive. Mercifully, the finance minister has for the first time
dealt with one of the biggest eyesores – generation and use of
unaccounted money. What is welcome is the introduction of compulsory
reporting requirement for assets held abroad and allowing for
reopening of assessment upto 16 years in relations to these same
assets.
The FM reckons that 7.6 per cent is an achievable growth target for
next year, which appears optimistic, given the inflationary pressures
that swim around in the economy. A spike in crude oil prices has
swelled India's subsidy burden to roughly 2.5 percent of GDP. The year
2014 is already looming large on the political horizon, this budget
shows that it may well have popped up on the radar a year early.
Distraught over the recent debacle at the hustings, drubbed repeatedly
by TMC’s Mamta Banerjee, it appears to be a government in a limbo. In
many ways a mirror image of the tokenism that an embattled government
is dishing out in terms of governance. The budget being a microcosm of
a larger paralysis. No growth imperatives and definitely no blueprint
to control the rising fisc.

-MAIL TODAY,17TH MARCH,2012

ECONOMICS IS NOW HOSTAGE TO POLITICS

Should good economics always be sacrificed at the altar of bad
politics? Well, in this debate which is as old as the Aravali Hills,
populism appears to be trumping simple economics again and again.
India remains a capital starved, infrastructure, energy and power
deficit nation which does not have the wherewithal to generate enough
capital to pump prime its myriad requirements. On the verge of
becoming a 2 trillion dollar economy, its structural inadequacies lie
exposed. Not that the door to opportunity does not lie ajar. It is
ready and waiting, but it requires gumption, sagacity and in many ways
a bold outlook.

The same Manmohan Singh who heads the government at the Centre took a
series of bold, innovative and even dramatic decisions 21 years ago as
finance minister. The question is whether the majority of those
pragmatic measures were all his own or then Prime Minister P V
Narasimha Rao’s? The reality is that Manmohan Singh, a respected
economist, was the instrumentality of change and in many ways the
poster boy of a new India. Perhaps that is why the expectations from
him as PM rose. But hemmed in by the Left and DMK in his first term
and by allies like Mamta Benerjee in his second, he has failed to keep
the promises.

Devaluing the rupee, decontrolling gold, freeing up the stock markets,
dismantling import controls, slashing customs duties, virtually
abolishing licensing controls on private investment, cutting tax rates
and breaking public sector monopolies – a veritable catalogue of
initiatives changed the course of this country. From a nation trapped
in its socialist moorings, Narasimha Rao understanding the need of the
hour backed the economist FM to the hilt.

Interestingly, a vast swathe of extremely capable bureaucrats and
policy mavens assisted the new FM in all his endeavours. Montek Singh
Ahluwalia (still here as part of the A Team), Shankar Acharya, K P
Geetakrishnan, M R Sivaram, N K Singh (now a RS MP), Y V Reddy (who
became RBI Governor) and even Rahul Khullar (now Commerce Secretary)
who was private secretary to Dr Manmohan Singh then. N K Singh
recently told me that, “Reforms were as much prompted by an impending
economic crisis than intellectual persuasion; more by the former than
latter.” Interestingly two other gentleman played a handsome part as
dramatis personae in those tumultuous times – P Chidambaram who was
commerce minister and his able secretary Montek Singh Ahluwalia who
were instrumental in ushering the spanking new trade liberalization
regime. Montek Singh then moved to finance and assisted the FM.

But over the last seven years, several opportunities have been
frittered away by the present dispensation to undertake path breaking
reforms which could widen and deepen the economy so that it could
neutralize the capital deficit and move to the next level of
competence. N K Singh also made the point that once again the
floundering Indian economy requires a push. Yes, we have over $325
billion in forex reserves, but a burgeoning fiscal deficit, the ever
growing size of the economy and a fattening import bill are reasons to
take notice of. Most policy makers will privately tell you that deep
corrections need to be made for the writing is on is on the wall. For
if they are ignored, then it is at our own peril. A party with 19 MPs
– Trinamool – cannot hold the nation hostage. For the first time in
nearly 10 years, the railway minister Dinesh Trivedi has bitten the
bullet and decided to hike fares. Why, because it is the need of the
hour, one cannot subsidise passenger fares with freight hikes
endlessly. In the process making railway freight uncompetitive. At one
level, the end user has to pay for services and the fares have been
increased modestly by an Indian Railway which is more or less bust,
despite Laloo Prasad Yadav’s falsehoods.

In Manmohan’s first term, for starters the 2008 global meltdown set
India back, but Pranab Mukherjee with a series of calibrated and
considered responses managed to ride out of that crisis ably and
soundly. Now once again India stands on the cusp of change. The choice
is ours – do we want to allow ourselves to be held to ransom by Mamta
Banerjee or do we want to get on with business and life in general? It
is nice to see railway minister Dinesh Trivedi refusing to dodge the
bullet on the issue of a rollback in passenger fares. He reckons his
country comes first and the party that he represents second. The time
is here and now for Pranab Babu. He has shown astute political insight
to straddle both worlds – a world where Mrs Indira Gandhi’s socialism
prevailed and a world where market forces determine everything.
Insulation cannot be proferred as a reason to run the state. Commerce
is the modern axis, everything revolves around it. Deep rooted beliefs
and dogmas have to be consigned to the rubbish heap of history. The
Hindu rate of growth is now an aberration, not the norm. India has to
move on.

Ironically, the moves to liberalise the economy and have it plug and
play with a globalised world was done by what was in effect a minority
government headed by Narasimha Rao. In 1991-92, GDP growth hit skid
row at an abysmal 0.5 per cent. One can argue that in an era of
coalition politics, a policy of gradualism is required. Maybe the time
has come to cut the umbilical cord and once again embark on a path of
least resistance. Highly unlikely given the compulsions of coalition
politics and the state of play in parliament. Yet, hope floats.

-MAIL TODAY,15TH MARCH,2012

BUDGET CONUNDRUM

On March 16, India makes its tryst with yet another budget. B Day with
all its surrounding hype and hoopla is seen as the quick fix to
alleviate our endless woes. The hoi polloi’s constant and ever growing
litany of complaints and grouses will not be transformed at the end of
Pranab da’s speech. There is no metamorphosis or magic wand to change
the course of our lives. In many ways, the budget is a statement of
record, it details the income and expenditure plans of the government.

At best a balance sheet where some commodities, products and services
either get more expensive or cheaper since they are a function of a
hike or reduction in taxes. More importantly, with the UPA
Government’s singular focus on social security schemes so that the
message of financial inclusion actually takes shape at the bottom of
India’s vast pyramid being all pervasive, the rest of the budget
speech doesn’t hold too many surprises anyway. Constructive decision
making has to be taken out of the ambit of the budget. Decision making
to circumvent policy paralysis is a dire and crying need. From the
corporate to the common man, one and all want to see concrete ideation
and quicker roll out on the ground in terms of implementation.

This logjam primarily due to the lack of persuasive and cogent intent
on the part of the executive and bureaucracy to get things moving is
costing India. A classic case of tripping over a major policy
initiative was the fiasco over the entry of multi brand retail trade.
The government for a change showed that it had the gumption to bite
the bullet. As soon as the winter session opened, the Union Cabinet
rammed the new policy through. Alas the parliament was in session and
all hell broke loose.

The resistance to this decision was vehement as opposition parties
closed ranks against the ruling dispensation. In fact, UPA constituent
Trinamool Congress went ballistic on the decision and wanted a
rollback. It was a curious case of – what did we do wrong? Yes, simply
because now that the government had bitten the bullet and rolled out
big ticket reform, why was there so much hullabaloo? More like a cul
de sac, I guess. After all when the Government chooses to allow a
drift in policy, they are criticized by trenchant opposition. When
they do take the plunge, equally the treasury benches are at fault.

So, one step forward and three steps backwards as the parliamentary
whirligig found a decibel level which was uncomfortable for the ruling
party. Humbled, they had pull the plug on the multi brand retail
foreign direct investment issue. It was a resounding slap on the face
of this government. Let us go back in the Wellsian Time Machine for a
bit. In June 2010, once again the government decided to go for a dare
all bare all type of policy impetus. But, again it worked out as a
half way house since oil deregulation translated merely into petrol
pricing deregulation. A dangerous half way house, align petrol prices
with global crude prices, but refrain from taking a call on diesel,
LPG and kerosene pricing. Remember India runs on diesel, its entire
freight movement is on diesel wheels.

Ergo, diesel is an untouchable. Which allows people to exploit a
nearly Rs 26 differential between petrol and diesel prices. Car
manufacturers big and small have entered the diesel domain and the
entire business case for oil sector deregulation has been self
defeating. Oil companies are in the process losing money hand over
fist. Between April and December 2011, the under recoveries are a
humungous Rs 97313 crore. All told at the end of this financial year
ending March 31, 2011-12, they will be in the vicinity of Rs 140,000
crore in this high crude price environment. This is pretty much
bleeding the oil marketing companies, debilitating them to such an
extent that soon they will not be able to secure loans to buy crude to
refine.

Let us now come back to this budget and what it will showcase. The
first big number that anybody who understands economics and finance
will be looking out for will be the fiscal deficit number. This is a
biggie, all eyes are on this number. The number despite the FRBM Act
which mandates that this number needs to be scaled down year after
year progressively will be closer to 6 % of GDP against 4.6 % last
year. Throw in the debt that state governments have amassed and this
number grows in a hydra headed monster. Nearly 10 % of GDP, a scary
prospect for any finance minister. Now add the new fangled Food
Security Bill and the rising subsidy bill which includes food, oil and
fertilizer and you have a potent mix on hand. Nobody has a fix on the
new food security bill and what kind of allocations will be made for
the same. The subsidy bill hovers around Rs 120,000 crore presently,
add another Rs 30,000 crore for the new food security bill and the
spike in the fisc is a cause for concern. All this can shave off as
much as a percentage point from the already decelerating GDP growth
numbers.


WHAT IS HURTING THE GROWTH STORY

*India’s economy is stuck with 10 headaches – just when it looked like
a challenger to China as the world’s fastest growing economy.

*Food prices may have moderated, but global commodity prices,
especially crude oil prices are soaring.

*High commodity prices will knock up prices of most goods

*Industrial sluggishness owing to a spike in interest rates

*Export slowdown and weakening consumer demand are major concerns

*Overhang of Corruption scandals have hit political and bureaucratic
sentiment impacting business climate

*Recent Supreme Court judgment invalidating 2G licenses has rocked the
investment climate forcing a pull out from some of the foreign majors
who had set up shop

*There have been no major policy decisions in recent months because
policy-makers cannot agree on critical issues

*Spats between ministers and a parliamentary logjam have hurt governance

*Not many innovative policy decisions have been taken in recent months
to reach out to the poor, whose votes are vital for the Congress-led
UPA.

*Time and cost overruns have been a bane for India’s infrastructure projects.
•
*Coal and equipment shortages, bad weather and delays in government
clearances have resulted in major slippages in projects

*Investment remains concentrated heavily in favour of few states.

*Policy uncertainties loom ahead of the budget, threatening the
government’s aim to rein in its deficit

*Runaway prices have upset the government’s plans of implementing a
carefully calibrated exit plan of the fiscal stimulus package set in
motion during the world economic crisis.

*Recent results at the hustings will encourage Congress to resort to
greater populism in the budget.

-MAIL TODAY,14TH MARCH,2012

Desperate 2G review petition ends up defending NDA actions

In an attempt to save face, UPA has given NDA a major political
concession where the 2G scam is concerned.

The review petition filed by the government against the Supreme Court
judgment cancelling the 123 UAS licenses and directing that the
spectrum be taken back from these companies and auctioned in the
future seems to be the result of detailed discussions within the
government, including presentations and meetings held under the
chairmanship of Prime Minister Manmohan Singh on February 11, 2012,
and a second presentation discussed with Finance Minister Pranab
Mukherjee on February 24, 2012.

While two actions have already been taken regarding clarification and
a review, discussions are still on about a presidential reference
under Article 143 of the Constitution with respect to the question of
the law, which have arisen in the context. Mail Today has got a copy
of the presentation that was discussed amongst the members of the
Cabinet, based on which the decision to file the review petition was
taken. A reading of this presentation shows that the DoT may have
stretched, even misrepresented, what the Supreme Court has said or the
inferences drawn – in a bid to extract an approval to file the review
petition. Under the Section ‘Suggested Approach’, the conclusions of
law that have been listed, based on which the review petition has been
argued, include an argument that the Supreme Court has exercised the
power of judicial review to examine the merits of a policy adopted by
the government.

The Department of Telecom has argued that since the First Come, First
Served (FCFS) is government policy, its rejection amounts to a
rejection of the policy of the government. While making this argument,
the presentation does not state anywhere that, in effect, FCFS was
announced for the allocation of spectrum for basic service operators
or fixed line companies in 2001. It does not inform that fixed line or
basic service licenses were never given out after 2001 and came to a
complete halt by October 2003, but more importantly, it has led the
government in desperation to defend the actions the NDA government as
a part of the review petition.

The now-jailed Telecom Minister A Raja had argued for the longest time
that he had continued the policy of FCFS adopted by the NDA government
in 2003. This has also been a subject matter of several press releases
and press conferences, including those held by his successor and
current Telecom Minister Kapil Sibal. In fact, Sibal’s argument has
been that the policy was correct and at best there was a problem with
implementation, and therefore Raja and Raja alone was to blame. The
Supreme Court, however, while writing the detailed judgment, has made
several adverse comments about the FCFS policy.

The Supreme Court has mentioned that, “There is a fundamental flaw in
the principle of first come, first served in as much as it involves an
element of pure chance or accident. In matters involving award of
contracts or grant of license or permission to use public property,
the invocation of first come, first served principle has inherently
dangerous principles.” The court then goes on to describe how FCFS is
misused by emphasizing, “Any person who has access to power corridor
at the highest or the lowest level may be able to obtain information
from the government files or the files of the agency/instrumentality
of the state that a particular public property or asset is likely to
be disposed of or a contract is likely to be awarded or a license or
permission would be given.

He would immediately make an application and would become entitled to
stand first in the queue at the cost of all others who may have a
better claim.” Then, in a bid to ensure that no further misuse of FCFS
occurs where scarce natural resources with high commercial auction
value are concerned, the court stated in its judgment, “This court has
repeatedly held that whenever a contract is to be awarded or a license
is to be given, the public authority must adopt a transparent and fair
method for making selections so that all eligible persons get a fair
opportunity of competition. To put it differently, the state and its
agencies/instrumentalities must always adopt a rational method for
disposal of public property and no attempt should be made to scuttle
the claim of worthy applicants.”

It is clear from the Supreme Court’s order that the court is paying
special attention to natural resources where demand far exceeds
supply, and those where private companies or businesses are willing to
pay monies to the exchequer since they believe that the contract (in
this case, spectrum) can, as a part of their business, generate income
for them and their shareholders. Making specific reference to such
natural resources which are qualified to raise revenue due to their
commercial worthiness, the court concluded, “When it comes to
alienation of scarce natural resources like spectrum etc, the state
must always adopt a method of auction by giving wide publicity so that
all eligible persons may participate in the process.”

Warning against other methods, the court makes a final comment, “Any
other methodology for disposal of public property or natural/national
assets is likely to be misused by unscrupulous people who are only
interested in garnering maximum financial benefit and have no respect
for the constitutional ethos or values.” The government is not only
upset with what they think is a Supreme Court decision which impacts
their right under the policy making function to decide auction versus
FCFS, but has in fact gone overboard in attacking auctions and by
consequence, defending FCFS by questioning the court’s judgment,
citing issues of public interest by way of tele density, affordability
and growth etc.

Now, while there is very little by way of evidence to show that the
government’s decision of utilizing FCFS resulted in any great increase
in teledensity, especially through the new entrants whose licenses
have now been cancelled, the entire petition seems to defend
vehemently the decisions made by the NDA government and therefore
bringing to naught any attempts by the CBI hereafter to find fault
with the allocation of spectrum between 2003 and 2007 by Arun Shourie
and later by Dayanidhi Maran.

It is unclear if the government realizes that its strong defence of
FCFS would essentially mean that any attempt to shift the blame to the
NDA is hereafter thwarted. In fact, the government also seems to have
gone out of its way during the hearing of the 2G cancellation matter
wherein the government lawyers told the court in specific terms while
referring to the decisions made by the NDA government in 2003 that,
“The policy decision taken by the DoT for migration of CDMA service
providers was neither illegal nor unconstitutional.”

It remains to be seen whether the Supreme Court will admit the
petition filed by the DoT, but it is quite clear that the UPA, in a
bid to hide its embarrassment, has taken steps that will now be used
by the NDA government if the issue about irregular or illegal favours
is ever brought up by the government or its spokespersons as it
relates to the NDA regime between 2001 and 2004. The presentation
made to the PM and FM also seems to be flawed by suggesting that the
court rejected the policy because it believed that “revenue
maximization should have been the overriding consideration.” A reading
of the judgment shows that the Supreme Court has never made such a
claim.

Sure, it has argued that exchequer revenue needs to be protected,
especially when private companies in turn earn monies from such
allocations, but stretching that to terms such as ‘revenue
maximization’ is certainly not within the purview of the judgment.
While the judicial review of the petition will depend upon its
admission, its political fallout by way of this massive concession
granted to the NDA, even if inadvertent, leaves the UPA even more
fragile in its defence after the judgment has held, contrary to the
PM’s and Sibal’s attempts, that the decision was not only illegal, but
that in fact, a massive loss has been caused to the government.

- MAIL TODAY , 11TH MARCH,2012

BHAIYAJI TRUMPS THE PRINCE

Sitting in Delhi, Uttar Pradesh conjures up myriad thoughts in your mind’s eye. The dustbowl of UP went to the polls in one of the most eventful elections in recent times. You can argue that the seminal vanquishing of the Left by dragon slayer Mamta Banerjee in West Bengal last year was equally momentous. As a date in time and history perhaps the Left’s ignominious exit was of far greater significance than the UP hustings in 2012. After all, Mamta threw out the Left after an eternity, an aeon. But Bengal is not central to Indian politics, not in the way UP is. I know that Mamta di will take objection to that. For Mamta has her alliance partner by the shorts and curlies. UP is contiguous to New Delhi, the seat of power in Indian politics, Noida, Ghaziabad and even Faridabad are increasingly part of the NationalCapital Region.

UP fires one’s imagination. Political pundits and pollsters get excited at the thought of rajneeti in UP. The state has given a catalogue of Prime Ministers and other assorted eminence grace to theworld of Indian polity. The timing of the UP elections this time was crucial. It was viewed as a referendum, a semi final, call it what you will, but a milestone. A milestone simply because it is reckoned that we once again stand on a cusp of change. Seven years of a Congress led coalition at the centre has a seen a policy paralysis in the wake of a slew of corruption scandals. Hence, two years before the general elections, even if one ignores the hyperbole, it is an important election. For several reasons.

Firstly for Rahul Gandhi’s ambition. His tearing ambition to evict the landlady in Lucknow. His hunger to make a mark in national politics by usurping the lost legacy of the Nehru-Gandhi dynasty in UP. So, he has tried and you cannot fault him for that. For Rahul Gandhi and his family, this is a crucial election, probably more important than even the 2009 general elections. A third of the constituencies redrawn as part of delimitation throwing the most hardnosed of political observers to shake their head in wonderment when asked to call the result. A voting trend line which again confused one and all because the higher the percentage, the more the anti incumbency. Anyway , so , goes the theorem. Even as I sit and hammer down the keys on my laptop, news just breaking is that former UP health minister Babu Singh Kushwaha has been arrested by the CBI for his role in the multi crore National Rural Health Mission scam. The time 5.03, just moments after polling ended in the seventh phase. Look at the timing, isn’t it clear that in a coordinated operation, the CBI has swooped down on him. An olive branch from the ruling dispensation led by the Congress at the Centre to the principal and leading party in the state polls SP.

The Muslim quota equally played a major part in these polls. Congress leaders Salman Khurshid, Beni Prasad Verma and Sriprakash Jaiswal made a big song and dance over the sub quota for Muslims. The SP ran its own campaign to garner the Muslim vote. Between the two parties, it appeared that they had cornered the Muslim vote. Or so one would like to believe. But this led to deep polarization with the upper castes and upper classes gravitating perhaps to the BJP. Thoroughly confused.

Oh yes, without a doubt because there is so much in this state of play that one cannot call with any degree of certainty. The sub text just got more interesting because of some of these imponderables. Rahul Gandhi brazen armed with his derring do went eye ball to eyeball with SP’s next gen Aklilesh Singh Yadav. Rahul Gandhi’s naked obsession for the throne in UP and Akilesh’s much calmer response was one of the high points of this election. Point and counter point. huesBoth crisscrossed the state tirelessly, trying to best the other by fulminating against one another. The ‘ lal topi’ wave which first emerged in eastern UP and then spread over the rest of the state hurting the Congress and its aspirations. Similarly, the BJP apparatchik Sanjay Joshi in conjunction with Uma Bharti transposed in to the battlefield from MP tried their level best to return BJP to some respectability. An election of endurance, character, varying characters, many hues and a quadrangular contest hitherto not seen in any other state.

Netaji Mulayam Singh Yadav wisely allowed his son to take on Rahul. Taking a backseat he allowed his son space in this joust. In many ways, not much is known about both Rahul and Akilesh. For both young leaders, this is a defining election, one wants to wrest back his family’s legacy and heritage, while the other wants to reclaim what he believes is rightfully his. In this theatre, no one could ignore the incumbent Behenji Mayawati whose sarvajan samajh social engineering experiment worked wonders in 2007 upsetting everyone’s applecart. A breath taking simple majority has seen five years of what can only be described as arrogant misrule. While the lawlessness of the previous regime was corrected, corruption and in the main a bloody rural health scam cover up has sullied her term indelibly. A park full of elephants on the periphery of the rajdhani accentuating her arrogance. More votes and voters added to the sweepstakes, as many as 1.3 crore new voters voting with their feet.

An election with a vast swathe, replete with colour and colourful lingua franca. Case in point being Salman Khurshid who was even willing to be hanged for the Muslim quota and vote. Rahul Gandhi backed by his family complete with mother and a proud sister backed by a huge party apparatus, though woefully short of cadres on the ground. Even brother in law Robert Vadra pitched in, entering the equation by announcing his arrival, though his wife Priyanka dismissed his electoral ambitions with nonchalance. The Rahul vs Akilesh imagery wasn’t lost on the youth of the state. A new breed of politicians, a new brand of verbal warfare, truly an election or should I call it a theatre. A theatre so huge that from west to east and north to south, it is a country by itself. A state plagued by misrule, underdevelopment, corruption, inhabited by millions who want change and succor and alleviation from their long litany of woes. The exit polls and the punters have called it. The colour of victory is red. Lucknow beckons. It is Samajwadi which appears to be headed in that direction.

March 6 will offer closure. It is only then that we will get to know where Rahul, Akilesh, Uma Bharti, Sanjay Joshi, Mayawati – the dramatis personae – of these hustings will actually know where they
stand.

-MAIL TODAY,O4TH MARCH,2012

DISEQUILIBRIUM

When or why not, is the big question that has dominated mind space
ever since the rag tag bobtail Indian cricket side has been getting a
thrashing in Oz. The big four have flopped miserably in Australia,
their slowing, even maladroit reflexes being caught out by young
muscular Australian fast bowlers. Though the highest wicket taker, I
must confess was an older swing bowler called Ben Hilfenhaus, but this
too threw into stark relief the fact that our aging batters were found
short in terms of technical exactitude. After the ignominy of getting
bowled repeatedly in Australia, I actually thought that Rahul Dravid
who is probably the smartest of the big four – Sachin Tendulkar, VVS
Laxman, Virender Sehwag and himself – would chuck it up at the end of
the final Test. But he chose not to and this was most baffling.

Dravid had given up on the Indian captaincy most abruptly after
winning the series in England when we toured in 2007. I was certain
that he and probably Laxman would call it quits because they had
dominated the game over time, made a name for themselves and would not
like to hang on to the last vestiges of fame and glory. They have
nothing to prove to anyone. Their defining stand at the Eden against
the Aussies in 2001 is part of cricketing folklore. Seen as the
cricketing version of the gunfight at OK Corral, they enacted the
roles of Wyatt Earp and Doc Holliday with great distinction.

Unfortunately Sachin Tendulkar, a great servant to Indian cricket, may
also be overstaying his welcome. The world and I believe that he is
one innings away from regaining form and more importantly scoring his
100th international century. Alas, we are still waiting. The wait is
now getting excruciatingly painful. He has two more shots at doing it,
if Dhonis’s rotation policy doesn’t scupper it, that is. Logic
suggests that Tendulkar should smash a breath taking century and then
announce his retirement from one day cricket. The Sydney Cricket
Ground also known as Sachin Cricket Ground will be a fitting venue for
such an event. In fact, Sachin should do what Dravid and Laxman could
not get themselves to do – call it quits.

It pains all us cricket junkies to watch the Fab Four making mockery
of their collective ability by coming out again and again and then
playing from memory, pale shadows of great cricketers from the not so
distant past. It hurts all us junkies to watch the perplexed
expressions on their faces when they are bowled or given out leg
before. The expression is one of wonderment. What they should realize
is that time stops for no one and cricket at the end of the day also
involves physicality. In Viru’s case this is most apparent – a typical
hand-eye coordination player with no foot movement whatsoever - he has
proved to be the most destructive batsman of his generation. But
something is clearly amiss. The famed hand-eye coordination and the
innate ability to pick the length and smash the ball to any part of
the field with his customary derring do is missing. Maybe even
forgotten.

India does not play Test cricket for a long time this year. I think
the next series is against Sri Lanka in the Emerald Isle around the
time the T 20 World Cup is played there. Of course, India has a full
home season with the English playing a four Tests on a longish tour
after a long time, followed by the Kiwis over next winter. The big
three will certainly be closer to 40, their skills they would like to
believe undiminished, but flesh on the whole much weaker. Many great
players have understood the need to go at the peak. Some cases in
point in India are Vijay Merchant and Sunny Gavaskar. On a bunsen in
Bangalore against Iqbal Qasim and Tauseef Ahmed, Gavaskar battled all
alone only to be adjudged caught off his elbow virtually on the
periphery of one of his greatest centuries. There and then at 37 with
at least another year left in the tank, he decided it was time to go.
He did play the 1987 World Cup after that, but quit the longer format
with that amazing innings replete with perfectitude.

Tendulkar has had a glittering career, some say that despite the
mountain of runs, he may have underachieved personally. Say in
comparison to Brian Charles Lara, there are those who believe that he
may have shown longevity, but in terms of quality of runs, it is not
the same thing. This is not to belittle ‘tiny ten’, but there may be
the odd demon that the little big fella must be wrestling with at
night in the solitude of his room. Winning causes is arguably the
single biggest bugbear, just as consistency has been. If my memory
serves me right and if I am not wrong, Tendulkar has never scored 500
runs in a Test series. Tendulkar can walk on water for all us fans and
nobody dare take potshots at him. But the time has come to assess
whether the fab four with Sachin at the vanguard has to make way for
the young turks and newbies. India plays Sri Lanka, England and New
Zealand in Test cricket, all in the sub continent later this year. We
needed to groom the next lot of batters here and now. The crop looks
promising, more so if we are playing at home. Gautam Gambhir can be
the new fulcrum around whom the likes of Virat Kohli, Rohit Sharma,
Manoj Tiwary, Maneesh Pandey and Cheteshwar Pujara will have to form
the nucleus of a young India.

It is clear that Mahendra Singh Dhoni is obviously uncomfortably with
Sachin and Viru in the one day side. He wanted to invest in youth just
as he has done in the past and succeed. The selectors, I hear didn’t
allow him that leeway. He wanted both Viru and Sachin out, but they
were foisted on him in Oz. A combination of abject performances and
disquiet in the dressing is not welcome. On the last tour of Oz, India
won the tri series against the same opposition and did so in style.
The team for most part was youthful though Tendulkar played two great
innings in the two finals against Oz. Five years later it is
imperative that Sachin gets the monkey off his back. And then walks
into the sunset. You have given us much enjoyment, transported us into
an unknown orbit of delight and we have lived the game with you, but
score the hundred and quit. No cricketer is bigger than the game, this
is the game that we love and adore. The time is here and now, go when
you want to not when a group of former cricketers, lesser mortals than
you – also called selectors – want you to. Otherwise the old comment
of the there being an elephant in the room and nobody wanting to
acknowledge its presence will come crawling back to haunt one and all.
Learn from Sunny, play the game and go at the top.

-MAIL TODAY,26TH FEB,2012 

VICTIM OF HIS OWN HYPE

When perception meets reality in a dark and dank corridor, it turns
into a very scary proposition. Reality is the over riding theme that
emerges as the door opens to show light. This harsh light of reality
in many ways is what Vijay Mallya is facing these days. A prisoner and
even victim of his self generated hype and larger than life persona,
Mallya's warts lie exposed. Yes, perception about him has rapidly
intertwined with reality to show how a wealthy man needs financial
crutches to set his business in order. VJM as Vijay Mallya is known is
an extremely successful businessman. You wouldn't think so if you are
watching telly or reading the papers these days. Mallya has come a
long way from the time that he raced fast cars in Barrackpore near
Kolkata with arm candy in tow. His father Vittal Mallya ran a tight
but spiffy liquor empire.

After Mallya senior's untimely death, young Vijay Mallya all of 27
took a series of well calibrated decisions to emerge as the undiputed
liquor baron of India. Slowly and systematically, he exited non core
businesses hiving off and hawking Kissan and Berger Paints ($66
million) other brands. As he once told me on board his Gulfstream jet
winging our way to Kolkata - I am not a corporate museum, I have to
constantly rejig my portfolio and reinvent to become bigger. It worked
well for Mallya, as he assiduously worked at chipping away at his
rivals in the liquor business. Finally, he owned everything from
Millennium Alcobev to Shaw Wallace, he had swept all before him and
conquered not just his rivals, but in many ways all the demons within
.

On self styled Dubai based billionaire Manu Chabbria's death in 2002,
Mallya made a hostile bid for Shaw Wallace thereby culminating a
bitter rivalry with MRC. Mallya's genius was to constantly capture the
moment in the liquor and lifestyle segment. Long years ago, while
flicking through a United Breweries archive, Mallya found a brand
called Kingfisher which dated back to 1865 and used to be then
transported in hogsheads. He liked and loved the vibrancy of the
brandname, asked his father for a million bucks to relaunch it, was
turned down, then revived it later and turned it into a mega brand
which enjoys enormous saliency with Indians around the world.
Kingfisher transcended everything and emerged as a new lifestyle brand
for neophyte Indians.

Stories about his passion for fast cars, big yachts, faster and bigger
planes, lavish parties which identified with his persona and king of
good time image has now become a millstone around his neck. With the
acquisition in 2007 of the world's fourth largest scotch maker - Whyte
and Mackay for 595 pounds sterling - Mallya enlarged his swathe.
Playboy or no playboy, Mallya has shown his shrewd side repeatedly
over the years. Till he decided that his nose was bigger than Jet
Airways's Naresh Goyal. That is where he went wrong. By entering a
cash burning, bruising business like aviation where variables like
fuel cost which are as high 40 per cent can have a debilitating impact
on the financial health of the airline. More so in a high crude
environment, where the airline business is much akin to walking a high
wire without a safety net below. Mallya has learnt to his chargin that
the good times aren’t permanent. Despite showing his intent and
ploughing in as much as Rs 980 crore over the last 12 months,
Kingfisher Airlines has been on a wing and a prayer for most part
hurtling from one crisis to another.

What started out as the best flying experience in Indian skies has
slowly but surely degenerated into a farcical play out of flights
being cancelled, customers stranded and a general air of despondency
surrounding the airline. The “guest experience” included all the
frills – valets, live in-flight satellite television, goody bags and
the smartest air hostesses in the sky. But over time his ego and
ambition got the better of him. He placed an order for 50 Airbus
aircraft - A320, A330, A350 and A380 aircraft. An embattled Mallya has
managed to keep the airline afloat despite all the travails and
tribulations. But by asking the government banks for yet another
handout, he has crossed the lakshman rekha. As civil aviation minister
Ajit Singh said – Mr Mallya needs to understand that Kingfisher is not
Air India. Yes, distortionary taxes on aviation turbine fuel and
skewed policies have played a played a part in his decline, but the
reality of not focusing on his business and allowing it to drift have
devastated the balance sheet, leaving a sea of red behind. How could
he not meet statutory obligations like tax deducted at source and
provident fund payouts? This is most galling about the way his airline
business has been run.
What are the options before Mallya? He needs to show intent. He needs
to show his commitment. Will he hawk his 42.5 per cent stake in Force
India to his partner Subrata Roy Sahara or will he put one of his
smaller companies like MCF on the block and raise cash. Mallya has
shown that he is combative and a survivor. He needs to understand that
he is trapped in a sector which is constantly in turmoil due to the
exorbitant cost of ATF. Like moths to the flame, innumerable players
in India’s short but turbulent aviation sector history have come a
cropper. Open skies is all very well, but when everyone including my
aunt want to fly the skies then one can easily liken it to the old
adage of ‘pigs too can fly’. Over the years, India’s remarkable
journey in the quest to make the tryst with open skies has resulted in
so many casualties, that sometimes it does seem a bit odd. The
aviation business in any case is not for the faint hearted.
Increasingly in India and even the rest of the world it is a mug's
game.
In the Hollywood film Crazy Heart about a fading country western
singer Jeff Bridges sings – It is funny how falling seems like flying.
Vijay Mallya has to fly again not just for himself but for the
sector’s good. But he has to do it on his own, without the government
playing nanny.

-MAIL TODAY, 25TH FEB'12