Curbing Inflation Versus Promoting Growth

Curbing Inflation Versus Promoting Growth - A Macro Economic Dilemma

My notes in an attempt to make sense out what is happening between what RBI thinks and what Industry thinks...

I remember my Macro Economics Prof telling us that for an economist it is always difficult to make a choice between "Curbing Inflation" and "Promoting Growth". This can be seen in full colors in what is happening these days in the economic landscape of India.

In an ideal world, improving the output is always better and leads to inclusive growth, however in practical world this process is slow. We cannot improve the output of economy overnight. However, we should also not kill the means of increasing the output as well.

RBI/Govt is under huge criticism that their vision is only one sided. Their means of curbing inflation is by monetary policy of controlling interest rates. The idea is that if there is less money in market, the demand will fall and hence the inflation will fall. This would be a good move if the inflation is only demand pull; however the inflation which we see today is a complex combination of demand pull and cost pull. 

There are more chances that increasing the rates would lead to industrial growth slowing down (which is already beginning to happen). This in turn would hit the economy from two angles. 

1. The economy slows down, growth slows down, supply slows down. 
2. Demand slows down. 

This is a recursive phenomenon which ultimately leads the economy into recession, which will be based on what will fall more. 

The experts always say that if inflation exists, but output/economy is growing at good pace, then it is actually good for economy in long run. This is always a difficult, painful and a little extended path to start off with, but would lead to an inclusive growth.

However still, inflation has always been a sensitive issue for the government. The reason for this is more to do with Social/Political environment. None of the parties are willing to sacrifice the short term gains, which is the vote bank. None of the political parties are going ahead and educating the masses that we need to live with inflation for some time before good economic measures bear some fruits.

I do not have the knowledge and the numbers which the government economists and statisticians have.  The need of the hour is to look at those numbers and decide how much inflation can we withstand and then devise policies to grow the economy in parallel instead of taking a short cut route. The government and political parties need to give support to the economists to come out with policies which are right for the economy.

The Day I tried to become Anna

 This story goes back a year. With all the anti corruption euphoria in air, my wife asked me that why don’t I share my story.

An Year Ago

It was a casual chat with my friend that I came to know about a new notice from BBMP. The notice was requesting the flat owners to submit their property details in a register maintained by BBMP called as Register B. In turn owners could then file an application for a nominal amount to get an extract of it. This extract has now been glorified as Form-B Khata by the touts.

Day 1

The next day, I decided to pay a visit to the nearest BBMP office along with my necessary papers to know the process. I met with the official and asked him to tell me the process. To my surprise he asked me to pay Rs 5000/- and assured me that he will take care of everything and would give me the extract within a week. He also said that certain apartment people have paid more than that, indicating to me that he is doing a favor. I was taken aback!! Perhaps this was my first/second experience of a government official asking for a bribe without any shame. I was lost for words on how to respond and was feeling awkward of the entire situation. I also came to know that the government fee of filing the details was NIL and getting the extract was about Rs 150/-. I came back disheartened and in an ethical dilemma. Then, I thought why I don’t discuss this with my other half, as they always have a different perspective to things.  

I explained the whole episode to her and also about the inner voice which is withholding me to not pay the bribe. However I also told that if I do not give the bribe, perhaps I would never get the extract. Then she said the golden words “Have courage and do what is right”. Listening to this, somewhere in my heart, a resolve was beginning to take some shape.

Day 2

Breakfast time and I was gulping down my breakfast and still pondering on my move. Before leaving to office, she asked me about what am I going to do. I said, I do not know and probably would do something extempore in front of the officer.

So here I was standing in front of the official with all my papers in hand and giving him the reference of our discussion of previous day. He again reiterated about the money. Backed up with my wife’s supporting words, feeling of guilt and an inner resolve, I told him “Sir, I do not want to pay any money apart from the official fee. I do not care how much time it will take. Please give me the application form and I want to file it myself”. I still do not know how I said that, but I do remember the satisfaction that I had and also the expression on the face of the official. A minute passed by, which involved both looking at each other. He asked me to wait for some time. I waited for half an hour after which he asked me to give a written application along with the necessary documents. I submitted all the documents, fully knowing that no processing is going to happen.

A month passes by

About a month or so later, one fine day I got a call on my mobile from the same officer. He told me that the extract was ready and I could come and collect it from his office. I was surprised and at the same time thinking what to expect next. I went to BBMP office and met the official. He handed me the extract and again demanded money. I was shocked!! How could a person fall so low that despite being refused money he still asks for it unashamedly? He argued, telling me that he in-turn would have to give money from top to bottom to the people who signed on that. Building on my new found confidence, I refused him again and told him that I would pay only the government fee. Murmuring something he handed over the extract to me.

First move

I tried repeated this resolve again, when I got my driving license transferred. In this whole exercise, I realize that the first move is always difficult to take. But if you have the right people surrounding you, the courage comes from within. The path to ethics is always difficult but not impossible. I also know that I cannot become Anna overnight, but I could perhaps initiate the process by taking these small steps and try to do what is right.

Need of the hour: Portable Windmill

I had always wondered: Why doesn't somebody Innovate a portable wind mill, which I can install in my terrace? 


After all wind  is one of the cleanest energy resources to tap and use!!

I live in a part of the City, which I feel has abundant amount of wind flowing to run the wind mill throughout the day and night at top speed. 

Windmills generally available have a huge wing span and hence require space for installation. Apartments and small houses need permission from neighbors and authorities, in order to install it. Cost is another inhibiting factor. Due to all of these reasons, the current crop of windmills are not suitable for residential units.

I wish, if windmill manufacturing companies, could innovate/create a small portable windmill, whose size should be not more than the DTH antenna which we use and weight not more that 1 KG. This should generate and store power of at least 100W daily. With the pricing just right, this would make a killing proposition in retails segment.

I do not find such a product generally available right now!!

Water!! Collaboration OR policing. What will help to conserve it?

I already knew it. It is going to come. Maybe if I will not see it in my life, my next generation will see it and will curse the previous generations that they did not do anything to improve the situation.

But the moment I read a couple of articles at below links, I knew something has to be done pretty fast:

https://www.mckinseyquarterly.com/Public_Sector/Economic_Policy/Next_generation_water_policy_for_businesses_and_government_2481?gp=1

https://www.mckinseyquarterly.com/Energy_Resources_Materials/Environment/Water_as_a_scarce_resource_An_interview_with_Nestles_chairman_2482?gp=1

I still remember some gentleman saying to me “Anything which is in abundance is considered free”

Delegates and negotiators (a strange term given to people considering that this summit was meant to improve the future with collective effort) representing almost 200 nations sat down for 12 days at Copenhagen. The final outcome was not what was expected out of the summit. The whole summit was clouded by MY instead of OUR.

Out of all the environment issue the one which stands out for me at the moment is WATER. This is something which is essential for any living creature (part of pancha-tatva in Hindu mythology). This is something which, if we start now can be saved and will serve as a lifeline for millions in years to come.

Thought process!!

Then, I thought what can I do as an individual?

We see, lots of information coming in newspapers, government notice, NGO’s. They tell what we need to do to conserve water and how? These are good, but what we need now is innovative ways in which this can be done. Ways in which the whole society empathizes with the need and participates in the cause.

My thoughts will now concentrate on how an individual can think about water and think about ways this can be contained in the process.

I as an individual have seen water being wasted in following ways:

·         Washing Clothes– Most of the washing machines existing today take too much of water. The ones which exist who claim to use less water are damn expensive

·         Washing vehicles – Washing vehicles with tap water? There goes the precious water. If washing directly through pipe, no end to the wastage. Can’t we use recycled water?

·         Bathing – We enjoy a nice hot shower for hours, or enjoy soaking in a bath tub. What about the water used? Can’t we bathe with a single bucket of water? Can’t we use recycled water from the previous bath?

·         Sewages – Sewage treatment plants can recycle our shit into something which is precious and which can be used for washing vehicles, gardening, or funneled back to flushing pipes.

·         Gardening – Fresh water from tap is used for gardening. Can’t we reuse recycled water?

·         Irrigation – Gallons of water is still used in the same old fashion of irrigation. Same old canals are used to bring water to the field, who in the process leak precious water to the ground before it reaches the field. Can’t we have better canals and use drip irrigation?

·         Rain water – Most of the water just go down the drain instead of recharging ground water.

·         Bore wells – Due to non existing network of water supply by civic authorities, people mostly depend on groundwater. Rampant digging of bore wells is depleting the ground water. We have witnessed areas where pumps have gone dry as water level has gone below.

These are some of the areas which just come to everybody’s mind. For a lot of questions, we as an individual can easily start contributing.

However, out of the above there some areas where we need assistance from government and society. Some of these areas are irrigation, sewage water treatment, rain water harvesting, and reducing bore wells. Why need assistance, simply because these are monetary intensive areas.

Ideating!!

Consider a real life situation. We are having sewage treatment plant. We were happy, till one fine day we realized that we need a pollution control certificate for a nominal fee. We were still okay, but then realized that to get that certificate we need to pay a bribe. There is no way out. If you don’t pay, they will certainly find out some shortcoming due to which you will have to pay a hefty fine. Now we very well know none of the environment related work done by current builders is of top class quality and is bound to have gaps.

This is one example of government’s way of implementation of environment measures “Enforcement by pressure”. This is not going to work, what we need is “Enforcement by participation”.

One innovative way this can be done is by a PPP model, which can be participation between a private/NGO/government and individuals. Consider below business model:

“An innovative /private company approaches an apartment association and strikes a deal. As per the deal the authority will install treatment plant, install rain water harvesting and maintain these plants. The water treated and purified can be used by the association. The association will pay for the maintenance charges and the received purified water as per pay-as-you use plan. It will be mandatory for the association to use this water for gardening, washing vehicles and if possible in flushes. The water that still remains can be funneled back to the company’s central collection area. This water can be either sold for reusable purpose or can be used to recharge ground water”.

This simple mechanism can remove enormous complexities, remove middle men and will invoke a sense of participation in people.

Road Ahead!!

The need of an hour is a collective thinking and coming up with innovative ideas which create a climate of collaboration. History has shown that work is fun when enjoyed, not forced.

For water, what we need is zero wastage policy, similar to what we have in space stations.

I already see a lot of interest getting generated in individual for this and will see positive outcomes in near future. After all we need to be positive.

Acknowledgements!!

www for the picture of drop.

Wish Mobiles have common architecture

Wish I had a mobile handset in which I could put any OS, be it Android, Symbian, Linux, Maemo etc. 

One thing good about PC's and laptops is that most of them follow common/standard hardware architecture (leaving some guys like Apple) and instruction set. This means that OS vendors can tailor their OS for those architectures and also make a clean distinction between OS manufacturer and hardware manufacturer.

Flexibility like this does not exist in the field of mobiles. If I have a Nokia handset running Symbian, there is no chance that I can burn Android or Windows OS on it. Lot of handset manufacturers have proprietary OS build for the handsets.

It is still not difficult to have an open source team to do porting on various mobile platforms. But I feel why it has not picked up is somewhat due to the monopoly and competition that handset manufacturers want to build up.

If not now, then in near future, I do see this happening. Handset manufacturers will have to open up. Platform will get standardized. OS manufacturers will do the porting of their OS for standard platforms. You will be able to change the OS of your choice on your handset. Virtualization will come in mobile phones as well. I see some good news coming in from vmware anyway which is working on bring virtualization on mobile phones.

Possibility of putting any OS on mobile opens up immense opportunities for handset manufacturers:

• It will accelerate time to market, which also means that they can concentrate more on hardware and physical, aspects. This will in turn means that they will be able to bring out stuff faster from there research tables
• They can easily migrate to rich OS

The OS/Software vendors will also benefit from this as:

• They will concentrate more on the software/OS
• They will be able to reach more varied hardware platforms and increase their reach 

Let's see when this wish comes true.

Healthcare Trends - Smart Textiles

Can you imagine that tomorrow the clothes that you wear will assist you in saving your life? Welcome to the next century. Your clothes will measure your heartbeat and other vital signs, which would be crucial to understand the current state of health.

The beauty is that the whole thing is non-invasive. You do not need to do anything more, than to just wear it. No need to visit a clinic to monitor the health.

Lot of companies (for example Textronics) and research institutes are working on this new technology. Refer to below link for more exciting information:


http://bit.ly/d0G0o


http://www.youtube.com/watch?v=bHLtZvbhn2Q&feature=fvw