General election 2019 blues

This is a waveless election (2019) wherein the preference or dismissal of a leader and issues seem to be pre-determined by the social background (caste and community) of voters. 

• The BJP  won 31% of the vote with 282 seats nationally in 2014. This is the highest vote to seat conversion indicating heaviest fragmentation of the anti-BJP votes. Plain arithmetic suggests that if all major non-BJP forces come together, the Modi machine will halt.
• Today BJP today rules 17 of 29 states (a year ago 21/29 states), either directly or with its allies. Despite BJP's countrywide presence, it is also true that the opposition has been winning most of the Lok Sabha by-elections which is a sign of defeat for the Modi-Shah combine in these elections.
• Anti Modi factors are: Demonetisation, GST, cow vigilante  lynchings, agrarian crisis, unemployment, inflation, cattle trade ban, etc.
• Pro Modi factors: Good governance, divided opposition, Balakot airstrike, surgical strikes, absence of major scams, etc. Factors such as welfare schemes like the PM Awas Yojana, Ujjwala Yojana (free LPG cylinder connection to BPL families), Rs 2,000 to the farmers, are secondary reasons for BJP.
• BJP which won in UP (71/80 seats), Rajasthan (25/25), Gujarat (26/26), Bihar (31/40), MP (27/29), Chattisgarh (10/11), Maharashtra (22/48) and Karnataka (17/28), in 2014, may lose most of these seats in 2019. 
• There is no perceptible Modi “wave” this time and the muscular nationalism plank that the BJP banks on fails to evoke the required response in the face of widespread agrarian crisis.
• The public resentment against the BJP governments is glaringly evident even though some believe that Modi has no alternative. It is also clear the BJP is not adding any new constituency of voters. The trends point to a clear reduction of the BJP’s tally from its commanding position of 2014. 
• Stung by the failure of the campaign based on muscular nationalism in the early phases of voting, the BJP desperately looks for new strategies and altered roadmaps, with emphasis on Hindutva. The candidature of the Malegaon blast accused, Sadhvi Pragya Singh Thakur, in Bhopal against Digvijaya singh is a major step towards Hindutva consolidation.
• Modi's election campaign is increasingly looking like his style of governance over the last five years, particularly the manner in which demonetization and GST were pursued. A new narrative every day, with new reasoning and strategies along with altered road maps to attain a proclaimed objective. This could also lead to results as chaotic as demonetization and GST produced.
• Congress party has scored some vital points in terms of ideation of new policy initiatives and programmes, but has failed to follow this up with solid organisational initiatives and electoral strategies.
• In Uttar Pradesh, multiple narratives are impacting the election in different ways. BJP's candidate's weaker profile as compared to BSP-SP-RLD alliance is widely acknowledged.
• People are not interested in communal issues but have economic concerns. The BJP had impar­ted a larger-than-life cult image to Modi. Even now they are projecting him as a lone lion in the jungle versus the rest. This is not going to work now.
• Had even a single person been killed in Pakistan by our our strikes, would they have returned Wing Commander Abhinandan in one single piece within days? Is Imran Khan not answerable to the people of Pakistan? So how did Amit Shah claim we killed 250 Pakistanis!” -- Raj Thackeray 
• EVM's are neither easy to tamper with and at the same time not tamper proof. Its non-transparent mechanism gives scope for losing candidate to think that EVM has been tampered with. Unless public confidence is earned, EVM will remain a contentious issue. EC telling that EVMs are perfect without explaining how they are perfect is nonsense.
• This election is not about who wins but to ensure that the BJP loses so that the nation survives. “We will take on each other later.”  -- Raj Thackeray 
• Mukesh Ambani had recently extended his support to Congress candidate Milind Deora in South Mumbai constituency. Raj Thackeray called this shift in Ambani’s loyalty from BJP to Congress is a big message to the country. Ambani is Uddhav Thackeray’s close friend but decided to side with a Congress candidate is a clear indication that Modi is heading towards defeat.

As things stand today, a weak opposition is Modi’s biggest strength and he is likely to benefit from the TINA (there is no alternative) factor the most, with other positives contributing towards making him virtually unassailable. Reactions from the echelons of the Sangh Parivar after the first two rounds of polling point towards a sense of unease. Many leaders admit that there is a possibility that the BJP would only win half the seats it had in 2014. 

Jammu and Kashmir Governor Satya Pal Malik’s act of dissolving the Assembly when three non-BJP political parties in the State were on the verge of forming a coalition government is of a piece with the systematic undermining of democratic polity. Modi unleashing CBI, ED, Income Tax etc on all anti-BJP parties terrorizing opposing candidates and immobilizing their associates is gross misuse of institutions which are supposed work autonomously. In order to safeguard democracy it is important that Modi & BJP must be defeated in this 2019 elections and be watchful that future governments don't follow the same path. 

Reliance Communications is sinking

• Reliance Communications, 7th largest telecom service provider posted its yearly loss of Rs.1,283 crores.
• Its debt stood at Rs.45,733 crores, as on March 2017, prompted banks raise red flag.
• Rating agencies downgraded RCom over debt concerns.
• In seven days, RCom stock tanked 33%.
• The lenders has granted seven month standstill on the debt.
• By Dec 2017, it will have to conclude merger deals with Aircel and sale of 52% Reliance Infratel's equity to Brookfield infrastructure for Rs.25,000 crores to pare down its debt to Rs.20,000 crores.
• Debt pile up was due to its decision to switch from CDMA to GSM and purchase of 3G spectrum at Rs.8,585 crores.
• And then company landed in debt trap i.e. borrowing money to repay debt.
• Reliance Jio's aggressive marketing has impacted smaller companies like RCom losing its subscribers. While Airtel experienced severe contraction of profits all others viz. RCom, Idea, Vodafone etc slipped into losses.
• They expect reduction in market share resulting in pressure on margins.
• In last quarter RCom lost 29.5 million customers, whereas Airtel and Idea gained 22.41 and 14.4 million customers.
• The current issue is partly due to delay in shifting from CDMA to GSM that resulted in its low value subscriber base. Initial attempts to upgrade to GSM has not yielded any good results.
• Today it has 62,000 cell sites compared to Idea-Vodafone's 273,000 and Airtel's 185,000. 
• As investments slowed so are subscriber additions, as people chose operators with superior networks.
• RCom plans to sell of its Dhirubai Ambani Knowledge City's 135 acres in Navi Mumbai and 4 Acres property near Connaught place New Delhi to retire its remaining debt.
• RCom proposed to surrender part of spectrum to escape payment liabilities to DoT. 
• Merged entity AirCom of RCom-Aircel-MTS with its 10% market share, sub optimal quality subscribers, less spectrum and debt burden will find it hard to service with its prevailing EBITDA. 
• It is even more tricky to incur capex for modernisation given its financial health and inability to raise bank loans.
• Anil Ambani's elder brother, Mukesh Ambani, might not allow RCom to die because of its name "Relaince" attached to it.

My View:

While AirTel, Idea and Vodafone continuously invested in capex, spectrum and marketing to increase its presence and value, RCom did nothing of that sort and landed in trouble. Also banks are to be blamed which funded Reliance Jio to the tune of Rs.180,000 crores only to trouble the saturated telecom sector pulling down almost all telco's with combined exposure by banks to the extent of Rs.400,000 crores. SBI Chairman expressed concerns about telco's combined EBITDA dropping to levels where debt servicing becomes hard and their loans might get turned into NPA's. Needless to say like in any other case, here too promoter owners will walk off with riches, banks will get charge of worthless assets and will have to take huge haircut. And then PSU Banks will look at centre to recapitalize them. Same old story repeating.

Telcos in India deep trouble

• Until a year ago, all Telcos in India were fairly well off making impressive profits with stock prices attracting investors.
• With Reliance Jio launching its operations, a year ago, with its inaugural FREE offers compelled the existing Telcos to spend massive amounts in advertising and customer retention activities that resulted in erosion of their handsome profits and landing them with huge losses.
• The data with us suggests that the total EBITDA (earnings before interest, taxes, depreciation and amortization) of the sector on an annualized basis is Rs 65,000 crore, which is clearly unsustainable for debt of more than Rs 4 lakh crore," the SBI chairperson said.
• Now Indian banking sector already reeling under insurmountable NPAs of over Rs.7 lakh crores stands exposed to another huge risk of over Rs.4 lakh crores.
• While Mukesh Ambani's borrowings from Banks is over Rs.1,80,000 crores and his investment in Reliance Jio is estimated at Rs.1,50,000 crores against its original estimate of Rs.85,000 crores. His strategy was to destroy competitors and monopolize Telco business with its advanced VOLTE technology is dealing deadly blow to existing Telcos namely Airtel, Vodafone, Idea, Reliance Communications, BSNL etc.
• The ongoing consolidation in Telco sector in India will result in job losses to the extent of 40,000 this year.
• Mukesh Ambani used Bank's money to push Banks to the brink of collapse. It is a matter of time Telcos loans of Rs. 4 lakh crores will become NPAs. How Reliance Jio will pay back its Rs.1.5 laks crores is  a million dollar question.
• The loans to Mukesh Ambani were granted by Banks during Modi's tenure i.e. during past three years as quid pro quo for funding his 2014 election campaign expenditure.
• Whether Mukesh Ambani will be able to make profits for Reliance Jio amidst chaos in Telco sector and repay banks is another million dollar question. How many more years he will hang on, we will have to wait and see.
• In all Indian Banks stands exposed to monumental risk of Rs. 5.50 lakh crores in Telco segment, in addition to existing NPAs of over Rs.7 lakh crores.
• Since three years Banks were unable to invest in infrastructure segment and other high value projects due to paucity of funds. This has resulted in GDP growth looking southward in addition to the deadly blow dealt by mindless demonetization 2016.
• Meager budget support for inducing additional capital, public sector banks are simply biting time and recent ordinance with code for NPAs recovery being worthless and with discouraging global parameters, Indian economy today is spiraling down at breakneck speed with all economic indices looking southward there is no magic wand to halt this except looking towards sky for 'ache din'. But 'ache din' will come only when decisions are sound and implementation is faultless but not for rhetoric and high decibel shouting.

My View:

A decade ago while launching Reliance Infocom services Mukesh Ambani's statement is paraphrased as "I wouldn't be interested in a bigger piece of smaller pie but would rather aim at smaller piece of larger pie". But today he stands exposed to bulldozing competitors with his money power and establish monopoly in Telco market and eventually loot the consumers. All this facilitated by none other than Modi. While bank NPAs are result of reckless activities by UPA regime, destruction of Telco sector and monopolizing by Reliance Jio and further burdening of Banks and job losses is the creation by Modi himself.

Mukesh Ambani and Ratan Tata Homes in Mumbai

• Mukesh Ambani’s ostentatious residence 'ANTILLA' on Altamont Road in Mumbai. Ratan Tata’s new bungalow 'CABINS' is at Colaba in Mumbai.
• While the 27-floor Antilla is as tall as a 60-storey building, Cabins is just three storeys tall. 
• Antilla will engage 600 staffers to look after the residence cum office which has a two-storey yoga studio and health centre, a dance floor, a ballroom, and an ice room. The building also boasts of a four-storey open hanging garden and a 50-seat mini theatre.
• The elder Ambani’s house has space for 168 cars, but Ratan Tata wants no more than 10 cars.
• The estimates are that Mukesh’s 4,770 sq m plot with 400,000 sq.ft floor area mansion cost over Rs.4,500 crore. Tata’s home is a mere 1,200 sq m land and 13,350 sq.ft floor area, if sources are to be believed, cost just Rs.10 crore.
• While Ambani has built three helipads (which he cannot use till the defence and environment ministries give their nod), Tata has categorically said no to having them at home.
• Ratan Tata chooses elegance in comparision to Mukesh Ambani's choice of extravagance.

Tata group chief Ratan Tata has said he is surprised why fellow tycoon Mukesh Ambani wants to live in the opulence of a billion-dollar home in south Mumbai. "It makes me wonder why someone would do that," Tata said in an interview published on Saturday in The Times newspaper of London. "The person who lives in there should be concerned about what he sees around him and (ask) can he make a difference," Tata said when asked about Antilla, the 27-storey Ambani home on Altamount Road. "If he is not, then it is sad because India needs people to allocate some of their enormous wealth to finding ways to mitigate the hardship that people have." Expressing concern about the rich-poor gap, Tata said, "We are doing so little about the disparity. We are allowing it to be there and wishing it away.".

There has been no comment from Reliance Industries in this matter.

"Posterity will remember you for simplicity and for being a giver 

and never for vulgarity of extravaganza and amassing wealth"