The New found business : Microfinance

Microfinance is a provision by which funds are made available to poor people. Its aim is to provide service to those people who are away from the main stream banks. It started as philanthropy but is slowly gathering commercial ground. The idea was discovered by Nobel Laureate Mohammed Yunus, three decades ago. The purpose was to improve the standard of living of low income groups. Nearly 70% of India’s population is untouched by formal banking system. A great business can be sensed here. Around 2500 microfinance institutes(MFI) exists in the world. They provide funds to those low income group who have entrepreneurial spirit. The funds are made available at low interest rate. Also no collateral is given for the borrowed funds. Flexibility of payment the main point of attraction. This initialization have saved many poor people from the harassment by landlords. The modulus operandi is very unique. Altruist make funds available. The group of people come together to form Non Government Organization (NGO). The NGO establishes its branches in the rural places where the funds are not easily available. Now the platform is set for distribution of money to the needy.

Five financial institution are coming together to form MFI. The move is made to tap the lowermost section of the society. Joint venture parties includes Life Insurance Corporation, IFC(a world bank wing), National Housing Bank, Standard Chartered and Union Bank of India. The new entity will be called as Financial Inclusion Corporation of India (FICI). From the past experience of being successful in funding scarce pocket of the economy, the FICI is formed to operate more efficiently and more effectively on the national scale. The successful operation of FICI will abolish the income inequality in the society. This will increase per capita income of the nation and hence raise few more million people above the poverty line.

Philanthropists have progressed the microfinance sector to its current level. Now it the turn of private sector big players in finance sector to drive the microfinance sector ahead and make it the part of the mainstream.

Indian Subcontinent after 61 years

Indian SubcontinentINDIA WAS divided in 1947. Sixty one years have passed since then, but still the countries of the subcontinent especially Pakistan, India and Bangladesh have still not been able to deal with their internal problems and security issues. British divided India into Dominion of Pakistan and Union of India before leaving the country. This was done in accordance with Jinnah’s two nation theory. Jinnah’s two nation theory was based on separate countries for Hindus and Muslims. There was support and opposition of the partition, but many believed that was the best way out. The partition led to violence and riots and millions of Hindus and Muslims migrated to the country of their choice. Based on 1951 census of displaced persons, 7,226,000 Muslims went to Pakistan from India while 7,249,000 Hindus and Sikhs moved to India from Pakistan immediately after the partition. The province of Bengal was divided into two separate entities of West Bengal belonging to India, and East Bengal belonging to Pakistan. Pakistan was declared an Islamic state while India became a secular state. There was no denying that partition was based on hatred and this is still imprinted on our minds. Kashmir issue has been the centre of problem between India and Pakistan. The issue has led to many wars between the two countries.

Pakistan, a nation which was formed after the partition, moved towards fundamentalism. It surprises me that in the last 60 years, Pakistan has took keen interest on happenings in India rather than looking after itself. This led to unrest in East Pakistan, which launched a language movement in 1952 to declare Bengali as national language. Dominion status was rejected in 1956 in favour of an ’Islamic Republic within the Commonwealth’. Attempts at civilian political rule failed, and the government imposed martial law between 1958 and 1962 and 1969 and 1972. The government was dominated by military and oligarchies all rooted in the west. Significant amount of national revenues went towards developing the west at the expense of the east. The people of the eastern wing began to feel increasingly dominated and exploited by the west. There was violation of human rights in East Pakistan and the people revolted against the dictatorial regime in 1969. Thus Bangladesh was formed in 1971 and became an independent state after Pakistani army surrendered to India after 1971 war.

Thus we had three nations formed from one and their present is somehow dictated by happenings on the other two. Bangladesh was formed with an intention to create a secular state but the fundamentalists and politicians gave up this idea and declared Bangladesh as Islamic state after eighth amendment in constitution in the year 1988. The situation worsened for non Muslims in the country and large number of people fled from Bangladesh to India. The religion is still one of the major political issues in all the three countries. But there is no denying that India has done well to large extent. The sovereignty of the country is based on the equality of the people in terms of rights. India has been successful compared to the other two. In fact, I will say that the other two nations have failed miserably.
One thing that India has done and Pakistan has been unable to do in all these years after formation, is build sound democratic structures. It is these structures, be it the judiciary, legislature, our electoral system or the media, with all their faults, which have ensured that we don’t stray from the path of democracy amid tremendous challenges. Pakistan on the other hand, which has had a few flings with democracy, mostly sham ones, have repeatedly reverted to military dictatorships, when the democratic experiment failed. No wonder even after 61 years, Pakistan is yet to inculcate the democratic ethos and has allowed no democratic institution to flourish. This took a toll on the economy of the country as well.

The biggest tension that is mounting between the subcontinent countries is that of terrorism. Pakistan has constantly supported and funded the terror organisation in Pakistan occupied Kashmir. Bangladesh has also opened the gates to terror outfits lately. India is surrounded by two states whose credibility on the fight against terror are questionable. Pakistan is the country that is almost universally identified as constituting the most serious active threat to our national security.

India is on the path to become a superpower. Even the world acknowledges the progress that our country has made in these years. Clyde Prestowitz, president of the think tank Economic Strategy Institute said that India can become the superpower in 21st century. He also said that we need to maintain a constant focus on the problems that we, as a nation are facing. We still have to work very hard to ensure social-economic development of the people from all the sections of the society. The fruits of development should be shared by one and all. The problem of internal threat should not be neglected.

At the same time, we need to refrain from communalism as that can be the biggest hindrance in the path of the development of the nation. Love for one’s country does not vary in degree from person to person nor it is distinguished by caste or religion. Loving one’s country is a universal feeling. The fundamentalist will try to fly the flag of religion as it has been the easiest way to crust the spirit of humanity. This is applicable to both Hindus and Muslims in our country. We should not have repercussions in our nation of something, which has happened in other parts of the world. One must strive hard, contribute and participate in the revolution that will witness the emergence of India as a superpower.

India Starving on Mountain of Grains

The economists have predicted a growth rate of over nine per cent for India in the years to come. It is heartening to see that we are making progress. But one thing that I am unsure of is the implication of this growth rate.

Statistics and numbers are like mini skirts; they reveal a lot but conceal the significant bits. And the same is applicable to the growth rate story. There is no denying that in the last few years we have made substantial progress in many spheres, but the development has been concentrated in urban areas and the beneficiaries are those who belong to the elite group.

StarvationAgriculture, which supports more than 65 per cent of the population, is growing at the dismal rate of three per cent. India ranks 94th in the global hunger index according to a report released by the Washington-based International Food Policy Research Institute (IFPRI). India’s score is 25.03, compared with 8.37 for China, which is 47th on the list. Libya tops the list with a score of 0.87. Between 1981 and 1992, India’s score fell from 41 to 32 and then to 25 by 1997. This means that India has stagnated and has failed in feeding its poor in the last decade or so.

India claims to be a food surplus nation, which is true. Yet we feature amongst the hungriest nations. The ‘credit’ for this paradox goes to the change in the food policy of India in the early 1990s. At that time, the government of India decided to increase the price (or decrease the ’subsidy’) of grains and commodities in the public distribution system (PDS – the ‘ration shops’). It had two consequences. One, it made food out of reach for the poor. Two, it made India a food surplus nation, since those, who require it badly can no longer afford it.

The government presents a beautiful picture of the country, that we are a developing economy which will overtake China in the next decade and become a superpower. No issues with that. But one should be true to one’s assessment.

With the inflation soaring at 11.5 per cent, the life of a poor man has become more miserable. The people in villages (barely few hundred kilometers from our financial capital) have not eaten vegetables for the last few months. The adults have literally given up eating at night. This is perhaps the story of every household, which depends on daily wages or meager monthly incomes.

India also has the distinction of being home to the largest number of malnourished children. Child malnutrition is a leading cause of child and adult mortality. It is estimated to play a role in about 50 percent of all child deaths, and more than half of the child deaths are caused by malaria (57 per cent), diarrhea (61 percent) and pneumonia (52 percent). So we are failing to feed our children as well. What exactly does this growth rate imply when considered in accordance to the fact that the majority of the population of our country is unable to secure their daily bread?

Recently, the reply to an RTI (Right to Information) appeal filed by Dev Ashish Bhattacharya said that over 10 lakh tonnes of food grains worth several hundred crores of rupees – which could have fed over one crore hungry people for a year, was damaged in the godowns of Food Corporation of India (FCI) during the last decade. The damages were suffered despite the FCI spending Rs 242 crore to prevent the loss of food grains during storage. Ironically, another Rs 2.59 crore was spent just to dispose off the rotten food grains. Isn’t this a ridiculous situation where you waste your food grains – which could have supplied food for millions and on the other hand you cite the shortage of food and raise the price of grains 2-3 times in a span of few months.

I sometimes wonder what these policy makers do when they have failed to control inflation, food management, hunger and malnutrition. Their policies have just made the life of the poor even more pathetic. Yet they claim that we are growing at the rate of nine per cent!

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India has no credentials to pontificate!

The disparity between the two sides of India is appalling, to say the least. One side is witnessing sky-rocketing growth, while the other side is ebbing away. The India of today needs to be transformed into a powerful ‘people’s India of tomorrow’.

Poverty in IndiaRECENTLY, FORBES came out with a list of the richest billionaires in the world. For the first time in its history, four Indians figure amongst the top ten. The rankings clearly show that India is a dominating player in the world market and India is where all foreign investments are headed. Another set, which ranked the dirtiest cities of the world featured Mumbai and the national capital New Delhi. These contrasting rankings made me wonder which way the real India is headed.

On one hand, India is the fastest growing economy in the world and on the other it is still one of the poorest countries of the world. On the one hand, we have the ‘Incredible India’ campaigns running all over the world particularly in America and the UK and on the other even our best cities are among the world’s worst. On the one hand, we complain of racism whenever we migrate to the western countries, but here in our own backyard, the Biharis and migrants from Uttar Pradesh are being driven out of Mumbai and the rest of Maharashtra. The graph of India resembles a periodic sine wave where highs as well as lows occur periodically.

Take the tourism industry of our country. Cleary, if you were to go by advertisements then India is indeed a heaven on our planet. But when foreign tourists visit a city even in modern Goa, we cannot guarantee security; the chief minister himself admits that foreign tourists should be careful in Goa. Every state in India has come up with its own promotional plans to woo the foreign tourists. But whenever foreign tourists visit India, they get a bit anxious about their own safety.

This is one of the most beautiful places in the world – the unexplored regions of the North East, the backwaters of Kerala, the cold desert of Ladakh and the enchanting Ajanta Ellora caves in Maharashtra. But where is the infrastructure to take the tourists to such places? Thus every visitor has lots to say about nature’s delight but always adds, “if only the government had done a bit more for the tourists!”

None of the Indians should ever complain of racism, for what we face in our country is much worse than racism. A young Dalit boy is beaten to death for drawing water from the same well that the upper castes draw water from. The number of backward classes has increased since independence and exploitation of the people on the basis of caste is prevalent in almost all the rural pockets of our country. In Mumbai, the most developed and the most modern city of the country, migrants from different parts are beaten up and driven out – all because they have migrated from a different part of the country.

Why should have Mahatma Gandhi complained when he was thrown off the train at Petermaritzburg station in South Africa when apartheid was in vogue? Almost a century later, migrants from Uttar Pradesh and Bihar are being beaten up in trains by the goons of a political party. And make no mistake: Raj Thackeray is a very shrewd man; he is following in Bal Thackeray’s footsteps, though he plans to go further. The problem is that Maharashtrians have a history of capitulating to such theatrics. Dividing the country on the basis of caste, religion or now region has become the political mantra not just in Maharashtra but also in many of the states in India.

In the budget presented a few months back, Chidambaram gave away largesse worth Rs 60,000 crores to the suffering farmers of the country. A few days later, a village in the suicide belt of Vidarbha wants to sell itself off, for, the FM’s money cannot benefit it. Debt waiver is for marginal and small farmers, with less than five acres of land. But, in this village, most of the farmers have land-holdings in excess of that, at least on paper.

Jesus once said, “ To those who have, more will be given and those who have little, even whatever they have will be taken away from them.” Probably this is applicable to the people of our country where the gap between the rich and the poor continues to widen.

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Inflation and the stupid Economist

Child Psychologists say that a man who has got 20 years of formal education, has irrevocably lost or damaged 70% of his IQ. I have completed 18 years of formal education by 10 + 2 + 4 years (and 2 years in kinder garden) so I must have lost 63% of my IQ. Hence I have no qualms in saying “Main panchvi pass se tej nahin hoon” ( I am not smarter than a 5th grade kid.) Having said that, I hope the readers will spare me for my stupidity and mistaken concepts regarding Inflation and Economy.

Though I don’t have much of an IQ, I have my basic chemistry intact and a little bit of common sense.
Basic crude oil Refining

Basic crude oil Refining

As seen from the image, petrol being lighter and more volatile, distills out first at about 120˚C while the diesel comes out much later at 270˚C. Obviously more energy is required to extract diesel from crude oil and as such it must be more costly. However in India we get Diesel at about INR 34 and Petrol at about INR 50. Diesel is subsidised, as India being an agro-based country needs diesel for tractors, tube wells etc.

If that’s the case then I don’t understand what the Under Performing Alliance prime-minister and the famous economist Dr. Manmohan Singh means by “subsidy cannot be given forever”

Does he mean to say that Diesel prices will be raised by about INR 15? Does he mean to say that the successive government knowingly gave the Oil companies huge losses and deliberately planned a situation where they don’t have funds to buy crude oil? Does he mean to say that in last 60 years none of the oil companies ever made a profit? And ONGC being rated in Fortune 500 is a hoax?

Unfortunately, facts tell otherwise. In Pakistan, as on 16 March 2008 petrol was INR 39.64 where as Diesel was at 24.59 INR. In 2002, petrol in India was costlier by 22% and 45% compared to Pakistan and Bangladesh respectively.

Anyways, as I said I am no economist, so before starting this post I looked up to the dictionary to know what the term subsidy means. Well, Webster defines subsidy as “a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public”. Unsatisfied with the definition I referred a second one and it defined the word more precisely as “an amount of money that the government pays to help reduce cost of product or service”.

Obviously the whole and sole aim of subsidy is to reduce the cost of product, so if the world wide oil prices are increasing, the best buffer can be to reduce the taxes on the fuel. And it is a well known fact, that if taxes are removed from petrol and diesel their prices will fall in India irrespective of the current state of the world market.

It follows that our government and Dr. Manmohan Singh thinks that leaving a tax of INR 20 on an item priced at INR 100 whose production cost is at INR 1 is also a subsidy and it cannot go on forever.

To show the greatness of our economist and our budget planners, let’s look at a very simple item. Milk in India costs about INR 20 while as a Soft Drinks are priced at INR 30 a litre or INR 42 per 1.5 litre. And before you jump to say that Soft drink is a Luxury while milk is a necessity, I haven’t finished yet. Mineral water is at INR 10 per litre!!!

Now, does the government thinks that drinking water is not as big necessity as that of milk? Or it simply wants to state that two litres of water are equivalent to 1 litre of milk? And don’t you think that 250 ml of carbonated water ( 1.5 litre of soft drinks) should be made cheaper???

It is pretty strange that we will fight with our grocer for charging 50 paise extra, fight out in court to avoid paying a rupee extra over MRP but never ever utter a single word when the government makes us pay through our nose in name of inflation. Like I said, we all have had formal education and has lost our IQ somewhere during our education.

So, what’s wrong if we pay more? We are making our country developed, Right? No wrong again!!! Let’s see how we spend the money! 5-year plan is turned into a 50-year plan of corruption. So our Under Performing Alliance (UPA) government takes pride in the sucess of the “Pradhan Mantri Gram Sadak Yojna”. It is simply a waste of money. It’s an insult to labour and mockery of intelligence.

What kind of road do they build? Is it a pitched road? a concrete road?NO. It is a road that is made of clay. Motorable during summers and with monsoon it disintegrates, and the next summer the process is repeated again. Why can’t they sanction a pitch road?

I guess, our Prime minister has done a PhD.and thus has more than 20 years of formal education and has lost more than 70% of his IQ. He is incompetent to make his own decisions and thus needs guidance in everything he does. And the God Sent guidance in form of Under Performer’s Alliance chairperson Ms. Sonia Gandhi!!!

Middle Class: Economy Driver of India

Aristotle once said, “A good society is one where the middle class out numbers every one else.” And India is gearing forward to scale this height by 2025. The once upon a time middle class is playing weighing machine for the rest of India.

Children IndiaThe Indian economy has been doing fairly well for the last few years or so, and the most striking characteristic of India today is the explosive growth of the middle class. This middle class was branded as conservative and thrifty a few decades back. However now, India’s middle class is more dynamic, liberal and forms the pillar of a vibrant economy that we have been witnessing lately. This middle class is now playing a definitive role in emergence of India globally, which is full of energy and enthusiasm that is driving the economy towards success and development.

We have always believed that the population has served as the “big” problem for us. It might be true, but there is another aspect to it as well. Although there is no denying that we need to control our population, the youth, which comprises 60 per cent of the total population of the country, can be an asset. Former President, APJ Abdul Kalam once said that large populations created demand for goods and services and was the basis for economic growth. However, we need to give equal oppurtunities to everyone, including the lower strata of the society through good education. A high population creates large markets, which is further advantageous if people are educated. A rise in the level of education gets translated into rise of income. This growth of our middle class has changed our society and politics distinctively. Its worldview is different and if the middle class organises itself in a better way, it has the power to revolutionize the society. Middle class is more conscious about what is right or wrong. They know what their rights are and how to fight for them. Till date, the story has been good, but we cannot be complacent and need to strengthen our middle class.

With the rise in numbers, it is important for us to realise that we (the middle class) have the control of the steering and need to drive our nation forward. We need to develop a better social and civic sense. The middle class was lauded for its action in the Jessica Lal case, Reservations, RTI act but still we respond to only those issues with which we can co-relate ourself. There are thousands of acts of injustice, corruption and unethical behaviour to which, many a time, we become party or beneficiary. We cannot distance ourselves from the range of issues that concern our nation and we must realise that our views, opinions and actions can do wonders. It is equally important to keep the moral and social fabric of the society intact and present a true image of a united India.

The management consultancy firm, McKinsey predicts that India’s middle class will reach 583 million by the year 2025. India will reach Aristotle’s ideal by then, and the middle class will constitute 50 per cent of the total population. With the increase in the size of middle class, India is bound to scale new heights and avenues.

Agriculture And Indian Economy.


AMIDST ALL the software and the IT boom, the one sector that has been most ignored is the agriculture sector. What used to form the backbone of the Indian Economy is not being given enough privileges by the government now. The sensex and certain sectors of the economy have seen unprecedented growth, but yet the most important sector to the country has been lagging behind. And with more than half the population in the country still associated with agriculture, urgent reforms need to be made so that this sector in itself can grow rapidly. Contributing to almost one fourth of the nation’s gross domestic product (GDP), it provides employment to millions of people living in the rural areas.

P Chidambaram’s latest Rs 60,000 crore debt waiver to the farmers having less than five acres of land comes as a sigh of relief to most of the farmers all over the country. But yet this scheme is not applicable to all the farmers. Chidambaram could have played a masterstroke through this scheme, but from an economic point of view, it is a disastrous one. The same banks and financial institutions that used to give away loans to all farmers will have to think twice before doing that, as it may not be such a profitable decision after all.

The agriculture sector has seen a growth of about one per cent in the past few years as against the anticipated growth of four per cent. The main problem affecting agriculture is that farmers themselves don’t see it as a profitable option today. With the tremendous increase in population, the land holdings of farmers have shrunk to abysmal levels. The farmers themselves have become grossly indebted and if the rains are not on their side and the crop fails, then they are often staring at unemployment and mere survival.

International trade could play a major role in the rejuvenation and the transformation of this sector. The forward contract Regulation Act, which was having adverse effects in the production of wheat, has now been amended to cater to the problems of the farmers and to help achieve a single common market across the length and breadth of the country.

Public private partnership could augur well for the development of this sector and private investment could get rid of the problem of poor infrastructure. The market as well as the state should work hand in hand to ensure higher returns to farmers and better services to consumers. The private sector would both encourage cooperation and competition and would offer better value for money. The APMC act should be amended by all states and the Mandi taxes could be removed to allow for sustainable results for the farmers.

The Essential Commodities act has already been modified to permit the storage, marketing and movement of agricultural commodities. A unified or an integrated food law should be formulated to bring convergence in the food laws and to encourage the food processing industry. The tax on processes food could easily be lowered further. India is currently a medium sized agricultural exporter, but it could well become the main food supplier to the rest of the world if the agriculture sector could grow rapidly. Foreign buyers who prefer Indian food could be targeted to enhance the exports of such products.

Coming back to the budget, though it may be one of the most popular budgets designed to fetch votes in the upcoming elections next year, but at least it offered incentives to the farmers. If the right measures are taken now, the Indian agricultural industry has the potential to make India the leading agro economy of the world. We need to be able to compete on a global platform with respect to both cost as well as quality. A holistic and integrated approach is the need of the hour to attain sustainable development and growth in this sector.

The “Inflation” Effect

The United Progressive Alliance (UPA) has completed almost four years in the office. Kudos to them for providing a stable government so far. The growth rate has been approximately 8.5 per cent according to the various reports. I don’t know what exactly this term “growth rate” means, but I have observed many changes in my daily life. The change has been very significant in the last few months post that populist budget.

Surging prices of vegetable, fruits and pulses hit the common man hard while dearer steel and metals pushed the inflation to a 40-month high of 7.41 per cent, prompting the government to take more price control measures like ban on cement exports, and now may be ban on steel exports as well. “Whatever I make, must be affordable to the common man.” These were the words of Chinni Krishnan, who is acknowledged as the father of the sachet revolution in India. But is the common man’s problem being addressed in our country?

Empty WalletBeing a student and living in the hostel, I need to manage my expenses well. Previously, my daily expenditure was Rs. 100, which has increased to Rs. 150 now, despite my having cut down my expenditure on some fronts. I have to ask my parents to deposit more money in my account now. My father, who has taken a home loan, has to pay more Equated Monthly Installments (EMIs) and the return period has gone beyond his retirement. The college has increased the fees citing more expenditure. The mess fees has increased following the rise in essential commodities such as vegetables, edible oils, etc. In all, my life has changed a lot in the last few months. It is not just me; in fact, all of us must have faced the heat of rising inflation week after week. The condition of the people who depend on the daily wages is much more pathetic because they are the first and the worst victims of inflation.

Despite this growth rate, the common man’s problems are not attended to. The cup of woes of the common man across the country seems to have reached its brim, with rising prices of fruits, vegetables and other essential commodities leaving a deep hole in the pocket, forcing us to re-frame his already back bending budget.

This is an issue, which is core to the Indian government right now as it knows that the soaring inflation, if not curbed will eat away the entire success story (if any), which it has woven since the past four years, certainly something it does not need when it is going to the polls. The Prime Minister has said that the government will try their level best to curb the inflation but that has not happened till date. The government needs to curb the growing price at the earliest; else it will have to face the consequences in all the upcoming elections scheduled later this year.

This government is definitely by the people but not for the people. I say that whatever reasons the government might give for inflation but the end of the story is that the common man does not have either the time or the money to read or know about that reasons. The failure to curb price rise and inflation has been a major blot on the government totally neutralising the 8-9 per cent growth rate. As the UPA completes its fourth year in the office, the government headed by PM, Manmohan Singh, may be known more for what it has not been able to achieve rather than what it has.

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February 29th is more than just an ordinary day

Every four years an uninvited guest becomes a part of our Calendar. For some it goes unnoticed while the others plan something big for it. February 29th may not greet us too often, but this extra day has more to it than just an ordinary day of 2008.

For the unfortunate few who are born on this day, it means that their next birthday will fall after four years. Try explaining that to a young kid, who sees his friends celebrate their Birthday parties every year but has to wait for four long years to throw a big one. Hospitals all over India and the World see an increased number of children being born on February 29th than the other days of the year. Either it is Mother Nature’s way of playing around with the kids or it stands for really poor planning on the parent’s part. Whichever way you look at it, the poor kid will continue to resent his mom for a long time to come. Why couldn’t she just hold me for a few more hours?

In the context of our country, February 29th will stand for more than the yearly budget. Yes, Chidambaram has been at it and four years and will again come up with a people’s budget so that this government stands tall in the upcoming elections next year. An addition of a day means an addition of $2.74 billion to the Indian economy. Since Mother Nature was generous enough to make this day fall on a Friday, people would be expected to go about their daily work as they used to. Hopefully Chidambaram will not throw up anything catastrophic with the petrol or the diesel prices, so people would still be going to office without burning a hole in their pockets.

The concept of Leap years is itself a tricky one. It wasn’t something which was taught in School to us. The Leap year problems used to be the simplest for calculations. Just divide by 4 and if you don’t get a remainder than there is your Leap year. Who needs to be a Phd in Mathematics to figure that out? But throwing some light on numbers, not every year divisible with 4 is a leap year. 2100, 2200, 2300, 2500 are not leap years though they are divisible by four.

Well, the rule is that for all centuries or for the year ending with 00, it has to be divisible by four hundred to be regarded as a leap year. Hence 2000, 2400 are leap years. But 2100, 2200, 2300, 2500 are not since they are not divisible with four hundred. This is only in the case of centuries. Now if you really want to know why this strange rule, contact the people who created the Gregorian Calendar. And No, you will not find their helpline numbers on the Calendar sitting pretty on your desk.

A Leap year has an additional day but what does an additional day mean to us. For an year that has 365 days packed into it, what difference is a single day going to make? 1 day out of 365 days is just 0.0027 percent. So, probably 0.0027 percent extra income that year for employers or 0.0027 percent increase in the GDP of every country. Not very impressive.

In India, February 29th throws up a smile at the faces of all investors and economists. The Indian GDP registers its maximum growth in the first quarter that is the January-March quarter, and hence an addition of a day would imply more than a 0.0027 percent increase in the GDP of our country in a leap year. It will not be the same for a country like US, where the economy growth is in the last quarter every year that is the October-December quarter.

Thus whatever the advantages be, the fact remains that this day does not come often in our lives. Just about fifteen to twenty times in an average lifetime. Even at Target Genx, we will see February 29th making its debut. But hopefully, there will be many more such days to come. We need to make the most of them.

An open Letter to politicians of UP and Bihar

TruthWell in one of my articles “Political games being played all over”, i mentioned reasons about large scale migration from UP and Bihar. I was lacking some figures which i got in today’s HT Counterpoint written by Vir Sanghvi on page 10.

Here is an excerpt from that article.

My suspicion is that the disdain with which the Thackerays treat people from UP and Bihar – the so-called Bhaiyyas – is part of a wider trend. As India develops and transforms itself, UP and Bihar are increasingly being perceived as the laggards. Once, Bihar was India’s best-administered state (do not laugh: an international study came to this conclusion in the 1950s); now, it is seen as a wasteland. UP was the heart of India, the state that gave us the largest number of Prime Ministers. Now, it is a mess, treated on par with Bihar.

One look at the figures will demonstrate that UP and Bihar are the two states in India that are certainly not shining. The net state domestic product of Bihar was Rs 51,194 crore in 2004-05. In contrast, the state domestic product of Ma- harashtra was Rs 3,28,451 crore, over six times the figure for Bihar. Even poor, backward Orissa did better than Bihar at Rs 52,240 crore.

The contrast is more striking when you look at per capita figures. In 1993-94, the per capita domestic product of Bihar was Rs 3,037. Eleven years later, in 2004- 05, that figure had gone up to Rs 5,772 which, when you adjust for inflation, prob- ably means that income hardly went up at all, and may even have gone down.

Now, look at the figures for other states. In 1993-94, Maharashtra’s per capi- ta domestic product was Rs 12,183 – already four times the figure for Bihar. By 2004-05, it had gone up to Rs 32,170, nearly six times the figure for Bihar. Gujarat was at Rs 28,355 in 2004-05, and other states were booming: Kerala at Rs 27,048; Punjab at Rs 30,701; and Haryana at Rs 32,712.

Uttar Pradesh has fared a little better. In 1993-94, its per capita income was Rs 5,066. In 2004-05, it went up to Rs 11,477 (largely on the basis of Noida, but that’s another story). This makes it better off than Bihar but still worse off than every other Indian state.

Together, UP and Bihar are bottom of the list when it comes to per capita income. It takes four Biharis to earn as much as one resident of Maharashtra. And, UP’s current per capita income of Rs 11,477 is less than Maha- rashtra’s income of Rs 12,183 a decade ago in 1993-94. In those 11 years, UP has not even reached where Maharashtra was way back then while Maharashtra and other Indian states have surged ahead.

The economic disparity is matched by a political decline. In few states has politics got as dirty as in today’s UP. If it isn’t Mulayam Singh Yadav’s crony capitalism, then it is Mayawati’s shameless casteism and her naked pursuit of her own enrichment (her annual income is Rs 60 crore the saving grace is that she declares it and pays tax on it).

As far as the rest of India is concerned, Bihar has become a wasteland run by mafia dons who are pursued by Naxalites. The rule of law does not exist, and politics is largely a question of caste.

In both states, national parties hardly get a look in, unless they are alliance partners. Regional groupings based on caste share power with one another. Because these states have such a large share of Lok Sabha seats (UP has 80 while Bihar and Jharkhand together have 54), national politics is held hostage to these caste considerations and to the ambitions of regional leaders.

All this contributes to the lack of regard for UP and Bihar in many parts of India.
In Bangalore, a few years ago, a successful software executive told me that he had compiled a growth rate for south India and that it exceeded China’s. “It is UP and Bihar that let us down,” he said. Such sentiments are common. The face of India that we show to the world – hi-tech, Bollywood-glitzy and super-educated has nothing to do with UP and Bihar. For many Indians, the two states have become an embarrassment.

Now i have a question for politicians of UP and Bihar. Do they have any blue print of taking their state forward? The states have only caste politics nothing else. The people are so “innocent” that they fall prey to caste games. They don’t even understand the term development it seems. May be because they have never seen it. But one thing is for sure that whole India is developing at a brisk pace while UP and Bihar are crawling.  As Mr Sanghvi says–  I have respect too for the ordinary Biharis, who are truly the salt of India, going off to other states to create wealth for all of us. I doubt if West Bengal could survive without Biharis and Punjab’s crops are usually planted and harvested by Bihari workers. And oddly enough, whenever Biharis have travelled overseas, they have prospered: in Mauritius, Guyana and Surinam, for instance.

But then why can’t their own state take care of them. It is because we have not changed with time. Rest of India ignored the casteism and racism and rose to the top of the economic pyramid. And eventually India shed its old image and went from being perceived as an underdeveloped wasteland to becoming an emerging superpower. But the status-quo in UP and Bihar. I want to ask the politicians and people of UP and Bihar—- How long will they deny their citizens the benefits of the new India? And how long will the voters of UP and Bihar allow themselves to be ruled by a bunch of casteist crooks?