Janmabhoomi Vs Karmabhoomi

We live in embattled times, our cities have not only become melting pot of various cultures but battlegrounds drawn on linguistic & ethnic identities. The current happenings in Mumbai notwithstanding, modern India is on the move and the stress points are manifesting at its fissure points, our large cosmopolitan cities. Add to this the desperate Rajneetis of marginal politicians seeking vain attempts to draw political mileages and build vote banks and you have the fire ignited. 

Rapid Urbanization is drawing people from all sides and walks of life and my city Bangalore (aka Bengaluru ) which has been my home for the past 14 years is a perfect metamorphosis of this kind of transformation in Indian cities. Here I live without any fear of recrimination or any other baggage as I belong to the state & identify with its ethic culture. In a sense I live free of fear or favour. 

But I cannot say the same of a lot of my friends & acquaintances from outside the state who form ¾ of the city population. Though there is apparent calm and tranquility on the surface, most of these people live in mortal fear of recrimination as it happened in the case of the Cauvery water crisis or during Dr.Rajkumar (a noted Kannada personality & Film thespian ) death. 

I wonder what went through the mind of my neighbor, from chennai, when he had big pictures of Dr.Raj pasted on his front and rear glass of his car during a few days after his death. Minor trouble did break out during his funeral procession (allegedly engineered by a big time local politician) but thankfully it did not take any linguistic colour.

My thoughts are drawn to the hackney raised by KRV (Karnataka Rakshana Vedike) and that of MNS (Maharashtra Navanirman Sena) and patterns that follow a common diabolical agenda to attain political puberty and arrive on the electoral stage. Both of them appeal to the so called asmita or pride drawn on the rich culture and heritage of their respective linguistic domains. Both entities have conveniently found out that it’s not the upwardly mobile or the rich highly educated and cosmopolitan people of their community that find an immediate audience but the large mass of poor , under educated and marginal segments who wage a daily fight for their existence. 

And what better platform to voice this in the lower rungs of Railway recruitment Jobs! Railways after all is the mother of all recruiters in this country (read largest Govt recruiter). Both entities also took on popular film superstars & made them bow to their diktats. Both are fringe parties without any political base, KRV does not have even a single representative in the state assembly, and their agenda and manifesto is unique in the sense that it is not pursued by any of the main stream political parties. This gives them a virgin political bandwidth to drum up mass emotions on linguistic chauvinism. Both states incidentally does not have a regional party like Telugu Desam or DMK/AIADMK to root this kind of identity.

In Mumbai where certain professions are dominated by UP/Bihari’s like the Taxiwallas, chaatwallas or Halwaies , Bangalore exhibits similar patterns. Your neighborhood Ironman, Sweeper , domestic helper or office support staff could most probably be a Tamilian so as the likelihood of your neighborhood Bakery, Tea stall or Provision store wallah being a Malayali. I am drawing this on my common observation and is not meant to demean in any sense. 

In fact I admire and respect their sheer tenacity and hard work and find them glowing examples in entrepreneurism. But try explaining this to the local farmer from Mandya, a local who did not know any language except Kannada and came to work as a watchman in my apartment but was unceremoniously kicked out because he dint know Hindi and  could not converse with most of the people in the apartment! 

This is the kind of grist that keep the mills of KRV & MNS working overtime

The ICICI Conundrum

ICICI Bank has been active in public memory of late, be it the SMS’es,the advertisements or plain News stories. And all of it seems to be for the wrong reasons! The stock market crisis has been bad and particularly worse for the bank shareholders like me. The stock among select few got particularly hammered but of all the 5000 or so listed Cos, but ICICI has been a singular standout crying hoarse about a certain cartel of brokers and certain vested interests working overtime to pull the stock down.

This is not the first time the Bank has had this kind of problem, a few years ago it reported a ‘run on’ deposits in certain western parts of India due to similar malicious rumors. Is there anything about trading communities & business group activities that can be so detrimental to a particular Company. What could be the motivating factors?

ICICI has been a spectacular story in the Banking & Financial services space marked by a kind of aggression that you normally associate with few family run Indian Cos. Its transformation from a Corporate lending entity to a retail powerhouse has been swift and efficient driven largely by the vision and foresight of its enigmatic leader K.V.Kamath (KVK).

Actually it was a great place to work and learn too as I found out in my 5+ year stint between 1999-2005. What particularly stuck out in my memory was the incredible quality and tenacity of the top management whom I witnessed from close quarters. You got personalized response letters from the MD & ED on sending marriage invitation, you could regularly drive around the town with the Business Head (V. Vaidyanathan aka Vaidy,now country head) sitting beside you and discussing mundane business or directly correspond with them on crucial official matters .

I first interacted with KVK during a branch opening in Manipal sometime in 1999 where he spoke about brand building very passionately. And he was very consistent at that because he would pull down faulty glow-signs while traveling & chide senior officials in meetings when they made power point presentation with the wrong fonts.

Vaidy on the other hand was incredibly unassuming and approachable. One of his ex-colleague from a XIMB , a friend of mine had to tell me that he was not particularly an academic standout but had a certain X factor. In my interactions I could figure out that he had loads of work stamina just like his 40km marathons but more importantly had a good way of dealing with people. No wonder he zoomed through the progression curve & made it to the top without an IIM tag.

Another luminary was Chanda Kochhar who ushered certain kind of sensitivity to client engagements. When I was handling Infosys account, she particularly kept a tab on developments and made regular personal visits with me in tow to client.

However the scorching growth had its pitfalls . Overzealous collection agents messing up with customers or clients complaining of overselling (loans & cards earlier and as in the derivatives imbroglio later) were early indications. So were the ubiquitous ‘tele marketing calls’ that became synonymous with ICICI where every square customer in the retail market was systematically bombarded with carpet calls.

The branches too started getting progressively crowded and the services tended to be impersonal. Credit card complaints among other loan products started blipping on RBI radar frequently. Even the important securitization law had the ICICI stamp when it took Mardia chemicals to court and won.

In the meantime the crown prince-in-waiting Nachiket Mor gave it all up for non profit socially inclusion initiative role in IFMR. The Bank amidst all this has been undertaking a media blitz to project a more responsible and sensitive image and allaying unfounded fears through a sustained media campaign.

So a lot is happening on the ICICI saga and this may not be last you will hear on that front.

End of the free market era?

As I write this, the world is waiting with bated breath for the US govt to approve the bailout plan scheduled for voting tomorrow. World over stock markets have tanked and soothsayers have been active with their doomsday scenario. And the recent developments in the US financial markets which have been swift & dramatic have added to all this tumult. 

A Jurassic sized drama is being played out, Gargantuan sized companies going kaput & filing for bankruptcies, others being bought or sold in the marriage of Titans and the biggest of all, the US Fed reserve amidst all this drama appears in its bailout act as the benevolent Godzilla in the financial Armageddon.

Alan Greenspan may have termed this “Once in a Century Crisis” but he could well have sown the seeds of it during his tenure as the Fed chairman. His era of low interest rates spawned an economic boom that built up the Housing bubble, and the free markets fed on it with typical capitalistic carnivorous appetite that left several,now defunct Investment Banks & Financial Institutions choking with toxic assets. 

The moot point in all this “How did a systemic collapse happen in one of the most mature markets in the world? Where were the checks & balances in the system?”. Now I am speaking of a system that has given the world standard practices like SOX compliance, GAAP etc., ignoring systemic risks. Talking of risks, author & economist Peter Bernstein wrote in his book “Against the Odds’ how the financial sector has spawned a new breed of experts who make it a job to peer into the future and figure out the kind of risks that lie arrayed there. 

Didn’t they see it coming? or to be more precise, what were they doing when the so called ‘excesses’ took place? . Well at least you didn’t need an expert to figure out what would happen if NINJA (a type of low credit history customer with no income & job) class of borrowers were being financed by the system. All these kinds of assets went bundled as complex products and sold perhaps in search of new sources of profit. And the contagion spread, now threatening global financial markets.

The apostle of free markets, Milton Friedman had systematically built up a case for free markets that became the bedrock of US policies after the Great depression . Milton had argued for free markets that are devoid of govt interference by holding the case of great depression against Govt mismanagement. But today as the financial system chokes of toxic assets & slides into a very likely recession, the Govt in a U turn has swiftly gone about effecting bailouts, brokering deals and pursing for tougher regulations perhaps as anti thesis to Friedman’s views. Will the US of A revert to pre depression era laws signaling the end of free markets remains to be seen .

The Indian Road to Perdition

Almost every year after the monsoon season, a clichéd story unfolds on Indian Roads. A good season and the receding rains would have left behind scarred roads battered with potholes. Thereafter for some months and possibly until the next monsoons commuting becomes a part of one big Indian Jamboree . 

Imagine the narrow congested roads where motorists, bicycles, 3 wheeled rickshaws, the odd Tonga or bullock cart not to forget stray cattle and pedestrians forced to walk on the roads by hawkers on pavements, all jostling for their bit of space in a unruly manner and dodging the potholes at the same time!

Mofusil areas as compared to cities i guess bear a bigger brunt of this catastrophe. By the time, the Govt and local authorities respond with their elephantine inertia, the larger public would have resigned to their fate on the roads & would have gotten used to it. Usually the response mechanism or the remedy brought fourth is worse than the ailment, potholes filled with mud and loose gravel accentuates the pain by making the roads even more un-commutable not to mention the dust and dirt it raises to make it one hellish experience. 

For a country with the second largest road network in the world, over 3.3 million kilometres, & carrying over 40% of total traffic, it’s nothing short of monumental tragedy. Yet everything trudges on. By World Bank estimates, every year bad roads cost India about 3-4 per cent of its gross domestic product which was more than $1.3 trillion in 2007.

The Govt every year spends Crores of rupees through its I&B ministry educating drivers on how to drive steadily and save precious fuel. But the same authority is oblivious to the monumental wastage and; drain such bad roads bring to the national exchequer . Actually bad roads put a lot of strain on multiple systems and its cascading effect on productivity loses & wastage of resources could be running into billions of rupees. 

Lets begin with the simple laws of motion, when the traffic grinds to an average of 5-10 kms instead of the normal 25- 40 kms speed in cities, the frequent gear changes & breaking increases the average fuel consumption by at-least 25% - 40% across all category of vehicles. The slowing moving traffic means that the efficiency of a city’s traffic management system’s (measured in peak number of vehicles plying on road) also comes down. 

Add to this , the wastage on business productivity when people reach their workplaces late or business deliveries that fall behind schedule. Anybody who understand the concept of time value of money will comprehend the kind of loss I am talking about. Third, for inter city/inter state transportation , bad roads means vehicles arriving late on schedule and higher breakdown rates on road. The costs of rescheduling & maintenance of Govt run transport vehicles itself might run into several hundred Crores of rupees.

The opportunity cost of all this vis-a-vis a viable alternative or better road management solution does not seem to be on the agenda of town planners, state govts & the central planning commission. What is needed a comprehensive policy on surface transport mgt which lays emphasis on the uniform usage of standard road laying & maintenance procedures. 

Thankfully a trend has begun to surface in the Mumbai & Kolhapur municipalities, the former has successfully tried a ‘carbon core’ method of filling potholes which uses water as a primer & has been certified by IIT Mumbai and Central Road Research Institute as a durable option. The latter has decided to privatise the entire road infrastructure in Kolhapur city and award the maintenance and operating contract to a prominent Infrastructure Company. What’s unique about this model is that it won’t create any additional financial burden on the local citizens or authorities.