Demonetization - Connecting the dots - Raghu Ram Rajan' Exit

There was pressure on R3 to reduce interest rate, to boost Growth, subtext being UP elections. It was widely commented then.

Similarly demonetization was discussed with him, in March 2016, as stated by the big-guns of Modi Government.

 But R3 was negative on both counts : "My name is Raghuram Rajan, and I do what I do"

Such independence of thought and action did not go well with the powers that be.  

PM' attack dogs were sent out - with absurd allegations - too absurd to deserve a response.

But R3 was hounded out : the attack dogs were rewarded.

Demonetization, 10 months in the works is and announced on 8th Nov 16, is turning out to be unmitigated disaster for mango men, while the ostensible targets are fine.

But Amit Shah will go into UP and Punjab elections with some advantage. 

Modi ji was doing many good things for the economy. Personally appreciated the Manager in him. 

He has blundered now, and we are in danger of losing him. 

Trump Win

All is well with the World 

Pandits and economists have been worrying about the widening gaps between the rich and the poor : the Gini Coefficient has been signaling the build-up of stress in many countries. A disruption was waiting to happen.

And it did on 9/11 with a bang. 

Donald J Trump, a rank outsider is elected the 45th President of the United States of America, the most prosperous country of this world.  

It is a tribute to our times that Trump very graciously spoke " She congratulated us — it’s about us — on our victory, and I congratulated her and her family on a very, very hard-fought campaign." 

And Hillary Clinton spoke thus " Last night I congratulated Donald Trump, and offered to work with him on behalf of our country. I hope that he will be a successful president for all Americans." 

Hillary wore purple to make a not so subtle call for unity, which echoes sentiments from her speech. "We have seen that our nation is more deeply divided than we thought," she said, "But I still believe in America, and I always will."

Barak Obama the inspirational 44th President of United States, who opposed Trump spoke thus "We are now all rooting for his success in uniting and leading the country,” 

All is well with the world. 

We in India experienced the same disruption in May 2014. The Experience has been good so far,in many ways.  

I am sure our Indian politicians will also catch up and we will see similar quality and grace in public life. 

And soon. 

Prohibition and Other Vices

Prohibition in Bihar 
Addiction to Liquor is a tragedy but criminalizing its use converts that tragedy into disaster, both for users and society. (paraphrased - Milton Friedman)

Sh Nitish Kumar has made these women very happy by enforcing Prohibition.  Patna High Court has struck down the law, being unconstitutional.  

We must remember that Liquor Prohibition leads to rise of organised crime, spurious liquor and smuggling. And a disaster is waiting to happen. 
One does not wish but many deaths are waiting to happen. Like this one :  

In principle, Prohibitions and bans don't work in a democracy, more so in a loosely administered, raucous one like ours.

The Govt must aim to create decent environment and culture around drinking and "Madhushala" such that the excesses that upset the women are avoided. And the revenue from the Liquor Industry is gainfully utilized for the sorely needed Development Works in the state. 

A way forward :

1)  Allow IMFL shops and bars in Hotels and Restaurants

a) aids tourism, one of the best employment generation industry.

b) The Bihar may put additional levy ensuring 10% higher prices than neighboring states.

c) Set standards and allow anyone who wants to open a bar.

2) Allow locally brewed liquor in licensed shops only :

a) Such liquor shops must have decent hygienic friendly environment for socializing, with eats

b) Socializing and eating together reduces the excesses and guilt associated with drinking liquors.

c) The Local women's groups be involved with the staff of local de-addition centers to moderate the drinking

3) Ensure certification of local liquors - at the brewery level.  

4) Use such revenue to establish certification centers in each district /Tehsil. (Again quality jobs for the young)

5) The Police may be provided with physical resources : vehicles, breathalyzers etc

6) Fund local level meetings of women and shop owners, certification centre employees and "Nashabandi Police" (adds jobs ) Now that GST is being implemented Excise officials dealing with Liquor may be re-trained.

This liquor ecosystem can create 100,000 jobs in tourism, police, certification and regulation.

    And make available a surplus of Rs 4000 Cr+ for the state