biographiesofFranzKafka

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Tuesday, 6 August 2013

Books Reviewed: TWO NEW BOOKS ABOUT “BORGES”

Posted on 09:44 by Unknown
Few artists have built grand structures on such uncertain foundations as Jorge Luis Borges. Doubt was the sacred principle of his work, its animating force and, frequently, its message. To read his stories is to experience the dissolution of all certainty, all assumption about the reliability of your experience of the world. Of the major literary figures of the twentieth century, Borges seems to have been the least convinced by himself—by the imposing public illusion of his own fame. The thing Borges was most skeptical about was the idea of a writer, a man, named Borges.
In his memorable prose piece “Borges and I,” he addresses a deeply felt distinction between himself and “the other one, the one called Borges.” “I like hourglasses,” he writes, “maps, eighteenth-century typography, the taste of coffee, and the prose of Stevenson; he shares these preferences, but in a vain way that turns them into the attributes of an actor.” He recognizes almost nothing of himself in the eminent literary personage with whom he shares a name, a face, and certain other superficial qualities. “I do not know which of us has written this page,” he concludes.
This haunting, teasing fragment is reproduced in its entirety in “Borges at Eighty: Conversations,” a collection of interviews from his 1980 trip to the U.S., which has been published in a new edition by New Directions. It’s an instructively ironic context for the piece to turn up in—a transcript of a public event at Indiana University in which a number of Borges’s poems and prose pieces were read aloud in English, followed by a short extemporaneous commentary by the author. When he addresses the audience, he seems to be speaking for the “I,” but it is surely “Borges” who is doing the talking:
photographed, for having interviews, for politics, for opinions—all opinions are despicable I should say. He also stands for those two nonentities, those two impostors failure and success […] He deals in those things. While I, let us say, since the name of the paper is “Borges and I”, I stands not for the public man but for the private self, for reality, since these other things are unreal to me.
For someone who hated being interviewed, Borges was a prolific and garrulous interviewee (although it was perhaps “Borges” who handled that side of things). And yet, to point this out is to risk missing the substance of what he is saying here, which is not simply that he feels himself at odds with his own public persona but that he feels himself profoundly at odds with how little he is at odds with it. (Such paradoxes are an occupational hazard in any encounter with Borges.) One of the collection’s most interesting aspects is the interaction of these incompatible elements: the obvious pleasure Borges takes in the opportunity to present himself for public consumption, and his reflexive skepticism about the necessary fraudulence of the writer as personality.
There’s something fascinatingly Borgesian about the way in which the self-awareness of the performance is itself highly performative. This preoccupation with the divided self veers close to a sort of ontological double act, a one-man odd-couple routine. “Everyone sitting in this audience wants to know Jorge Luis Borges,” begins the interviewer, in the first of this book’s conversations. Borges replies, “I wish I did. I am sick and tired of him.” For a writer, he was not greatly exercised by the topic of himself. He was interested in his interests and not the contingent fact that it was he, Borges, who was interested in them. Being himself was never much more than drudgery. “When I wake up,” he tells one of his interviewees, “I always feel I’m being let down. Because, well, here I am. Here’s the same old stupid game going on. I have to be somebody. I have to be exactly that somebody. I have certain commitments. One of the commitments is to live through the whole day.”
Borges never wrote a work of fiction longer than fourteen pages. “It is a laborious madness and an impoverishing one,” he wrote in 1941, “the madness of composing vast books—setting out in five hundred pages an idea that can be perfectly related orally in five minutes.”.. 
read more: http://www.newyorker.com/online/blogs/books/2013/07/two-new-books-about-borges.html
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Posted in Books and literature | No comments

Ishrat Jahan case: P P Pandey's bail plea rejected

Posted on 08:40 by Unknown
A special CBI court here today rejected the anticipatory bail application of ADGP P P Pandey, paving the way for his arrest in the 2004 fake encounter case of Ishrat Jahan and three others.
Special CBI judge Gita Gopi rejected the anticipatory bail application of Pandey, who had gone underground for a few months after his name surfaced in the encounter case. The court had declared him proclaimed absconder then. The special court was hearing his application afresh on the directions of the Gujarat High Court which had restrained CBI from arresting the senior IPS officer till August 6.

The 1982-batch IPS officer was Joint Commissioner of Police (Crime), Ahmedabad, when Mumbai-based Ishrat, her friend Javed Shaikh, alias Pranesh Pillai, and their associates Amjad Ali Rana and Zeeshan Johar were gunned down by Crime Branch sleuths on June 15, 2004 on the city outskirts. The CBI had named seven Gujarat police officers including Pandey in the charge sheet filed last month in the case. The charge sheet had termed the encounter to be fake and had also held that it was a joint operation between Gujarat Police and Intelligence Bureau.
Earlier, Pandey's lawyer Nirupam Nanavati had argued that CBI has been chasing Pandey and wanted to send him behind the bars by hook or by crook.

CBI's branding of his client as a proclaimed absconder (in the charge-sheet of Ishrat case) was totally illegal as Pandey appeared before the concerned court as per the orders of the Supreme Court, Nanavati had said. "It is not an error or mistake. It is a deliberate design so as to deprive Pandey of any discretionary order from seeking justice," he said. "CBI does not want to humiliate only my client (alone) but they want to humiliate the entire police brass of Gujarat", he added.
Contending that there was no material against Pandey, Nanavati said he was acting on IB inputs and if IB inputs were to be questioned, there may be a serious law and order problem in the  country. 

However, CBI counsel Ejaz Khan had refuted the charges by saying that the investigation agency had taken over the Ishrat case only on the directions of the Gujarat High Court. "It is mischievous to term this as (result of) political rivalry. We have not come here as a political rival to any one. We are investigating the case on the directions of the Gujarat High Court," Khan argued. Khan said the act committed by some of the accused police officials was "beyond the imagination of a fiction writer". Rubbishing the claim that the probe against Pandey had some ulterior motive, Khan said, "He chose a wrong way which does not befit a senior police officer.

He approached all forums for quashing FIR, staying his arrest, among other prayers. He should have come before a judicial officer and marked his presence." City Crime Branch had in 2004 claimed that the four were terrorists, on a mission to kill Gujarat Chief Minister Narendra Modi.
http://www.indianexpress.com/news/ishrat-jahan-case-p-p-pandeys-bail-plea-rejected/1151790/0

See also:

Ishrat Jahan link (that never was): Untold story of a J-K encounter

Sajjan Kumar's trial for murder in the 1984 riots to continue

IB’s campaign to vilify Ishrat Jahan

Ex-DGP writes to Pranab Mukherjee over 'IB men's intervention' in Ishrat case

Ishrat Jahan case: IB can seek immunity if they want, says CBI

Ishrat Jehan's mother appeals for justice // CBI Probe Nails IB Officer’s Role // Important interview with Shamima Kauser's lawyer Vrinda Grover

Public Appeal by R.B. SREEKUMAR, FORMER DGP, GUJARAT

Did Narendra Modi, Amit Shah know of the Ishrat Jahan encounter in advance?

Police records show Gujarat riots weren’t a sudden backlash

Mohan Guruswamy - Who lit the Godhra fire? (July 2002)

Sadiq Jamal Case: CBI Files Affidavit, Says Probe In Progress

Gujarat Police killed Sadiq Jamal despite Intelligence Bureau's clean chit

How Varun Gandhi silenced the system - Tehelka expose

1984 carnage - 5 convicted, main accused Sajjan Kumar acquitted

Probe larger conspiracy says Zakia Jafri's counsel, reminds SIT of SC order regarding 2002 riots

Poornima Joshi: Sangh Singh Song
A Hard Rain Falling (private armies and political violence in India) (EPW)

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Posted in human rights, justice | No comments

Shameless abuse of power by UP government - Writer arrested for support of IAS officer Durga Shakti Nagpal

Posted on 06:15 by Unknown
Even though it has been slammed nationwide for suspending IAS officer Durga Shakti Nagpal, the Uttar Pradesh government seems to be in no mood to relent. Now, Kanwal Bharti, a writer, has been arrested from Rampur for an online editorial criticizing UP minister Azam Khan for his remarks against Ms Nagpal, who was suspended from the post of Sub Divisional Magistrate of Gautam Budh Nagar.

The writer has been booked for promoting disharmony between two religious groups and defiling a place of worship. A case was registered against Mr Bharti based on the complaint of Azam Khan's personal assistant Shanu Khan. 
"The police took away my computer too. This will happen in the future too. I believe that no government should use names of any particular religion or caste... it gives a bad name," Mr Bharti told NDTV.

The Uttar Pradesh government had suspended Ms Nagpal for allegedly ordering the removal of a wall of a new mosque being built at a village in Noida and thereby endangering communal harmony. Her supporters say she has been suspended for taking on the powerful sand mining mafia in the area.


http://www.ndtv.com/article/india/now-dalit-man-who-wrote-in-support-of-ias-officer-durga-shakti-nagpal-arrested-402129?pfrom=home-lateststories

Kamal Bharti arrested for Facebook post on Durga Shakti Nagpal's suspension
Eminent Dalit scholar, Kamal Bharti, was arrested here today on a complaint by Uttar Pradesh Minister Azam Khan's aide for his alleged Facebook post on suspended IAS officer Durga Shakti Nagpal. Bharti, author of various books dealing with problems faced by Dalits, in his post said that the Gautam Budh Nagar SDM was suspended for alleged demolition of wall of a mosque. He went on to say that in Rampur a madarsa was recently demolished and its manager was placed behind the bars but no action was taken against the officials who were deputed to demolish the institution. The madarsa was demolished because it was allegedly constructed on the land of a graveyard, sources said. In his post, Bharti said it is the 'will and wish' of the Urban Development minister Azam Khan which prevails and not the law of the land. In the complaint, Azam Khan's PRO Fasahat Ali Khan alleged that Bharti had made a derogatory remark against the UP minister. On the complaint, a case was registered against Bharti at Civil Lines police station and he was arrested, police said. Bharti was produced before the court of Chief Judicial Magistrate V K Pandey, which granted him bail.
http://www.indianexpress.com/news/dalit-scholar-kamal-bharti-arrested-for-facebook-post-on-durga-shakti-nagpals-suspension/1151891/

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Posted in corruption, current affairs - India, human rights | No comments

Remembering Hiroshima & Nagasaki, August 1945 - Exhibition tells story of the bombing which changed the world

Posted on 06:04 by Unknown
The atomic bombing of Hiroshima and Nagasaki has polarised opinion for nearly 70 years. For some it is an unforgivable stain on human history, the moment when the world fell to scientific horror. For others it was a necessary evil to bring an end to the Second World War - a conflict which had brought countries around the globe to their knees. What is without doubt is the world was inextricably changed when the Allies decided to drop nuclear weapons on Japanese cities.

On August 6, 1945, the Americans dropped the first atomic bomb - known as ‘Little Boy’ - on Hiroshima. It flattened a five mile area with a mushroom cloud rising thousands of feet into the air. Official estimates put the death toll at 140,000 people from the blast and resulting radiation poisoning. Three days later, a second bomb was dropped on Nagasaki leaving a further 74,000 people dead. A week passed, and the Japanese surrendered to the Allied forces.

Now an exhibition of the event and its repercussions is on display at Edinburgh’s Central Library. Hiroshima-Nagasaki atomic bombings has been brought to the city after a partnership between Edinburgh City Libraries and Nuclear Free Local Authorities (NFLA). “A nuclear weapon attack without any shadow of a doubt is the most unimaginable thing that could happen,” said Sean Morris, the secretary of the NFLA. “When you see the relics, the artifacts and some of the terrible destruction that was caused in these cities we start to realise we could never have a war like that. “There would not be much of a world left. By going to Hiroshima, you see the need for a world free of nuclear weapons.”

The NFLA (Nuclear Free Local Authorities) group lobbies for a ban on nuclear weapons and the restriction of the use of nuclear power as an energy source. Edinburgh and Glasgow are amongst 50 councils across the UK which works with the body. The Hiroshima-Nagasaki exhibition has toured schools and libraries across the UK since 2010, with this stop in Edinburgh the first time it has been in the Scottish capital. The presentation features 48 panels on the background of the bombings, photographs of damage to the cities, the human cost and the ongoing challenges both cities face in the aftermath of the disaster.

It also goes into the political aftermath of the incident, from the Cold War to how nuclear weapons are still a prominent issue today. The mushroom cloud about one hour after detonation at Hiroshima, taken from an altitude of approximately five miles and a distance of approximately 50 miles from the hypocenter... 
The exhibition at the Central Library was opened last week by Edinburgh’s Lord Provost Donald Wilson and the Japanese Consul General, Masataka Tarahara. Mr Tarahara has been the Japanese Consul to Scotland for the past three years. Originally from Osaka, the 59-year-old believes the exhibition is a timely reminder of the issue of nuclear weapons. He said: “For all Japanese people,and the government, we are the only country who has ever suffered from an atomic bombing in human history. We never want the tragedy to ever happen again. “Every visitor to Hiroshima and Nagasaki is shocked with the photos. “War itself is a tragedy for human kind. Conflict should be resolved by peaceful means and through diplomacy. “We should abolish weapons of mass destruction, especially nuclear weapons. The exhibition is very important and timely. It is meaningful to think about nuclear weapons as recently North Korea made a further nuclear test. “The reality is the number of countries who have nuclear weapons has increased and that is regrettable.”

Mr Wilson added: “The atomic bombings in 1945 devastated the cities of Hiroshima and Nagasaki and their affects are still being felt today. “It’s vitally important we continue to raise awareness not just the short term destruction but the lasting implications for the people and the planet as a whole. “It is only through a full knowledge of the consequences that we can assure that such a tragic event never happens again.”

See full original here: local.stv.tv/edinburgh/magazine/214514-hiroshima-and-nagasaki-exhibition-held-in-edinburgh/
Fact File on Hiroshima & Nagasaki - BBC
On the morning of 6 August 1945 an American B-29 bomber, the 'Enola Gay', dropped the first atomic bomb used in warfare on the Japanese city of Hiroshima. The bomb was dropped by parachute and exploded 580m (1,900ft) above the ground. Between 60,000 and 80,000 people were killed instantly. The heat from the bomb was so intense that some people simply vanished in the explosion. Many more died of the long-term effects of radiation sickness. The final death toll was calculated at 135,000. As well as residents of Hiroshima, the victims included Koreans who had been forced to come to Japan as labourers, and American prisoners-of-war who were imprisoned in Hiroshima. The blast destroyed more than ten square kilometres (six square miles) of the city. And the intense heat of the explosion then created many fires, which consumed Hiroshima and lasted for three days, trapping and killing many of the survivors of the initial blast. Thousands of people were made homeless and fled the devastated city. Hiroshima was chosen because it had not been targeted during the US Air Force's conventional bombing raids on Japan, and was therefore regarded as being a suitable place to test the effects of an atomic bomb. It was also an important military base. The Allies feared that any conventional attempt to invade the Japanese home islands would result in enormous casualties, and the bomb was seen as a way of bringing the war against Japan to a swift conclusion. In addition, it may also have been a way of demonstrating American military superiority over the Soviet Union. On the morning of 9 August, the Americans dropped a second, bigger atomic bomb. The original target was Kokura, but this was obscured by cloud so the bomb was dropped on nearby Nagasaki, an important port. About 40,000 people were killed instantly and a third of the city was destroyed. The final death toll was calculated as at least 50,000.

The Russell-Einstein Manifesto of 1955

"In view of the fact that in any future world war nuclear weapons will certainly be employed, and that such weapons threaten the continued existence of mankind, we urge the governments of the world to realize, and to acknowledge publicly, that their purpose cannot be furthered by a world war, and we urge them, consequently, to find peaceful means for the settlement of all matters of dispute between them."
Max Born
Percy W. Bridgman
Albert Einstein
Leopold Infeld
Frederic Joliot-Curie
Herman J. Muller
Linus Pauling
Cecil F. Powell
Joseph Rotblat
Bertrand Russell
Hideki Yukawa


A Final Warning by George Orwell

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Posted in Global War and Violence, history, Japan | No comments

Jacob Silverman - Why is the world's biggest landfill in the Pacific Ocean? // Film on the massive plastic pollution of the oceans

Posted on 05:22 by Unknown
In t­he broad expanse of the northern Pacific Ocean, there exists the North Pacific Subtropical Gyre, a slowly moving, clockwise spiral of currents created by a high-pressure system of air currents. The area is an oceanic desert, filled with tiny phytoplankton but few big fish or mammals. Due to its lack of large fish and gentle breezes, fishermen and­ 
s­ailors rarely travel through the gyre. But the area is filled with something besides plankton: trash, millions of pounds of it, most of it plastic. It's the largest landfill in the world, and it floats in the middle of the ocean.
The gyre has actually given birth to two large masses of ever-accumulating trash, known as the Western and Eastern Pacific Garbage Patches, sometimes collectively called the Great Pacific Garbage Patch. The Eastern Garbage Patch floats between Hawaii and California; scientists estimate its size as two times bigger than Texas [source:LA Times]. The Western Garbage Patch forms east of Japan and west of Hawaii. Each swirling mass of refuse is massive and collects trash from all over the world. The patches are connected by a thin 6,000-mile long current called the Subtropical Convergence Zone. Research flights showed that significant amounts of trash also accumulate in the Convergence Zone.
The garbage patches present numerous hazards to marine life, fishing and tourism. But before we discuss those, it's important to look at the role of plastic. Plastic constitutes 90 percent of all trash floating in the world's oceans [source: LA Times]. The United Nations Environment Program estimated in 2006 that every square mile of ocean hosts 46,000 pieces of floating plastic [source: UN Environment Program]. In some areas, the amount of plastic outweighs the amount of plankton by a ratio of six to one. Of the more than 200 billion pounds of plastic the world produces each year, about 10 percent ends up in the ocean [source:Greenpeace]. Seventy percent of that eventually sinks, damaging life on the ocean floor [source:Greenpeace]. The rest floats; much of it ends up in gyres and the massive garbage patches that form there, with some plastic eventually washing up on a distant shore.
http://science.howstuffworks.com/environmental/earth/oceanography/great-pacific-garbage-patch.htm
See film: Great Pacific Garbage Patch 
http://www.midwayfilm.com/
In 1997, while returning to southern California after finishing the Los Angeles-to-Hawaii Transpac sailing race, he and his crew caught sight of trash floating in the North Pacific Gyre, one of the most remote regions of the ocean. He wrote articles about the extent of this garbage, and the effects on sea life, which attracted significant attention in the media.  “As I gazed from the deck at the surface of what ought to have been a pristine ocean,” Moore later wrote in an essay for Natural History, “I was confronted, as far as the eye could see, with the sight of plastic. It seemed unbelievable, but I never found a clear spot. In the week it took to cross the subtropical high, no matter what time of day I looked, plastic debris was floating everywhere: bottles, bottle caps, wrappers, fragments.” An oceanographic colleague of Moore’s dubbed this floating junk yard “the Great Pacific Garbage Patch” 
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Posted in birds, ecology, the oceans | No comments

Monday, 5 August 2013

12 hours a day, 6 days a week - the woman who nearly died making your iPad

Posted on 23:08 by Unknown
At around 8am on 17 March 2010, Tian Yu threw herself from the fourth floor of her factory dormitory in Shenzhen, southern China. For the past month, the teenager had worked on an assembly line churning out parts for Apple iPhones and iPads. At Foxconn's Longhua facility, that is what the 400,000 employees do: produce the smartphones and tablets that are sold by Samsung or Sony or Dell and end up in British and American homes.
But most famously of all, China's biggest factory makes gadgets for Apple. Without its No 1 supplier, the Cupertino giant's current riches would be unimaginable: in 2010, Longhua employees made 137,000 iPhones a day, or around 90 a minute.
That same year, 18 workers – none older than 25 – attempted suicide at Foxconn facilities. Fourteen died. Tian Yu was one of the lucky ones: emerging from a 12-day coma, she was left with fractures to her spine and hips and paralysed from the waist down. She was 17.
When news broke of the suicide spree, reporters battled to piece together what was wrong in Apple's supply chain. Photos were printed of safety nets strung by the company under dorm windows; interviews with workers revealed just how bad conditions were. Some quibbled over how unusual the Foxconn deaths were, arguing that they were in line with China's high rate of self-killing. However conscience-soothing that claim was in both Shenzhen and California, it overlooked how those who take their own lives are often elderly or women in villages, rather than youngsters who have just moved to cities to seek their fortunes.
For the three years since, that's the spot where the debate has been paused. In all the talk of corporate social responsibility and activists' counter-claims that the producers of iPads and iPhones are still sweating in "labour camp" conditions, you hardly ever hear those who actually work at Foxconn speak at length and in their own terms. People such as Tian Yu.
Yu was interviewed over three years by Jenny Chan and Sacom, a Hong Kong-based group of rights campaigners. From her hospital recuperation in Shenzhen to her return to her family's village, Chan and her colleagues kept in touch throughout and have published the interviews in the latest issue of an academic journal called New Technology, Work and Employment. The result is a rare and revealing insight into how big electronics companies now rely on what is effectively a human battery-farming system: employing young, poor migrants from the Chinese countryside, cramming them into vast workhouses and crowded dorms, then spitting out the ones who struggle to keep up.
Yu fits the profile to a T. In February 2010, she left her village in central China in order to earn money to support an impoverished family. As a leaving gift, her father scraped together about ¥500 (just over £50) and a secondhand mobile so she could call home. After a journey of nearly 700 miles, she was taken on at Foxconn. The employee handbook urged: "Hurry towards your finest dreams, pursue a magnificent life."
But Yu doesn't remember her daily routine as particularly magnificent. Managers would begin shifts by asking workers: "How are you?" Staff were forced to reply: "Good! Very good! Very, very good!" After that, silence was enforced.
She worked more than 12 hours each day, six days a week. She was compelled to attend early work meetings for no pay, and to skip meals to do overtime. Toilet breaks were restricted; mistakes earned you a shouting-at. And yet there was no training. In her first month, Yu had to work two seven-day weeks back to back. Foreign reporters who visit Longhua campus are shown its Olympic-sized swimming pools and shops, but she was too exhausted to do anything but sleep. She was swapped between day and night shifts and kept in an eight-person dormitory where she barely knew the names of her fellow sleepers.
Stranded in a city far from her family, unable to make friends or even get a decent night's sleep, Yu finally broke when bosses didn't pay her for the month's labour because of some administrative foul-up. In desperation, she hurled herself out of a window. She was owed £140 in basic pay and overtime, or around a quarter of a new iPhone 5.
Yu's experience flies in the face of Foxconn's own codes, let alone Apple's. Yet it is surely the inevitable fallout of a system in which Foxconn makes a wafer-thin margin on the goods it produces for Apple, and so is forced to squeeze workers ever harder.
The suicide spate prompted Apple CEO Tim Cook to call on Foxconn to improve working conditions. But there is no record of him providing any money to do so, or even relaxing the draconian contractual conditions imposed on Foxconn. Asked about it yesterday, Apple's press office said it did not discuss such matters and directed me to the company's latest Supplier Responsibility report. A glossy thing, it opens with "what we do to empower workers" and describes how staff can study for degrees.
After her suicide attempt, Yu received a one-off "humanitarian payment" of ¥180,000 (£18,000) to help her go home. According to her father: "It was as if they were buying and selling a thing." Last year, Tim Cook received wages of $4m – it was a big drop on the package he took in 2011.
http://www.theguardian.com/commentisfree/2013/aug/05/woman-nearly-died-making-ipad

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MR Venkatesh - Indian economy comes to a fullstop

Posted on 22:25 by Unknown
A fairly large South-Indian group with varied business interests had invited me to a strategy session to turn it around. It was the first meeting and was to be preceded by breakfast. As we waited to be served, I perused their latest balance sheet. Noticing that it was a profitable, tax and dividend paying company, where was the question of turnaround I wondered? Nevertheless, I instantly zeroed in on the balance sheet. I observed that the company had invested approximately Rs 700 crore on its subsidiaries and lent another Rs 300 crore — in the aggregate Rs 1,000 crore. Flipping across the accounts, I asked a simple question – what is the return from this investment of Rs 1,000 crore? (Amounts changed for obvious reasons.) The CFO was silent. The executive director hummed and hawed. The body language of the rest was a dead giveaway of their uneasiness to discuss this matter further.
The junior-most amongst them blurted out, perhaps unwittingly, that it was virtually nil. His answer got a cold stare from his superiors. “Nil!” I exclaimed to the horror of my hosts. “You must be paying approximately Rs 150 crore as interest annually on this sum.” I commented, probably rubbing salt into their wounds. I went on to probe further, “Why, what happened to this money?” This time my question was followed by thundering silence. Even the junior one was quiet this time around. May be he had already got the message. As I helped myself to the breakfast I noticed radio silence at the table. Was I at a funeral?
Between mouthfuls, I attempted to be at my persuasive best. Probably my training as a chartered accountant helped me. Unable to bear my repeated questioning, the CFO finally broke down. “Sir, as you are aware we are in infrastructure. That requires tremendous pay-offs to politicians and bureaucrats. We have used approximately 150 subsidiaries, some of which are foreign ones, to route these payments.”
I was stunned. My jaw dropped. “Sir, we expected you to know all these practicalities of our business. The turnaround strategy needs to factor these ground realities.” Obviously, this time around I was at the receiving end. The breakfast meeting concluded abruptly. 
Importantly, I understood that India’s outbound investment policy was not a liberalisation process, but a facilitation one – one that ensured smooth pay-offs! Importantly in this mess, businessmen, politicians, professionals, bureaucracy, judiciary and even the media are involved. No one can blame the other.
The economics of kickbacks and payoffs
Instantly my thoughts raced to the Nira Radia tapes. Fifteen per cent was the kickbacks payable to the Minister concerned for approving every road contract. Add another fifteen to the bureaucracy and local politicians. Add another five to seven to bankers, lawyers, consultants and agents to procure funds. What we have is a staggering 35-40 per cent additional cost to every infrastructure project.
That implies a road project costing Rs 100 crore would in effect be a Rs 140-150 crores project. Naturally, the toll for the stretch would not be Rs 100 but Rs 150. This has profound implications for the Indian economy. This extra Rs 50 in toll levy for every 100 km has a cumulative effect on the manufacturing cost. The net result – imports from most of our neighbors of several items [despite cost of transportation and customs duty] are competitive than manufacturing the same in India. Forget competing abroad, Indian manufacturing has become uncompetitive in India!
There is another dimension to this issue. Somewhere down the line these “costs” were funded, mostly by our banks. Corporates altered their top-line as well as bottom-line to keep their banks in good humor. The Banks in turn suspended their sense of disbelief. As chartered accountants we too played ball in creating a mini-Satyam in most of India’s corporates.
The impact of gold plating
But this gold platting of balance sheets cannot be done beyond a point. Everything has a breaking point isn’t it, especially as the economy tanked? These developments were brilliantly captured by a Report by the Centre for Monitoring Indian Economy (CMIE) “As the topline growth continued to slow down, the manufacturing sector as well as the non-financial services sector saw profits fall in the March 2013 quarter compared to the year-ago levels. Operating profits of the manufacturing sector excluding the petroleum sector fell by close to four per cent while the net profit fell by a sharp 23.2 per cent.”
The report goes on add “The non-financial services sector managed to improve its sales growth from 3.2 per cent in the March 2012 quarter to 6.5 per cent in the March 2013 quarter on account of sectors like transport services and software. However, at the net level the sector saw a sharp 28.3 per cent decline in profits.”
Well, both the manufacturing and services sector are going bust.
Simultaneously the CMIE points out that the “Commissioning of projects dropped sharply to Rs 337 billion during the quarter ended June 2013 from Rs 827 billion in the June 2012 quarter. This was lowest since quarter ended December 2006.” Macro-economic data too corroborate these numbers. From a growth rate of 7.5 per cent in the first quarter of 2011-12 growth rate has witnessed a steady fall in the next seven quarters to less than 4.8 per cent in the fourth quarter of 2012-13.
If data released by the Finance Ministry for the first two months of this fiscal is any indication, manufacturing has recorded a negative – yes negative growth of two percent, mining a negative of 5.7 per cent, capital goods a negative of 2.7 per cent, consumer goods a negative of 4 per cent and consumer durables a negative of 10 per cent. In short, when it comes to manufacturing, forget growth, we are in negative zone.
The net result – twenty per cent of lending by Indian Banks is stressed. Obviously, when banks end up funding pay-offs and kickbacks, this is the end result. And that is a whopping Rs 11 lakh crores – approximately $200 billion – a sum that even the banks in USA cannot afford. Added to this is the stress on account of our external accounts. The foreign debt has risen to $390 billion. This was a mere $225 billion in 2008. What is galling is that the foreign exchange reserve has remained at a constant $300 billion during this period. Needless to emphasise, the ratio of foreign exchange reserves to foreign debt has deteriorated from 138 per cent then to less than 75 per cent now.
What is adding to the consternation is that in the short term – by March 2014 – we need to pay approximately $172 of our foreign debts. This works out to approximately 44 per cent of the external debt and a staggering 60 per cent of the total foreign exchange reserves of the country. The short-term external borrowings are surely the villain of the piece. Remember in 1991 the short-term external debt was a mere 10 percent of the total external debt. Now it is one-fourth.
Another important parameter – India’s net international investment position [the net claims of non-residents against external claims of residents] stood at a negative $225 billion as at 30th June 2012. This deteriorated to a negative of $307 billion by March 31, 2013. That implies an addition of $82 billion in a matter of mere nine months.
Simply put, Indian manufacturing by and large is uncompetitive at current exchange rates. And if Rupee is devalued, prices of imports, especially crude oil, would increase leading to an inflationary spiral. Either way, that means increased unemployment. The services sector too as pointed out above is spluttering. And remember agriculture has been historically recording sub-three percent growth in the best of times. As we witness large-scale unemployment, purchasing power in the hands of the people is rapidly decreasing. That implies demand compression which in turns puts the economy once again on the downward spiral. Add to this the absolute lack of governance, indecision and Governmental apathy – you would know what it means to do business in India. Whatever be the reason – political or otherwise — bureaucracy in Delhi has simply refused to function. Likewise every assessment with our revenue departments ends up as extortion.
Unfortunately the Government’s response has been pathetic. Surely, increasing FDI limits is not reforms. On this the UPA Government is completely off-target. What makes the set of reforms scandalous is that the Government is indirectly bribing foreigners to invest in India. The Jet-Etihad deal is a case in point.
Put pithily, we are witnessing a repeat of the 1991 crisis. This time around, it is threatening to make the previous one look like a walk in the park. Well what makes the crisis different this time around? Contrary to the popular belief this is not an economic crisis, this is a crisis of national character. Forget fiscal, revenue and current account deficits – let us first talk about morality deficits.
MR Venkatesh is a Chennai based chartered accountant
http://www.niticentral.com/2013/07/22/indian-economy-spirals-to-a-fullstop-107779.html
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