Zooming Sensex

The Sensex more than just zoomed. It hit the upper circuit twice. Trading was halted for the day around noon.

Up 2100. Great sentiment all around.

This is the easy part. The next 5 years are what matter.

The UPA Home Run

What a season. It is curtains to the Great Indian Election Spectacle. And what a result. UPA hit a home run. And things look a lot more promising....

Some points to ponder.

First - Congress + BJP are over the 300 seat mark. Not bad. To me, it was important that the sum of seats of the country's ideological contrasts represent over 50% of the total number.

Second - the inclusive growth story continues to make inroads. A lot of analysis will come through in the next few weeks on why UPA won. To me, it was simple. Ask the person next to you on how the past 5 years were. Even if he were NOT to say 'Great', chances are that a good number would say 'Good' or 'Not bad at all'. This positive feeling HAD to rub off at the hustings.

Third - this election once and for all buried that much maligned term 'anti-incumbency' as if we voters were a bunch of morons who vote off parties just because we do not like their faces. Performance is always rewarded. Just ask the three-termers, Sheila Dixit in Delhi & Naveen Patnaik in Orissa.

Fourth - To continue on the previous point, Dr. Singh was truly King. It is amazing to see the goodwill this soft-spoken man enjoys. His firm stand on the nuclear deal won him admirers. And when word came in today that Montek Ahluwalia is his preference for Finance Minister, a lot more folks cheered. Montek may not get the post after all. But it is heartening to see the direction.

Fifth - economic reforms hopefully get accelerated & the current mandate gives the UPA a lot more room to maneuver. We need a lot of more years of 8+% growth to take us into the next league.

Last - I hope the extreme left & right undergo a course correction. They have become too ideological, to the discomfort of many. Moderation always helps and so does inclusiveness. A vibrant & principled opposition is what people need. Nothing would make me happier than to see a rejuvenated BJP ask cogent questions & put up a vigorous debate.

All in all, this has been a season of plum pickings. The Sensex will zoom tomorrow. But what matters is that the government takes the right steps so that the country zooms through 2014.

From Meet The Press this Sunday

Doris Kearns Goodwin & Jon Meacham in Meet The Press on Obama's First 100 Days....

Visit msnbc.com for Breaking News, World News, and News about the Economy

My Path to Sustainable Development

While I love to say that I like to ramble, one of the aims of my blog has always been to stimulate discussion on the outlook towards right governance & appropriate political philosophy among like-minded folks. My youth was spent in concluding that the political class for the most part is useless & a government free of corruption is the solution to all ills. If you think that this seems to be another arrow in my quiver of incredibly botched logic, you are not wrong. Believe me, I have a great track record on this front.

My approach gradually changed over time. Gone was the idealism. In came an attempt to look at things in a more nuanced manner. A realization that all ills are not equal and that there is no silver bullet. That sustainable development involves doing several things simultaneously. And the conclusion that the solution does not have to be perfect the first time. What is needed is the will to make a difference. And the will to make a start - somewhere.

Not a day passes goes by without me thinking that a lot of us have been incredibly lucky. We have been provided good education, landed cushy jobs, and have advanced professionally, financially & personally. We are blessed with a wonderful support network of family & friends that help brighten & enrich our days. Though I have no objections to furthering our own personal cause, I believe it is also important that we take some time to think about the uplift of the fellow citizen. And his path towards development.

I am a die-hard capitalist. I believe in open markets and free trade. I cheer small government & low fiscal deficits. I espouse the cause of the private enterprise in finding meaningful solutions. I am to the “right of centre” when it comes to economic philosophy. At the same time, I do not believe that the government is the problem. Government has a role. To protect its citizens. Establish property rights. Define the rule of law & enforce it. In a country of 1.1 billion, this in itself is a large ask. Let the government truly do this well.

This might be inconsistent with my previous blog where I espouse sustainable bottom-up rural development. Not at all. I still believe that bottom-up development is the way to go. In a country as large as ours, it is unfair to say to 400+ million that the benefits of the economy will ‘trickle down’ to them in 10 years and that they have to patient until then. Try telling that to the family of a farmer who has committed suicide because his todays were becoming unmanageable. Try telling that to a new parent who knows that if the child does not get into school in 5 years, its future is compromised.

Where I differ from the socialists is that I do not think that bottom-up development has to be actively managed by the government. Let the government limit itself to setting goals and laying clear markers. Let it be a facilitator of finance when required. Let it be an enabler towards the definition of a measured framework. And importantly, let it enforce the rule of the law that preserves this structure.

The management of development must be in the hands of the individual or a group of individuals. They may decide that the solution to sustainable development may lead through cooperatives (think Amul). Or non-governmental organizations. Or include innovative approaches such as micro-finance (Grameen Bank, Kiva, SKS). Or involve the private sector (ITC e-choupal). The means do not matter as long as it is best left to the individuals to make that choice. In short, I call for an approach that provides the key to one’s destiny in one’s own hands. Self-confidence is a force multiplier.

What do you think? Is bottom-up approach to development that espouses free market principles and minimal-to-none government involvement the way to go? Or does the government have to play a role? Or do you believe that the top-down capitalist approach is the ideal choice? You know where I stand. I would love to hear your side of the story. Post a comment or send me a note.

Bottom-up or Top-down?

An article in Business World several years ago had 2 Chief Ministers on its cover. One was Chandrababu Naidu, then CM of Andhra Pradesh & the other was Digvijay Singh, then CM of Madhya Pradesh. Chandrababu's model for growth was top-down. Promote and seek investments in the capital city, Hyderabad. Use the proceeds from the development initiatives to spur investments through the rest of the state. Digvijay Singh followed the opposite approach. Work towards social & rural development initiatives (bottom-up) - and the growth of the state would follow. Both Chief Ministers were good at what they did & won re-elections on the platform of development.

Don't get me wrong. This does not mean that neither leader promoted one over the expense of the other. What it does mean is that when you have finite funds for development, you need to make a choice. And the sector/area where more funds are deployed ultimately determines your overall track record & governing philosophy.

My sense on the NDA was that it tried more of the top-down approach during its period in office from 1999 to 2004. And its 'India Shining' campaign ultimately fell through because the fruits of development did not quite reach the rural folk to the extent required even after 5 years. My sense on the current UPA government on the other hand, is that it has followed a policy that has been more pro-rural. We will know whether this approach has worked when results come out in a month. At this moment however, the UPA seems to be better positioned.

And here is an article on the Wall Street Journal today that dwells on this thought.

Have a great weekend.

The Evolution of the Polity

It is election fever in India. Not all of them are impressed. Some of my friends have threatened not to read my blogs if I am going to write too much about elections. One of my overseas friends jokingly said "Why couldn't they play cricket in India and export elections to South Africa?"

What can I say? For a person who tuned to CNN as the first channel he ever watched when cable TV came to his home over 14 years ago, who watched every Indian election with fascination and anticipation since 1990, who was thrilled with his timing of landing in the US in April 2000 because the Presidential elections were just round the corner, who stayed up late in 2004 to watch Kerry lose Ohio, and who woke up at 6 AM India time in 2008 (I usually wake up after 8) to watch the live coverage of the results of the US presidential election, not thinking of elections is just impossible.

As an active observer of Indian elections for nearly 20 years, I am struck by how the 2 party system in India has gradually given way to a multi-polar structure. As the BJP rose in prominence in the early 90s, the chatter was about the 'irrelevance' of the Left parties in the future. We imagined the 'era' of coalition governments to be temporary & that the polity would be clearly cleaved into 2 contrasting ideologies - the Left of Centre (Congress) and the Right of Centre (BJP).

But regional chieftans had other ideas. Mayawati & Mulayam hold fort in UP. Nitish Kumar, Lalu & Ram Vilas Paswan control much of Bihar. Naveen Patnaik is the gentle giant in Orissa while the Buddha continues to smile in West Bengal. 20 years ago, the seat sharing formula in Tamil Nadu was simple. Congress will contest much of the Lok Sabha seats while its Dravidan partner will contest much of the local Assembly elections. And both parties won. Today, the Congress must consider itself lucky if it could cross 10 seats in TN, UP & Bihar. And the outlook for BJP is no better.

The slicing & dicing of the electorate is now a fine art. We may cringe when western media outlets report on the caste system in India & consider the opinion as biased. But there are folks in India who want to keep the 'caste factor' alive. And they aim to please this small sub-set. And 'lock' the vote. Parties that aim to provide a pan-India perspective notice see their traditional support being chipped by these usurpers.

All of this is fascinating. And to an extent, worrisome. While plurality is always welcome in democracy, one also knows that too many cooks spoil the broth. It took Benjamin Netanyahu over a month to form a government in Israel. The top 2 parties in Israel today hold 55 seats. And the total number of seats in the Knesset? 120. We could be in a similar situation in India when the combined total of the 2 national parties that are on the opposing sides of a spectrum falls below the half-way mark (270).

It is my wish that whatever be the rainbow coalition that will be cobbled by the end of May, it lasts 5 years. Stability is the key to economic growth. And to a lot of other things. Elections are indeed fascinating. And they keep the junkie in me awake all night. But they are so only because they occur every 5 years. Let us keep it that way.

Durable Election Time

Election: noun: A wonderful season playing right now in India

The TV channels have the countdown clocks prominently displayed. Leaders zig-zag the country addressing rallies and making promises. And of course, spend lots of time cobbling up alliances that they call durable. Webster.com defines durable as 'lasting'. Before we know it, the alliance hits a 'bumpy patch'. There are 'differences' over seat adjustment. Soon they become 'irreconcilable'. Finally, the alliance 'breaks down'. And a 'New Front' is in the making. I guess durability in these days refers to that lovely pristine medium where the alliance lasts only until the differences cannot be managed???? "Of course", say the spinmeisters, when they come back to the television to justify why the alliance broke down & adding "we have no problems going it alone".

The shifting meaning of words over time is very confusing to blokes like me whose grammar is still based on Wren & Martin written decades ago and whose knowledge of varied English words, including 'durable', solely came about by playing book cricket for hours with the Oxford Dictionary. We scratch our heads. And wonder how it all adds up. We are even OK with 2+2=5. But the value of the permutations and justifications and the calculations that we are presented every day is as volatile as the BSE Sensex has been for the past 6 months.

Mind you, not a single vote has yet been cast. And it is a wonderful season.

We hear these terms in various fora. Pre-poll alliances; No-alliances-but-seat-adjustments; No-alliances-or-seat-adjustments-but-we-will-not-put-up-our-candidates-against-them; No-alliances-or-seat-adjustments-and-we-will-put-up-our-candidates-against-them; I-did-not-get-a-ticket-and-I-will-contest-elections-as-a-rebel-candidate; He-did-not-get-a-ticket-and-he-will-contest-elections-as-a-rebel-candidate-but-our-candidate-will-thrash-him.

Did I say that not a single vote has been cast? The wonderful season is in full bloom.

TV channels ask "Is it important for a party to project a candidate for PM?", "While the party has a candidate for PM, is he actually a cover for moving someone else after the elections?", "How much leverage will the constituents of the Third Front have in the choice of the PM?", "Is the Era of the national parties dead?". Various talking heads give their perspective. We try to understand the logic - and when we can't, we try to fit logic into their words. When even that fails, we switch channels. Only to see a new talking head.

Not one vote cast yet. It is a great season.

Elections will begin. Different states go to polls in different phases across several weeks. Exit polls in each phase will analyze trends. We will look at gizmos on TVs that slice the electorate & dice it into meaningful chunks. We all will look forward to that magic number called 'Majority'. Talking heads will multiply. Politicians will coyly indicate that 'Exit polls are meaningless' and 'we believe our internal numbers are stronger than what you are showing'. Business folks & economists will now say that the long-term story of India is intact and that regardless of the electoral results, India will clock a 6% growth rate for another 20 years. The stock market will look at all of this. And will go up and go down. Experienced analysts will say that such volatility is to be expected in times like these.

Votes have been cast. The season remains lovely.

The counting of votes will begin. Since all voting machines are electronic in India, the results will be out in a few hours. No surprise - we will not have a single party majority. Talking heads will increase exponentially. Meanwhile, an independent MP who no one ever knew before will suddenly find himself feted. "I am evaluating all options", he will say. "When will you decide?", the reporters will ask with bated breath. His enigmatic reply - "In due course". The caption "IN DUE COURSE" will be carried on all channels under the banner "BREAKING NEWS".

An alliance will soon be cobbled. The architects of this alliance will coo that this is indeed the Durable One. "Until differences persist?" we ask. "What differences? The media is playing it all up", they will say.

Suddenly, it will all be over. The anticipation of result. The thrill of crowning a victor. The commiseration we extend to the loser. Parliament will convene. The Prime Minister & the cabinet will be sworn in. And we will get on with our lives while secretly waiting another 5 years for more such exciting times.

What will I do till then? Didn't you know? The new edition of the Oxford Dictionary is out. In the interest of understanding 'durability', it is time to play book cricket.

Fallout at General Motors

Rick Wagoner, the CEO of General Motors, has been ousted. The latest casualty in the current economic saga of approaching the US Federal Govt for helping in the bail-out of the private sector.

I was just commenting to one of my friends a few hours earlier that while I was generally comfortable with the bail-out of the financial sector (including AIG), bailing out Detriot was something else. Not trying to save (temporarily in some cases) AIG and other financial firms clearly had the risk of a global meltdown (see Carol Loomis). I also have no doubt that the ripple effects of the fall of the American auto makers will be profoundly felt (including in my former home-state of Michigan). But the fact remains that there are better managed and more efficient companies to drive the industry forward when we all come out of this horrendous economic mess (yes - we will come out; after all, nothing ever lasts). I am not talking just about the Japanese. Even Ford has been making a number of much required changes for some time now.

Make no mistake. Rick Wagoner was a very good executive. Alex Taylor mentions this in Fortune - and some.

The markets may not like this. The Dow is down as I write. Asian markets fell today. But no one will doubt that GM's existence, at least in its present form, was clearly untenable.

Taking Ownership & Interesting Takes

Reading Peggy Noonan columns. Guess this is what owning up means. And Jim Hoagland in the Washington Post has this interesting take.

The Difficult Part of a Blog

I am amazed at how much some folks write on their blog every day. I am not talking about professional bloggers; it is the content generated by the 'go to work in the morning & blog when you come home' crowd that fascinates me. I was going through a blog of an acquaintance recently. He has been fairly regular over the past 3 years and I noticed that he had not added much in a month. And a comment on his site mentioned that he probably had a writer's block. I thought about it, and truly empathized with him. I go through that quite often :-)

But what is more difficult, at least according to me, is getting the design of a blog right. The current avatar of Random Thoughts went through multiple iterations. Colors, fonts, icons, links. And my reaction? See below.

So, at least for some more time, I think I will quit worrying about layout and think about writing.

Now for some other stuff.... Been catching up on past issues of Fortune over the past 3 weeks. While I am a regular subscriber, issues go unread for a few months, esp. if I am on to something else. Reading articles on the scale of the current global economic crisis stun me. Who would have thought that a toxic mix of financial shenanigans, reduced savings, excessive leverage and the willingness of some nations to continue to fund this disparity by buying American debt would lead us to this mess? While there are many articles that point fingers on who must be blamed, I would submit that the past 4 years is a bad example of universal global greed in play. The recovery will be long, tough and painful. Hopefully we will all have learned some good lessons.....

Read here about the collapse of Bear. And this was interesting as well. Note for posterity: Been reading some articles about Peter Orzag (Director, OMB). I think the world will see more of him one day. Meanwhile, the Indian market has made some good gains recently. I was personally disappointed. Stocks I wanted to buy got expensive. Grrrr.....

In the next blog, I'll talk about the Indian economy & the elections round the corner. Until then, adios.

New Beginnings

Priya asked me the other day "Are you on Facebook?" Duh !!! I am bad enough keeping track of what I have on my plate, and do I need to add something more? Quite confident that hers was a passing question, I just said No. And I expected her to drop talking about it. After all, she is quite content not going on any of these social networking sites. How wrong I was? Before long, she was spending hours. She showed me the 'wall'. She got a kick out of connecting to so many of her past friends. She was happy being online. Damn !!! all along, I thought I was the one who should be on the internet the most.

Anyways, tough times don't last forever & tough people do. So I decided to come back. To my Blog. It has been ages. And yes, I was expecting the counter to still be a measly one. It was.

Quite a number of things have happened since I last popped in. Lot of hair on my forehead has disappeared. Moved into a new home and loving it. Made new friends. Reconnected with others. Started gym-ng (Nope - did not add a pound). Did new things at work (yes - moved beyond screens and charts.) Thanks to some like-minded folks, I was inspired to read books. The big ones... you see, the ones that are about 500+ pages long which tell you to do things which you never know you will, but still keep on reading in the empty hope that you will do them some day. And for a change, I finished them.

Got into the stock market. Burnt my fingers. Am licking them, but am hooked to buy more. You see, Warren Buffett inspires me. But that niggling thought persists.... he was right for the past 40 years, and what if this time it does not pan out the same way? Priya asked me the other day "I never ask how much you put each month into the market. How much have you made so far?" I explained to her that investing in stocks was a 20 year plan & the fund is more for our retirement and golden sunsets. "How much have you made so far?" she repeated. I explained that in these depressing economic times, one does not talk profits, but how many more units can be bought at a lower price. I heard "How much have you made so far?" for the third time. I replied "I have lost less than the 55% market fall over the past 12 months". She was silent. For 2 seconds. And then said the most ominous words I have ever heard "You can live for the golden sunset. I live for today. Since you are allowed to lose money in the market, I am allowed to double my shopping budget from now". Grrrrr. My retirement age just moved up 10 years.

That is it for now. Next time, I promise there will be more pictures.

Cheers