Demonetization: A bad idea even badly implemented

In the past, the Soviet Union, North Korea and Zimbabwe and other nations also took draconian steps to retire large bills, but most were responding to crises marked by hyperinflation, and were ruled by dictators. India may be the first democracy to attempt this kind of purge in stable economic times.

Prime Minister Modi in his televised address to nation on Nov 8, 2016 announced demonetization of Rs.1000 & Rs.500 currency notes to eliminate (1) black money (2) corruption (3) fake currency and (4) Terrorists operating cross border but failed to give any justification how these complex things will be achieved by a single step with devastating effects on states revenues, agriculture, real estate, retail, informal sector, cine industry and many more effecting 850 million people very badly.

On some simple analysis it would be clear that the stated objectives i.e. four objectives will not be achieved by this step but this action has political undertones with eyes on forthcoming UP elections, then RS elections, followed by President and Vice President elections.

• Black money which is over 20% GDP ($2.25 trillion or Rs.150 lakh crores pa) amounts to Rs.30 lakh crores pa. Out of which is it is in the form of cash by only 6% of cash in circulation (Rs.17 lakh crores) and i.e. Rs.one lakh crores.
• With Rs.2000 and Rs.500 new notes replacing existing Rs.1000 & Rs.500 only black money stocked in cash gets emptied but corruption & black money generation will remain unaffected.
• Fake currency is just 0.028% of cash in circulation (Rs.17 lakh crores) i.e. 476 crores only, a minuscule component. Printing Rs.2,000 notes alone costed Rs.12,000 crores apart from logistics & exchanging expenditure. 
• Terrorist fake money mainly printed by ISI from Pakistan will only get effected and the existing stocks held in Pakistan will be effected. With respite of few months it will come back to normal state. Needless to stay 1,400 km border mostly on plains is impossible to seal. Only active vigilance can control this menace.
• Bulk of the terrorist money is routed through normal banking channels reaches sleeper cells in various cities. The demonetization have no effect on them.

Demonetization might give some instantaneous benefits - cash profits to central government due to unchanged cash (estimated at 20% i.e. Rs.3.5 lakh crores) for reducing its deficit, strengthening banks base and still have surplus cash hand during the year of demonetization. But taking into consideration significant reduction of states revenues, GDP growth reduction and its devastating effects like impact on cash sectors like agriculture, retail, informal sector, real estate, cinema industry and almost all aspects of economy and more importantly enormous difficulties faced by 30 crore people in exchanging notes and disruption of services, the losses far out weigh benefits and it is nothing but insanity to resort to this unscientific political step during stable economic times eyeing only on political benefits, which may or may not accrue. Immediate deflation followed by inflation violent volatility pushing the economy to brink of collapse, is another aspect. This is like jumping into well and committing suicide, in the name of radical measures.

Almost all the bank loans have real estate as mortgage which is over valued by at least 4 times. With real estate values plunging to below 50% mark, the willful loan defaults will increase and banks viability gets threatened.

Scrapping large currency notes may destroy some hidden wealth today, but the black economy will start regenerating itself tomorrow. Only as a nation gets less poor do corruption, black money and the role of cash decline. There is no shortcut. The least corrupt countries tend to be richest countries from Singapore (Per capita $85,382) and Norway (Per capita $68,591). They are small too 5.40 & 5.16 million. In contrast, India is country with 130 crores population, per capita income of $1,718 (Rs. 114,000), 26% illiterate, 29.5% below poverty line of Rs.32/47(Rural/Urban) etc. corruption and black money will exist in some form of other. The prudent way is to keep them under control with strict processes and vigilance.

INDIA - STATISTICS

• GDP of India is $2.25 trillion (Rs. 150 lakh crores) and per capita income of $1,718 (Rs. 114,000).
• India ranks 7th and contributes 2.65% of total world's GDP.
• India shares 17.5 percent of the total world population and 2.4 percent of the world surface area.
• Cash in circulation amounts to 12% of GDP.
• The black economy is about 20% of the formal economy.
• Tax collections amount to 16% of GDP, at least 5 points less.
• Bank deposits amount to 60% of GDP, strong for a poor country.
• India currently ranks 76th in corruption.
• Rs.1000 & Rs.500 notes constitute 86% of Rs.17 lakh crores currency in circulation.
• 20% i.e. Rs. 3.5 lakh crores is unlikely to return to banks for exchange leaving windfall to RBI & Central Government.
• Black money in the form of cash is 6% of cash in circulation i.e. Rs.1.02 lakh cores.
• 90% of transactions takes place in cash. Remaining in credit/debit cards and other modes.
• Fake currency is just 0.028% of cash in circulation of Rs.17 lakh crores is just Rs.476 crores.
• Cash stocked with naxalites extortion is of Rs.5,000 crores.
• Printing new currency alone costs Rs.12,000 crores apart from logistic and exchanging expenses.

TELANGANA SEVERELY EFFECTED

Demonetization of  Rs.500 and  Rs.1,000 currency notes, it seems to have dealt a body blow to nascent Telangana State, pushing its finances deeper into turmoil. The sectors or schemes expected to be severely affected are major and medium irrigation, Mission Kakatiya, Mission Bhagiratha, roads and buildings, housing, social welfare schemes such as Aasara pensions, Shaadi Mubarak and Kalyana Lakshmi, pre and post-matric scholarships and fees reimbursement, partial waiver of farm loans, power subsidy for farm sector, release of funds for panchayat raj and urban local bodies, interest payments and servicing of debts, etc.

The revenue will be just enough to pay salaries, allowances and pensions of government employees. Drought in the previous two years and flash floods in the current year have impacted the state's economy. Demonetization has compounded the woes.

Modinomics is literally bleeding the Telangana State red!
KCR is flabbergasted with all his next election winning strategies blasted and in rubble, apart from he, his family and his party's accumulated black money gone.


NORMALCY RESTORATION IS MORE THAN A YEAR AWAY.

Replacing Rs.500 notes, printing of which started on Nov 10, 2016 is likely to take at least 6 months with all four security printing presses going on 3 shift basis with 80% load factor. That means currency woes will ease by May 2017 only. Economy with acute shortage of cash for 6 months is likely to undergo violent volatility of deflation and inflation and collapse is not ruled out. Coming back to pre Nov 08, 2016 level is at least two years away.


ECONOMISTS IGNORED

Anil Bokil a member of the Pune-based ArthaKranti Sansthan, has propounded the concept of Artha Kranti – an economic solution designed to end the vicious cycle of corruption with specific focus on black money. It seems Prime Minister Modi granted 9 minutes and extended to 2 hours audience and and made up his mind for the proposed the demonetization of high value currency notes.

Making payment systems miserable for transactions leads to bartering or using gold as medium of exchange or a combination.  As long as corruption is a low risk and high profit activity it will flourish. Systemic modifications should result in increasing the risk and minimizing profits apart from ethical education and convincing the people that paying taxes is for their well being. Today, no Indian believes this.

It is so much easy to design variety of mathematical models ignoring people's psychology. Modi himself escalated to throne with the help of corruption money, rogue politicians and greedy businessmen. Today talking scriptures is no use. What is important is to modify system with built in incentives for tax compliance and at the same time increasing the chances of getting caught and penalized to bring corruption to unprofitable levels.


NONE TAKES RESPONSIBILITY

• In a democracy, not consulting economic institutions and legal experts and driving the nation to this type of brink of collapse is nothing but madness and committing suicide. 
• Where is the detailed plan with risks and its mitigation? 
• The procedure has been modified 13 times in 6 days of panicky management. 
• RBI Governor is hiding. 
• PM cries and invokes patriotism and begs for 50 days patience.
  Patriotism is to be invoked during emergency situations only.
  On Nov 8th situation was very much normal.
• PM evades his presence in Parliament. 
• PM announces his life is at threat but doesn't let us know why the matter is not handed over for investigation? 
• FM & others simply says people need to make short term sacrifices for long term benefits. Does they mean to say that in short term poor & peasants have to sacrifice and in long term rich, educated, rogues and loafers will garner benefits for themselves? Why no body is taking responsibility for the situation which landed 90 crores of people standing in streets under hot sun for several hours for nothing.
• Today, after 13 days of demonetization, cash and economic activity situation is totally out of control and fortunately rites haven't erupted. Despite 55 deaths, Government has not announced any mitigation steps except making some speeches of patriotism and patience and long term benefits after 2 years. 
• Poor and peasants are left to the mercy of God.
  Shamelessly they say easing would take 50 more days.

It is worthwhile to recollect how much caution Israel Prime Minister Yitzahak Rabin exercised before approving "Operation Thunderbolt" a daring military rescue operation of hijacked hostages of Air France plane and held about 100 Israeli passengers & French crew at Entebbe airport in Uganda in 1976.

On the contrary, on Nov 8, 2016 our flamboyant "chaiwala" Prime Minister Narendra Modi announced "Demonetization of Rs.500 & Rs.1000 notes" based on some body's presentation about structural changes in economy without any deep study and understanding repercussions plunged the nation into economic chaos and mitigation would require about six months and recovery is at least two years away. It is just like jumping into a well and committing suicide.

Finally, the currency is an instrument issued by RBI and Government has no role in managing that except by an Ordinance followed by an Act of Parliament. Modi announced demonetization by an executive decision which is grossly illegal and its legality will be scrutinized in courts.

Demonetization: An Economic & Political Disaster

PM Modi announces demonetization of Rs 500 and Rs 1000 currency notes

PM Narendra Modi on his televised address to nation on Tue Nov 08, 2016 at 8PM on announced the demonetization of Rs 500 and Rs 1000 currency notes and said the move was aimed at curbing the negative impact of fake currency, black money, corruption and terrorism on the nation's economy. Pakistani spy agency ISI was pumping fake notes of Rs 500 and Rs 1,000 to finance terror activities within, even earning a handsome profit of around Rs 500 crore per annum in the process.

The immediate impact was that citizens were stunned and dismayed, who never experienced demonetization in the past, found themselves with all their cash worthless, transactions in pipe line stalled or aborted, property values eroded with only few hundreds of rupees left. Small business owners & daily wage earners surviving on day to day work for making living are so much helpless today with no activity and income, how to pay monthly bills at the beginning of next month. Not many have any reserve cash.

Demonetization is not new invention by Modi & Co. In the past many countries did it but none achieved even 10% of the targeted benefit. Morarji Desai's 1978 demonetization was a utter flop then. What made Modi to believe this would do would do wonders for him, despite inherent risks and with no proper plan for mitigation & implementation? The guy who advised Modi and influenced him must be sacked at once for his irresponsible projections.

While the told reasons are impressive and in the interest of the nation the untold reasons are purely political for the following reasons:

1. All economic parameters are well within limits.
2. Annual economic growth rate at over 7% is impressive.
3. UP Elections are slated for early 2017. 
4. BJP is desperate to win UP elections. Otherwise their numbers in Rajya Sabha will remain minority for reminder of Modi's term. BJP candidate will have uphill task in winning President & Vice President elections next.
5. Fake currency below Rs.1,000 crores is less than 0.01% in the economy size of our country.
6. Black money is nothing new. There are many ways of dealing with it seamlessly.
7. Terrorism control can't be achieved with demonetization alone. 

Demonetization involves printing of currency in large quantities with additional security features, logistics for quick exchanging, disposal of withdrawn currency, toning up Post offices, Banks & ATMs for handling new currency, and above all secrecy of operation until announcement and is a year long activity to ensure minimal impact on common man as well as on economic activity. Modi's hasty announcement within 2 months of Present RBI Governor Urjit Patel, with no proper arrangements -- points needle towards politics rather than any economic expediency or nation's well being. Needless to say the previous Governor Raghu Ram Rajan was never blindly obliging MoF/Govt but used to make decisions focused on primarily inflation control and anything else next.

See what Raghu Ram Rajan thinks on the current Demonetization.


VIOLATION OF CONSTITUTION

Demonetization by an executive order is improper. Govt should have proclaimed an ordinance and immediately enacted law. Misuse of authority without proper constitutional authorization indicates highhandedness of the Prime Minister Modi and his dictatorial tendencies.

Article 21 which reads as follows:-
Protection Of Life And Personal Liberty: No person shall be deprived of his life or personal liberty except according to procedure established by law.

The demonetization had thrown out millions of people in "informal sector" etc without livelihood. There was no process of law which has been followed. Depriving livelihood tantamount to depriving life and personal liberty, Supreme Court ruled in the past.

Our Jurisprudence is based on the Blackstone's formulation is that: "It is better that ten guilty persons escape than that one innocent suffer".


HUGE COSTS

Modi’s startling and sudden move to withdraw 500 and 1,000 rupee notes a week ago has left India with 14% of its currency in circulation. Small businesses, real estate, gold and the informal sectors -- which see a high component of cash transactions -- have been affected as hundreds of thousands of people spend time in long queues to exchange currency rather than working. The informal sector (which is 40% of economy & provides 65% jobs and livelihood to 850 millions) has come to grinding halt and revival is estimated between 6 months to two years.

1. Printing of new currency notes Rs.12,000 crores.
2. Improper arrangements derailed economy and recovery would take at least 2 months.
3. GDP lost Rs. 2-3 lakh crores.
4. Growth rate is likely to be reduced by 2%.
5. RBI's likely to gain Rs.3 lakh crores of black currency not deposited.
6. Naxalites lost their extorted and concealed amount of Rs.5,000 crores.
7. Fake currency made redundant about Rs.1,000 crores.
8. Informal sector, Agriculture etc effected people over 850 million.
9. Enormous stress borne by bank employees dealing with unending queues, fear of giving away more money, extended work hours for several days in a row, petty quarrels with customers leading to stress.
10. Public standing in serpentine queues for several hours only to get exchange worth Rs.4,000.
11. At least 50 deaths reported standing in long queues for currency exchange.

Demonetization inflicts some losses but black economy is likely to remain


UTTER CONFUSION & CHAOS

First two days were bank holidays the truth that Rs.500 & Rs.1000 notes are worthless sunk into brains of people. From Nov 11, 2014 long serpentine queues were common scene before every bank with ATMs derated to just 10% of its capacity dispensing only Rs.100 notes. Only 50% ATMs are operational due to poor maintenance. The new Rs.2,000 notes were as good as worthless since none in the market accepted for payment with very little change available with them. With less than 14% currency left in the economy retail took immediate beating with retail sales less than 30% and informal sector grinding halt with no cash.

Modi should remember that the people standing in long queues certainly don’t have the mindset of a soldier fighting a national cause but only have curse words for the government for turning their lives into a nightmare. Modi must have acknowledged this state of affairs, the failure of the government on execution front and promised to resolve the issue as early as possible. Instead, he warned about further measures post December 30, 2016, when the deadline expires. This will only add to the panic since people would start speculating that what the next blow is going to be.

Common man would need to pay to his vendors, a majority of whom still live in the cash economy, for whom PoS terminals, plastic money, PayTm are all still fancy words. While in metros like Mumbai and Delhi, people still have the possibility to use plastic money to meet most of the daily needs, in the semi-urban areas and villages, life will turn hell when ATMs dry out of money, daily labourers are denied wages because their employer doesn't have cash and kirana wallah frowns when asks for credit yet another day.

The mob psychology works in full swing on such occasions. And that psychology would drive the common man into a panic mode, telling him to run fast to the nearest bank branches and ATMs to withdraw maximum possible amount permissible (as of now Rs 2,000 per day), even if he doesn’t need that amount. It is getting clearer that economy is heading to politically motivated & fast reaching point of disaster. While many are still hopeful that this landmark initiative will reap dividends eventually, deeper analysis concludes it is not only poor politics but also an unmitigated disaster.

With commodities supply-chain-retailing systems crashed, shortages will be come order of the day in coming days.

Armed with shots to fire, opposition parties have common cause to conduct street agitations and Modi is helpless in dealing with them. Politics without principles leads BJP to nowhere. BJP leaders are now arguing that in long term demonetization benefits nation, in low voice. Despite demands and obligation, Modi hasn't attended Parliament last two days.


CASHLESS PAYMENTS

The idea of a cashless economy sounds great. But it is viable only at high-end convenience stores, shopping centers, malls etc along with the online shopping industry. The transaction overheads is an added cost to consumer indirectly or directly. Not all commodities have that much margins for seller to pay these costs. Also high cost items like cars etc, it makes sense to avoid cashless payment and save some bucks.

The fear of unfamiliarity is very fundamental and money matters are serious; hence the reluctance of consumers to shift from cash to plastic, even for across the counter transactions. As for online transactions horror stories of cyber-crime and sheer unfamiliarity with online payment systems is the basis of this reluctance.

Cashless economy will become reality slowly with higher income levels, awareness, education levels and transaction costs coming down to affordable levels.


EUPHORIA GONE; PANIC & DAMAGE CONTROL BEGINS

Modi's demonetization flight took off without flight plan and not knowing how to and where to land. In crash landing, who knows how many will perish and how many will survive. 

1. The government was ill prepared to deal with what was going to follow and completely miscalculated the enormity of the move it was making. Every honest citizen wants his country to be free of the evil of fake currencies and black money. The miserable failure of Modi government to design the implementation in the days after the demonetization announcement, though no one is questioning the intention.
2. The situation is not likely to change soon. Finance Minister Arun Jaitley has said it will take about three weeks to replace the old notes. By then, the problem can go totally out of hand for the government. Printing Rs. 500 and  Rs.100 notes now and making available for exchanging is at least a month away. 
3. PM Modi made a bad analogy comparing the cash drought prevailing in India now, to the chaos prevailed in Japan in the aftermath of the 2011 earthquake. "People stood in line for four hours, six hours but accepted the decision in national interest the way people of Japan tackled the aftermath of the 2011 disaster," Modi said speaking in Japan. The chaos that follows a natural disaster and the will power of a society to withstand the difficult days is one thing while the chaos and disruption of normal life in a society post a “well-thought-out decision” planned months in advance by the government is another. 
4. Modi-government thought of an ideal situation where people will laud the government and put their personal miseries behind the larger cause of patriotism. "Don’t preach the scriptures to someone who is hungry" – was forgotten.
5. Over the weekend, Modi made an impassioned plea to the nation to give him 50 days to weed out ill-gotten wealth in the country. 
6. Today i.e. on Fri Nov 18, 2016,  Supreme Court refused to restrain various high courts and subordinate courts from hearing petitions against the Union government's demonetization notification, saying "people are facing real problems and we cannot shut them from moving courts to register their grievances." 
7. The ill-thought of idea to use indelible ink during withdrawal at banks will not just take more time in dealing with a customer but also, it can be easily removed. 
8. Unless the RBI & Govt increases Rs.100 notes to overcome shortage, there's a high chance that fake notes of this denomination will soon be circulated.
9. Worst is 50+ people so far died across India standing in queues for cash exchanging or stress related issues, in first 10 days.
10. Panic is reflected in unstable govt guidelines modifying every day creating confusion for the bank staff.
11. Software modifications in ATMs can't be done in hurry. Modifications are to be designed, planed for implementation. With changing procedures several ATMs are out of service and many ATMs not upto date with govt directives. In any case ATMs exhausts cash within an hour.
12. With short cash chasing too many goods - undesirable deflation is a certainty. Later improved cash position - inflation will impact economy.

Presently, the situation is not in control of the government. The long queues before ATMs and bank branches can soon take the shape of street protests. Delhi CM Arvind Kejriwal has already entered the ring, Congress vice-president Rahul Gandhi has already joined the ATM queues. It is not long before regional satraps smell an opportunity.

"In the name of demonetization, the common people are being made to suffer. Modi ji has brought miseries and pain for the poor which is extremely wrong. I would like to ask why people of the nation are being troubled like this," said Mayawati.

Former Union Minister Arun Shourie mocked the claim of demonetization of high-value currencies being a radical measure, stating that jumping into well or committing suicide is also radical.

Why hasn't the BJP-led government first targeted the black money deposited in Swiss banks as it was promised during the election campaign? The situation of crisis, in the name of "fight against black money", has affected the poorest the most. The good intention behind the currency ban and the long-term benefits it will bring to the economy will then be forgotten and Modi will run the risk a strong the anti-incumbency wave, if the cash drought continues and remedial measures are not brought into place. Better watch out for a bigger storm than the 2011 Japan earthquake, Mr. Narendra Modi.

Demonetization is bound to leave indelible impact on the nation. Shrinking economy leaves many jobless and recovery will never be the same again. Needless to say we may find ourselves pushed backwards by about 10+ years paying bitter price for Modi's adventures.

Modi's decision seemingly was in his & BJP's political interest rather than in national interest and he will go down in history as India's greatest wealth destroyer.

BJP leaders of UP felt that post demonetization blues, they have no face to show up in UP and were reluctant to either for campaigning or for erecting hoardings. They opine that Modi has effectively reduced BJP to ZERO.

"Without proper design and detailed plan, collapse is certainty"

My View:

It doesn't require an expert to say that corruption and black money is an evil that has crept into every segment of society like cancer and bulk of the blame is to be borne by Politicians from all parties. Even a clerk will tell you that there is no single medicine or surgery that can eliminate corruption and black money, instantly. The only way is awareness, leveraging technology, vigilance, creating accountability, eliminating discretionary power at all levels, reducing/eliminating cash flow in all public domain payments/transactions, emphasizing merit, etc and society would become cleaner gradually.

Keeping eye on UP Assembly elections and subsequent President & Vice President elections, Modi abruptly demonetizing currency and its inept handling has thrown the nation into chaos effecting 850 million people starving for cash & change and threatening their livelihoods.

Now that demonetizing has boomeranged, Modi has no face to show up in either Parliament or public. If any shame is left in him, he must own up responsibility for the fiasco, apologize nation and step down so that his successor would do better damage control and rehabilitation without the burden of the past. Also FM Jaitley and RBI Governor Urjit Patel should be eased out along with those who recommended this failed operation.

Had Modi followed Gandhi Talisman while making decisions, I am sure he would have made correct decisions in national interest and this chaotic situation averted. 

Gandhi's Talisman:

Whenever you are in doubt, or when the self becomes too much with you, 
apply the following test. Recall the face of the poorest and the weakest man [woman] 
whom you may have seen, and ask yourself if the step you contemplate is going 
to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] 
to a control over his [her] own life and destiny? In other words, will it lead 
to Swaraj [freedom] for the hungry and spiritually starving millions? 
Then you will find your doubts and your self melt away.

Cultured Person

A study of 2,000 people found seven in 10 believed themselves 'cultured'. Other defining characteristics included watching Antiques Roadshow. Almost a third admitted to 'faking' cultural credentials to impress friends.

• Owning a library card, watching sub-titled films and being skilled in the use of chopsticks are among the traits which make us cultured, according to a survey.
• Drinking 'proper' coffee, knowing the difference between cuts of meat and watching the Antiques Roadshow also set you apart from your less refined friends.
• However, it seems you probably don't have many of those: seven in 10 consider themselves to be 'cultured', although the majority admit to not knowing exactly what the term means. 
• The Oxford English Dictionary defines 'cultured' as 'improved by education and training; possessed of or characterized by culture, especially with reference to the arts and intellectual pursuits; refined, cultivated'.
• But a study of 2,000 people found they considered someone cultured if they simply chose city breaks over beach holidays, read a book in bed and collected music on vinyl.
• What's more, three in four believe you can be cultured despite having never left the country.
• The study also found that Brits are at their most cultured at age 38, according to the poll, and feel the most need to project a cultured persona at dinner parties, high-end restaurants and job interviews.
• Going to the theatre was named the top sign of being cultured - along with listening to classical music, having an interest in politics and the ability to recognise art.
• Simply having a library card means you're cultured said one in ten, while almost a fifth said a classy Brit would read the book first before watching a film adaptation. 

SO WHAT EXACTLY MAKES YOU CULTURED?

 

  1. Go to the theatre

  2. Can recognise paintings/art

  3. Visit local heritage sites

  4. Listen to classical music

  5. Go to the ballet

  6. Know what wine goes with what

  7. Don’t skip the news when it’s on TV

  8. Watch documentaries

  9. Can read music

10. Take an avid interest in politics

11. Read daily newspapers

12. Take countryside walks

13. Read a book before bed

14. Choose city breaks over beach holidays

15. Watch Question Time

16. Host dinner parties

17. Know about cheese

18. Enjoy crosswords or Sudoku

19. Go to vintage markets

20. Know about cuts of meat 

21. Watch tennis or cricket 

22. Read a book before the film comes out

23. Watch Antiques Road Show

24. Own a library card

25. Watch films with subtitles

26. Visit farm shops

27. Use chopsticks over a knife and fork

28. Drink 'proper' coffee - not instant

29. Know how to pronounce ''quinoa'

30. Grow your own fruit and vegetables on an allotment

31. Go to music festivals

32. Collect music on vinyl

33. Read Wikipedia articles

34. Only eat local produce

35. Get the conundrum on Countdown

36. Wear bow-ties or brooches

37. Get food from supermarket 'finer' ranges

38. Drink herbal tea

39. Put on an accent to pronounce foreign words

40. Avoid generic superstore furniture

In light of the cultural check-list, seven in ten confessed they wish they were more cultured - with 31 per cent even admitting they sometimes 'fake it' to impress others. Brits named science centres, historic houses and castles among the sites they'd be open to visiting - but 54 per cent admitted the cost holds them back.

Honesty in India

Honesty is defined as 'fairness and straightforwardness of conduct' and 'steadfast adherence to the facts'.
Tact is defined as 'the ability to do or say things without offending or upsetting other people'.
Corruption  is defined as dishonest or illegal behavior especially by powerful people, inducement to wrong by improper or unlawful means (as bribery) or departure from the original or from what is pure or correct.

In the present day world honesty is virtually despised and such person gets socially isolated while tact is well appreciated. Tact involves seemingly honest and telling white lies which are as bad as lies. In fact there is no such thing as 'white lies'. What ever is not truth, is a lie only.

In the context of black money and demonetization, the reality is that today, every Indian talks bad about black money and tax evasion but there is no Indian who does not evade taxes and deal with black money. Ironically, every Indian is corrupt with reference to its true meaning. Our constitution and laws differentiate between 'guilty' and 'not guilty' and punishments are same for less guilty or more guilty.

All these Modi adventures are aimed at political supremacy of his party in winning elections and of course dumping money into Gujarat and for Jaitley to reduce budget deficit to please world bank and international credit rating agencies but definitely have little concern for the rights and privileges of common man on street and peasant in the fields.

Present day politicians (read Modi) talking about honesty, truth, morality etc is unbearable. They should confine to at best to talk about law adherence and law compliance. Nothing more.

Honesty is incompatible with amassing a large fortune - Mahatma Gandhi

Gandhi's seven deadly sins are: Wealth without work; Pleasure without conscience; 

Knowledge without character; Commerce without morality; Science without humanity; 

Politics without principles; Worship without sacrifice.

Bangladesh Liberation War 1971

• 3,000,000 people were  killed by Pakistan military, as per Bangladesh authorities. Pakistan Government put the figure as low as 26,000 civilian casualties. The number of dead in Bangladesh in 1971 was almost certainly well over a million. Independent researchers put the figure at 500,000.
• 400,000 Bangladeshi women were raped by the Pakistani Army in rape camps. After being assaulted and impregnated by Pakistani soldiers, the Bangladeshi women were completely ostracized by society. Many were killed by their husbands, committed suicide, or murdered their half-Pakistani babies themselves.
• 10 million Bengali refugees fled to neighbouring India.
• 30 million were internally displaced.
• Hindus of East Bengal-who constitute about 10 per cent of the 75 million population.
• 176,000 Bengali military men and police who mutinied on March 26 in a spectacular, though untimely and ill-starred bid, to create an independent Republic of Bangla Desh.

http://nharshakumar.blogspot.in/p/genocide-in-bangladesh-1971-account-by.html

Ethical corporate conduct flows from the top down

• Culture flows top down from macro to meso, and then from meso to micro.
• Similarly culture of a corporate unit will generally represent an adaptation to a particular environment of the institutional domain.
• The spotlight on corporate corruption is more intense than it has ever been. Whether the activity under investigation is bribery, falsifying financial statements, policy breaches or money laundering, the general public is much more vocal in their demands for accountability, and governments continue to tighten laws pertaining to white collar crime.
• The Occupy movement, student demonstrations and pipeline protests are making it clear companies face increased scrutiny on what companies are doing. In response, businesses must make sure they are conducting themselves ethically.
• The bigger risks for many companies are not so much deliberate actions as grey zones. Our society has been complacent towards conduct that may not have been perceived as illegal, but has certainly been pushing the envelope.
• A constant for all businesses is that corporate culture flows from the top down. If you have a culture of tolerance for this type of behaviour, employees, managers and even board members get accustomed to turning a blind eye and bending the rules.
• The growing concern over white collar crime is putting increasing pressure on businesses of all sizes to put stringent compliance programs in place.
• Officers and directors need to think about proactively reducing risks of white collar crime and taking swift and decisive action when issues arise. In that way, they can demonstrate to their employees and the outside world they have a strong culture of ethical conduct. This starts with a thorough review of their organizational policies and procedures.
• Assessment comes down to looking at four basics: detection, prevention, investigation and remediation. In other words, it involves understanding what the problem is, how big it is, how to fix it and, most importantly, how to keep it from happening again.
• A full-scale professional risk assessment is typically a one-time event, internal follow up is essential to ensuring that the organization’s processes are evolving and adapting to new risks that may arise.
• Smaller organizations may not necessarily need a risk-mitigation strategy. There are simple and cost effective things you can do to cut risk, such as developing a clearly communicated code of conduct that outlines ethical business practices all the way from board members to warehouse employees, or providing a whistle blower line for employees to report unethical practices.
• Experienced auditors can assess risk in terms of what kinds of payments are being made, the public officers involved and any history of fraud.
• Whether looking to internal or external activities. Every board of directors or audit committee should be asking themselves: Have we done everything possible to identify any irregularities or illegal transactions an employee may have committed.
• Engaging in an assessment is especially important for companies bidding on public contracts. Companies need to have a spotless reputation to be an official supplier to a government agency, so it pays to do your homework beforehand to identify weaknesses in controls.
• Taking stock of your corporate culture is a matter of competitive survival and credibility. In the past, corporations may have swept situations under the carpet. Now, tolerance has moved to zero because there is much more of a public spotlight on these things. Boards are finally coming around to the idea that they have to be cleaner than clean.

India Pakistan war 1971: Reminiscences

The 1971 war is considered to be modern India’s finest hour, in military terms. The clinical professionalism of the Indian army, navy and air force; a charismatic brass led by the legendary Sam Maneckshaw; and ceaseless international lobbying by the political leadership worked brilliantly to set up a famous victory. After two weeks of vicious land, air and sea battles, nearly 100,000 Pakistani soldiers surrendered before India's rampaging army, the largest such capitulation since General Paulus' surrender at Stalingrad in 1943. However, it could all have come unstuck without help from veto-wielding Moscow, with which New Delhi had the foresight to sign a security treaty in 1970.

During the second week of July, 1971, Kissinger arrived in Beijing, where he heard the words by then Chinese Prime Minister Zhou Enlai: “In our opinion, if India continues on its present course in disregard of world opinion, it will continue to go on recklessly. We, however, support the stand of Pakistan. This is known to the world. If they [the Indians] are bent on provoking such a situation, then we cannot sit idly by.’

Pakistani Aircraft destined to East Pakistan flew taking a round of India via Sri Lanka, since they could not fly over Indian sky. This forced Pakistan to get its aircrafts refueled on the way. Sri Lanka eager to help Pakistan, allowed Pakistani aircrafts for refueling at the Bandaranaike airport.

As India had decided to go on with the war, and Indira Gandhi had failed to gain American support and sympathy for the Bengalis who were being tortured in East Pakistan, she finally took a hard move and on August 9, signed a treaty of peace, friendship and cooperation with Soviet Union. In the perspective of Washington, the crisis ratcheted up a dangerous notch, India and the Soviet Union have signed a treaty of peace, friendship and cooperation. It was a shock to America as this was what they feared, expansion of Soviet influence in South Asia. They feared that involvement of Soviet Union could sabotage their plan.

Prime Minister Indira Gandhi decided to tour most of the Western capitals to prove Indian stand and gain support and sympathy for the Bengalis of East Pakistan. On November 4th and 5th she met Nixon in Washington. Nixon straight forwardly told her that a new war in the subcontinent was out of the question. The next day, Nixon and Kissinger assessed the situation. Kissinger told Nixon: ‘The Indians are bastards anyway. They are plotting a war.’ The pressure increased in East Pakistan, which attracted Indian attention. Indians were preparing for war and were concentrated on the Eastern front. To divert the pressure, on December 3, in the dark of night, even before India could attack East Pakistan, Pakistan opened western front and air raided six Indian Airfields in Kashmir and Punjab and thus began the war.

India was reeling under  the refugee influx and yet it dared not attack East Bengal, because then  the world opinion would call it the aggressor. An excuse was necessary and Pakistan had now conveniently provided it. The war on the East Bengal front was weighed in favour of India. Though to start with some hard knocks were taken, it was a smooth march - the whole population of East Bengal was against Pakistan.

Indira Gandhi in her meeting with Kissinger in New Delhi in July 1971 explaining deteriorating situation in East Pakistan and warned if the US Government and US President cannot control the situation military action by India is imminent.

On December 4, just one day after Pakistan raided Indian airfields in Kashmir and Punjab declaring war on India, America’s proxy involvement in the war was becoming clear. Thinking that the Soviet Union might enter the war if they come to know this, which could cause a lot of destruction to Pakistan and American equipment given to Pakistan, US ambassador to the United Nations George H W Bush [later 41st president of the United States and father of George Bush] introduced a resolution in the UN Security Council, calling for a cease-fire and the withdrawal of armed forces by India and Pakistan. Believing India can win the war and Indira Gandhi being determined to protect the interest of Bengalis, Soviet Union vetoed out the resolution, thus letting India fight for the cause. Nixon and Kissinger pressurized Soviets to a very extent but luck did not support them.

US sympathized with Pakistan, because of various reasons. Among them two reasons were that: firstly, Pakistan belonged to American led military Pact, CENTO and SEATO; secondly, US believed any victory of India will be considered as the expansion of Soviet influence in the parts gained by India with the victory, as it was believed to be a pro Soviet nation, even though they were non aligned.

In a telegram sent to US Secretary of State Will Roger, on March 28, 1971, the staff of the US consulate in Dhaka complained, ‘Our government has failed to denounce the suppression of democracy. Our government has failed to denounce atrocities. Our government has failed to take forceful measures to protect its citizens while at the same time bending over backwards to placate the West Pakistan dominated government… We, as professional public servants express our dissent with current policy and fervently hope that our true and lasting interests here can be defined and our policies redirected in order to salvage our nation’s position as a moral leader of the free world.’

Less well known is Russia’s power play that prevented a joint British-American attack on India. But a lesser known fact is the Russian hand in this, when USA and UK had threatened to invade India to relieve pressure off East Pakistan (Now Bangladesh).

The CIA reported to the US President that Indian Prime Minister believes that the Chinese will never intervene militarily in North India, and thus, any action from China would be a surprise for India and Indian military might collapse in tensed situation caused by fighting in three different fronts (East, North and West). Hearing this, on December 9, Nixon decided to send the aircraft carrier USS Enterprise into the Bay of Bengal to threaten India. The plan was to Surround India from all four sides and force them to retreat and leave East Pakistan.

USA had moved its nuclear powered aircraft Carrier "Enterprise" into Indian Ocean with the explicit purpose of blackmailing and pressurising India so as to prevent collapse of Pakistan Army. UK's aircraft carrier "Eagle" had also joined Enterprise. While the British ships in the Arabian Sea would target India’s western coast, the Americans would make a dash into the Bay of Bengal in the east where 100,000 Pakistani troops were caught between the advancing Indian troops  and the sea. To counter this two-pronged British-American threat, Russia dispatched a nuclear-armed flotilla from Vladivostok on December 13. Russia’s entry thwarted a scenario that could have led to multiple pincer movements against India.

Besides moral support and help from USA, China and UK, the Pakistani military was being bolstered by aircraft from Jordan, Iran, Turkey and France.

Read Nixon Kissinger conversations during the course of war.

In fact, the myth of Chinese activity was also communicated to Pakistan’s army to boost their moral, to keep their will to fight and hope alive. Lieutenant General A A K Niazi, the Pakistani army commander in Dhaka, was informed: “NEFA front has been activated by Chinese, although the Indians, for obvious reasons, have not announced it.” But Beijing never did.

The Seventh Fleet, which was then stationed in the Gulf of Tonkin, was led by the 75,000 ton nuclear powered aircraft carrier, the USS Enterprise. The world’s largest warship, it carried more than 70 fighters and bombers. The Seventh Fleet also included the guided missile cruiser USS King, guided missile destroyers USS Decatur, Parsons and Tartar Sam, and a large amphibious assault ship USS Tripoli.

Standing between the Indian cities and the American ships was the Indian Navy’s Eastern Fleet led by the 20,000-ton aircraft carrier, Vikrant, with barely 20 light fighter aircraft. The Indian Air Force, has just wiped out the Pakistani Air Force within the first week of the war, was reported to be on alert for any possible intervention by aircraft from the Enterprise.

However, India did not panic. It quietly sent Moscow a request to activate a secret provision of the Indo-Soviet security treaty, under  which Russia was bound to defend India in case of any external aggression.

Russian Chief Commander’s order was that their submarines should surface when the Americans appear. It was done to demonstrate to them that they had nuclear submarines in the Indian Ocean. So when Rusiians subs surfaced, Americans recognised them. In the way of the American Navy stood the Soviet cruisers, destroyers and atomic submarines equipped with anti-ship missiles. They encircled and trained their missiles at the Enterprise. They blocked them and did not allow them to close in on Karachi, Chittagong or Dhaka. At this point, the commander of the British carrier battle group communicated to the Seventh Fleet commander: “Sir, we are too late. There are the Russian atomic submarines here, and a big collection of battleships.” The British ships fled towards Madagascar while the larger US task force stopped before entering the Bay of Bengal. Ultimately, the Soviets formed a ring around US naval forces thereby not allowing  the fleet to get close to Bangladesh hence helping India in securing the liberation of Bangladesh.

Indian Prime Minister went ahead with her plan to liberate Bangladesh despite inputs that the Americans had kept three battalions of Marines on standby to deter India, and that the American aircraft carrier USS Enterprise had orders to target the Indian Army, which had broken through the Pakistani Army’s defences and was thundering down the highway to the gates of Lahore, West Pakistan’s second largest city. The bomber force aboard the Enterprise had the US President's authority to undertake bombing of the Indian Army's communications, if necessary.

Despite Kissinger’s goading and desperate Pakistani calls for help, the Chinese did nothing. Soviets had factored in the possibility of Chinese intervention. The Chinese know that the Soviet Union would act in the Sinkiang region, if the Chinese were to become directly involved in the conflict. Soviet air support may also be made available to India at that time.

To make matters still easier the Indian Air Force had no  opposition and bombed General Niazi’s official bungalow. The panic and the utter helplessness at being bombed from above by enemy planes, it was inevitable that Niazi  surrendered without much time.

On December 14, General A.A.K. Niazi, Pakistan's military commander in East Pakistan, told the American consul-general in Dhaka that he was willing to surrender. The message was relayed to Washington, but it took the US 19 hours to relay it to New Delhi. Files suggest senior Indian diplomats suspected the delay was because Washington was possibly contemplating military action against India.

The violation of human rights on a massive scale as “selective genocide”—and the complete disregard for democracy were irrelevant to Nixon and Kissinger. In fact, the non-democratic aspects of Pakistani dictator Yahya Khan’s behaviour seemed to be what impressed them the most. As evidence mounted of military atrocities in East Pakistan, Nixon and Kissinger remained unmoved.

Nixon and Kissinger phoned Soviet President Leonid Brezhnev and asked for guarantees that India would not attack West Pakistan. Nixon was ready to link the future summit in Moscow to Soviet behaviour on this issue. The Soviets could not see why the White House supported Pakistan, who they believed had started the war against India. Brezhnev, puzzled at first, was soon enraged. Several years later, Brezhnev still reacted angrily and spoke spitefully about American behaviour.

A new country named Bangladesh was formed, which was recognized by the whole world and by Pakistan in the following year with Shimla Agreement.

The 1971 war victory is a tribute to India’s amazing plurality. The entire war planning was conducted by Field Marshal Sam Maneckshaw (a Zoroastrian); the Eastern Army that liberated Bangladesh was headed by Chief of Staff of the Indian Army's Eastern Command Jacob-Farj-Rafael Jacob (a Jew); the head of ground forces in the east was General Jagjit Singh Aurora (a Sikh); the man who set alight Karachi for a week was Chief of Staff of the Indian Navy, Admiral H.M. Nanda (a Hindu); and the  entire team was given ample freedom for their military operations by a Hindu Prime Minister.

Pakistan and India had put those sad memories behind  

since the past should not control the future of both the countries.