Bureaucrat : " Possible is nothing !!! "

After I witnessed a stellar performance by Abhishekh Bachchan in the movie Guru,I was confronted by some reactions like - "Oh well-thats what happens when you don't pay taxes- you have to face the laws".The protagonist is a villager turned entrepreneur who develops a massive establishment.In doing so he bends laws, bribes officials and even engages in frauds to evade duties.

What invariably most people think is the idea of a heartless,ruthless businessman who would crush or circumvent anything that comes in way of making profits.My friends opined that taxes and duties are necessary to safeguard the interests of the general public and that government tries to 'redistribute' wealth as a means to reduce poverty.They say that it nullifies the 'extreme power' that industrialists may acquire.But is it the right solution? No,in fact it aggravates the problem.

How exactly?The government draws wealth by means of taxes for the welfare of the poor.What one sees is that the money 'will be' used for betterment of poor.What one ignores is that the capital lost by the industrialist could have created a lot more jobs that would productively employ a good number of workers.Also whether the money indeed 'will be' utilised depends on the number of middlemen in the chain i.e. the bureaucrats.The imposition of duties are justified as a way to direct capital towards or incentivise 'needy' industries.The problem is that capital supply towards better performing industries gets restricted.

And it creates the very problem of power that it wanted to remove.Bureaucracy forms a barrier to setting up industries or for increasing production.So only the ones with might of wealth and influence pass through this barrier and command power.The more doors in the process, the more the guards and only those willing to 'salute' them or those with muscle power pass through them.Not only does this increase corruption but also reduces the wealth in the hands of those who actually set up the industries.This wealth would have otherwise been directed towards efficient production or towards employees.

What Gurukant Desai states in the movie is that this restricted form of system wont stop him from bribing bureaucrats if it increases the wealth of his company and its shareholders.The situation is better today than in the pre-1991 license raj but that does not mean that there aren't ways to improve it even more.The Economic Freedom Index ranks India at a lowly 104 below countries like Uganda,Swaziland,Oman,Peru etc.Easy setting up of business is the only way to increase entrepreneurship and reduce unemployment.The fact that more B-school grads now reject job offers to start their own venture is encouraging.Whether a conducive environment is provided for the same is crucial at this juncture when the economy is looking up.

Hope it won't take another economic crisis to wake us up.

I was there - 27 January 2007

And what a day it turned out to be!!!The last intra-college fest of engineering and the most memorable one too.Our class of BE Computers won the shield hands down by a whopping margin of over 100 points.The awesome show of united strength was incomparable.Losers went green with envy, sulked, abused but that didn't dilute the effort.Nothing could drown our voices as we screamed "BE COMPS" and the campus reverberated and it will continue to resonate in our hearts forever.
Unity,thy name is BE COMPUTERS 2007!!!

New Fevicol advert

Hilarious as ever !!!

Thud !!! Someone just threw Freedom of Choice in the dustbin

Politicians dont like to keep anything out of their scope of influence.So what do they do in areas where they should not have intervened - they act as "guardians".They poke their noses in matters of individual concern.The latest instance of such "activism" is the banning of a TV channel AXN for airing supposedly "objectionable" content.
(See:The Times of India)

This interventionist attack by the self proclaimed moral police on the rights of a free media comes on the back of action against blogs and websites like Orkut,YouTube and even smoking and bike scenes in films.The government tries all it can to be "remembered" in the minds of the public.While it fails to protect children against serial killers and child labor it tries to take the center-stage as their messiah against "objectionable" content.But what is offensive cannot be determined in quantitative terms , there cannot be a numerical threshold above which something is classified as obscene.It fully depends upon the individual and unique as we are there are numerous ways of interpreting the same content.

And of some who actually find it offensive there are "overenthusiastic" individuals like Pratibha Naithani who will go all lengths to force their opinion onto others.India is certainly not lacking in other such publicity hoggers.Only if they knew that the remote control for their TV is in their hand and so is the option to change channels or switch it off.How will such people feel if we were to block off their favorite channels just because we find it obscene?.

So what happens now is :
Mr A : I want to see a movie xyz.
Channel B : Hey , I have it.You pay up and I will show it.
Mr A : Thats great , here's your money.
Government , Moral Police : Wait, I want to have my say.I think i will block Channel B coz i think movie "xyz" is obscene for the children of C,D and E - so it will be bad for u too.
Mr A : But i dont have any children and i am adult myself.
Government , Moral Police : Just stop complaining and thank us for this wonderful service that we provide(by paying taxes).

The simple solution would be to assign an age rating to the content(this is already done by Star Movies - which i haven't been able to see courtesy the moral police) which can act as a guide for parents to choose programs for their kids.An the parent can then use child lock or in case of CAS - just unsubscribe.

This Vulgar Display should stop - Vulgar Display of Power that is.

Don't Leave it to the Government

In a recent speech Narayana Murthy suggested that capitalism is the only way to alleviate poverty, however it should be 'compassionate' capitalism rather than a hard nosed approach.He even went on to suggest increasing the corporate tax from 30% to 50% to fund the development of the poor.And even though the intentions are to lessen to reduce the suffering of the poor, the results may not be the same.We have always seen how the government inefficiently utilizes tax-payers money.

An excerpt from Milton Friedman's speech so appropriately conveys this:

The difference between the government sector and private sector is not in the people; it is not in the incentives.It is in what it is in the self interest for different people to do.In the private economy, so long as we keep a free private market, one party to a deal can only benefit if the other party also benefits.There is no way in which you can satisfy your needs at the expense of somebody else.

In the government market, there is another recourse.If you start a program that is a failure and you are in the private market, the only way you can keep it going is by digging into your own pocket.That is your bottom line.However, if you are in the government, you have another recourse. With perfectly good intentions and good will nobody likes to say "I was wrong" you can say, "Oh, the only reason it is a failure is because we haven't done enough.The only reason the program is a failure is because we haven't spent enough money on it."

And it does not have to be your own money.You have a very different bottom line. If you are persuasive enough, or if you have enough control over power, you can increase spending on your program at the expense of the taxpayer.

That is why a private project that is a failure is closed down while a government project that is a failure is expanded.

On the same day I saw a typical government ad (with ministers, party etc boldly mentioned) covering generous ad-space, proudly announcing the "resurgence" of a sick chemical fertilizers public company at the cost of some 400 crores.What one does not know whether the reasons for its failure have been thoroughly ascertained before revival.The large amount of fund lying underutilized by the BMC are signs of their inefficiency.

And so i think industrial philanthropy (and taxes - though they are mandatory) through government wont have equivalent results.A much better method would be education, training and employment of the poor by the corporates themselves i.e. training poor kids with a view to employing them in the same company for future.

"Empowerment" through opportunity and not "Empathy" through donations is what is required.

Organised Overreaction

As Saddam Hussein hanged at the year end it was followed by expected protests in Iraq and the Middle East.But what was surprising were the violent revolts in parts of India.Agreed that the trial was rushed through and the general impression was that the US were desperate to see Saddam hang, but that certainly does not justify the senseless violence that happened in India.
(See:Alertnet)

The protesters went on a rampage, stoning stones and vehicles and destroying property (which of course did not belong to them).People and policemen were hurt in the clashes.The police deployed to control them could have been used for a better purpose if not for the mindless actions of a group of people.
The Left, Samajwadi Party(SP) and other parties organised anti-american protests as was expected.But SP workers threw stones at tourist buses in Agra harming innocent tourists (some of whom were from Goa which has a sizeable Christian population)which is certainly not justified.The SP workers also clashed with traders over closure of shops.Why should some shopkeeper be stopped from earning his livelihood and bear the brunt of this anger?
(See:The Hindu)

We never see any public reaction leave alone protests in other countries when bomb blasts and terrorist attacks happen in India.Why should we react to incidents in other countries and self-destroy ? That too when the affected isnt even an Indian. When an Indian engineer K.Suryanarayana was killed in Afghan or a truck driver killed in Iraq the only protests were from their family members.Where were these people at that time?

Be an Indian first and Anti-American or Pro-Iraq or Pro-Iran later.

Nike Cricket Ad - 2 gone , 1 more to go

Observed an interesting thing about the Nike ad on Indian Cricket that airs frequently.It features Kaif - ousted before the tests against South Africa , then Pathan - sent home between the tests and Sehwag - who is likely to (and should) be shown the door after the test series.