Month: March 2013

Illusions and dreams

He couldn’t quite recall how and when she suddenly appeared and gave him their customary twenty-second hug and that too in front of his friends. He wanted to tell her how much he missed them but all he could manage was to ask was how was her flight. They had not met since 6 months and her beauty did every bit of justice to his memory. Things had not been good and they both knew it. There was a time when they couldn’t get enough of the other person but those were now vague memories. But now he had hope. She was back. They had survived those times which could have so easily ended everything that they have. He caught her giving him glances as she laughed gaily along with his friends. He looked at her beautiful face, her inch-perfect smile as a sense of peace washed over him.

The persistent rings of his phone woke him up from his deep slumber. It left a dead silence as it stopped ringing. As obnubilated as one could feel, he searched for his watch. It was half past 6, time enough to prepare for his meeting which commenced at 9. As he washed his face it struck him like a lightning, it was all a dream. She was still far away. He prepared coffee for himself while trying to avoid those nostalgic thoughts. As he sat down reading the notes he had prepared the previous night, he wondered if at all things would be alright. Not being able to concentrate on work, on impulse he got up. He had this sudden urge to talk to her that very moment. As he was about to pick up his telephone it started ringing again. It was her calling to wish him good morning.

15th March 2013

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The 1$ a tank man

“We’re not perfect, but we do have democracy.”

– Hugo Chavez

You’ve got to admit it, a person who screws up a 100 times and still continues to rule has got to have something in him. Undoubtedly Mr. Hugo Chavez did. He was always more of an artist than a deserving democrat. This was apparent in the 15 years he ruled over Venezuela. One doesn’t need anything more than a walk in the streets of Venezuela to realize what has become of the country. Now if one looks at the oil reserves the country has, one wonders what the country could have been had the omnishambled affair not taken place. The country sold its gasoline at 1$ a tank to the public (probably the lowest in the world) resulting in unimaginable loss of revenue. The mismanaged financial affairs of the country led to huge borrowings, so much so that for every three barrels the country sold, 1 went to repay debt. The currency lost much of its value since Chavez came into power and had to be revalued as much as 5 times ever since.

The man was considered a symbol of hope, the very embodiment of transition which the country had needed only to be later tagged as an outlandish actor who ruined a country’s economy only to retain dictatorship.

Sure he had that thing going for him.

7th March 2013.

 

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Budget 2013 – hits and misses

“Kalangathu Kanda Vinaikkan ThulangkathuThookkang Kadinthu Seyal”

(What clearly eye discerns as right, with steadfast will

And mind unslumbering, that should man fulfill)

– P. Chidambaram

As it often does, the budget has garnered its share of limelight. It has left in its aftermath, admirers and haters. Of course there have been a slew of comments from the opposition party, but then that’s considered usual. What was unusual or rather peculiar about this budget was the hope Mr. P Chidambaram had generated in his recent months as the FM. He has, in his defense, tried his best to meet those expectations. It was a rather bold step to ignore populism and go in for stability and fiscal consolidation considering the upcoming elections. However, on second thoughts the decision was probably his only way out of the current crisis. Had he not focused on raising revenues and fiscal deficit, the rating agencies would probably downgrade India in a jiffy. Would the consequences of the downgrades not be much worse?
Without going much into the details of the budget let me point out a few hits and misses.

The Hits :

1. Lowering STT and introducing CTT : The securities transaction tax was reduced from 0.018 to 0.010 whereas transaction in  commodities ( excluding agricultural goods) will be taxed at 0.01 percent. This shall garner collections for the government and infuse confidence in the equity market.

2. Targeting the rich : Following America, the FM has imposed a 10 percent surcharge on people earning 1 crore or above.  Limiting the above surcharge to only 1 year, he has cleverly avoided the wrath of the riches while ensuring that he gets the funds which he needs. Also he has made the high-end cars dearer by increasing the basic customs duty from 75 percent to 100 percent.

3. Women-oriented banks :  Such banks would be run mostly by women and would be catering to clients who are mostly women. The FM has tried to address gender disparity by bringing in such reforms while trying to promote the role of women in the business sector.

The Misses :

1. The Calculations : As the name suggests, it’s a budget. The budgeted figures and the actual figures can most certainly differ as it does most of the times. The math can go wrong since there are since a lot many assumptions are taken while preparing the budget. Although assumptions cannot be avoided, it should be ensured that the figured are adopted on prudence basis. In this case, the divestment target is certainly optimistic. Also Crude considered at 110$ per barrel while calculating fuel subsidy is a bit irrational.

2. Upcoming changes : The FM states that work on the Direct Tax code and the Goods and Service tax is in progress. The IFRS was conveniently ignored during the speech. All three are much-needed reforms the country needs in order to progress and the FM doesn’t provide anything in the speech to clear out the obscure future.

3. Taxing FII’s : The FM’s comments over taxing FII’s were not taken kindly by the capital markets. The Sensex and Nifty fell over 1.5 percent on the very same day. The FM and other officials clarified that tax residency certificates would serve the purpose and FII”s wont be taxed until GAAR but the damage had been done.

2nd March 2013