Sunday, March 18, 2007 

Who is paying for your food?

We always have these fancy arguments about why we would not want to pay taxes or to be politically right why we would want to manage our taxes properly. We would rather blame the government institutions for it, Neither do we get social security nor great infrastructure, the entire system is corrupt, there is no point paying taxes as it does not reach the right destination.

We always want to argue "Why should I pay taxes when most of the country does not pay taxes?"Rest of the country evades taxes and whats wrong if we only manage them?. I don't get facilities like what the citizens of US or any westerner cherishes. A fair argument, isn't it? We always compare the developed countries for everything else?.

Lets for a change take the example of the developed world in terms of what they do to their agriculture sector. In the US, during the year 2003, agriculture exports continued to be sold well below the 1970 and 2000, EU share in agricultural exports increased from 28.1 per cent to 42.7 per cent. France increased its share from 5.7 per cent to 8.1 per cent, Germany from 2.6 per cent to 5.9 per cent and United Kingdom from 2.7 per cent to 4.1 per cent

The world is expected to behave like an ostrich when it comes to the WTO violations from the world's only super cop. Whether it is the additional federal support of US $180 billion for the next 10 years that has been promised for American farmers, or the grant of US $110 million for export promotion that has recently been announced, the WTO seems helpless. There are 6 million farmers in the US compared to 600 million in India.

The total quantum of farm subsidies given by the developed countries works out to 340 billion US dollars a year or almost a billion dollars a day.

Impromptu, you might want to say this, Even the Indian government gives subsidies to the farmers, they get free electricity, free seeds, and fertilizer subsidy and sometimes they even get a waiver on all the loans. Very true, but did you know this, in effect the farmers have to incur a negative subsidy(Measured by Aggregate Measure of Support), i.e the farmers have to forgo thier income. If only the government procured their farm products at the prevailing global prices or marginally increase the minimum adminstered price for the commodities, their lives would be better.

Now, who is enjoying food at lower prices? of course, you and me who have our food subsided by the farmers. Next time, while we eat, lets remember the 600 million farmers out there who are subsidizing our food.

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9:46 pm | |

Monday, March 12, 2007 

Undisclosed

It’s very hard to consume a secret whose undisclosed recipe is only in your head. You cannot actually cook it because the dish was precisely meant for somebody else to taste. It’s even more fun when you have to digest the fact that you just can’t reveal the dish to the person. How’s that for “Catch 22”?

We all do things in life; sometimes they don’t have a plausible reason. Sometimes we think and do things which can’t find the courage to reach out to the eardrum? Some saner said “A picture is worth thousand words”. Keats said “Heard melodies are sweeter but those unheard are sweeter”.

Does anybody have something to say about “the silent secret which has tobe heard”.

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9:50 am | |

Thursday, March 08, 2007 

1 + 1 = 2?

You might laugh after reading what ensues, Bertrand Russell proved that 1+1=2 in one of his work which he did with Alfred and it was published in the book Principia Mathematica. Something, which is the foundation of modern mathematics had to be proved .What we take for granted and pretty kids stuff had to be proved to move forward . What if 1+1 was 2.00001 (You might not know, may be it is), it might completely change everything we know about the world around us, indeed it's how all Investment banks mint money, defying number laws in mergers and acquisitions.

Yesterday, I was watching this strange program in National Geography as to whether The Da-Vinci Code was real? If I am right, I remember the same channel telecasting a program, about how Da-Vinci Code could be true, the timeline was when Dan-Brown hit the market with the concept that Jesus Christ was married to Mary Magdalene and their bloodline is still out there.

Everybody kind of gives their own interpretation as why something would be right or wrong and nobody is sure about anything. I would give a damn if it was true or not, because it does not affect my ability to appreciate the principles propagated by Christ irrespective of whether he was a virgin or not. It would make more sense to inculcate something good out of what was told by Christ rather than proving whether he was a virgin or not.

I think, it's rather the psyche of the human mind to understand, substantiate and interpret that drives the fury to prove something. You might have heard this often "It's a kind of intuition and there is no specific logic to what I think". Intuition is often defined as the act or faculty of knowing or sensing without the use of rational process. I might want to dispute this; in fact it is the highest form of knowing.


A person does not automatically learn to balance the bi-cycle, the first time he learns to drive. He does not consciously balance when he becomes a matured driver, this does not mean that the process of rationality is lost, it's so imbibed and quick, we are not cognizant of the underlying rationality.


The more we try to prove something we come across facts that there is a probability to be untrue. The more we are ignorant of the proof, the more is the tendency to entertain uncertainty. The more we accept the proof with constraints, there is limitation to the boundaries created by concept itself. The greater the limitation, there is always the better one which overwhelms it soon or later.

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8:01 am | |

Saturday, March 03, 2007 

Its income disparity again

The previous two posts have kindled me and I have more queries and answers for myself. I had a interesting comment by Deepak who had completely agreed that the growth/income distribution was definitely lopsided but suggested that the benefits of this have however started to trickle down albeit slowly. He had remarked that we should not forget that the so called higher income people who are earning higher income for the nation as a whole and contributing their best possible. I would certainly accept it, I can see it everywhere, the construction industry, hospitality industry, the security guards so on and so forth.

The IT/ITES sector currently contributes about 3.6% to the GDP and currently employs about 2 million people (India's population is 1100 mn).The recent CRISIL Survey done on behalf Nasscom suggests that for every job created in the sector, four are created in the rest of the economy. Several of these jobs are created among the less educated workforce. It effectively translates to about 8 million jobs created by IT. It is a good picture isn’t? It has done what it could do best.

Let me plug in some figures which shows the growth rate of various sector of the economy



I tried to crunch the growth rates of different sectors. The growth rates from the period 1990-2007 are 2.85%, 6.71% and 8.41 % for agriculture, industry and services respectively.
We are becoming a services driven economy and it shows up in the following table which paints the contribution of different sectors to the economy


The following observation tells the story, about 60% of the people have grown at 2.85% and about 20% of the people have grown at 8.50%.

This is not the end of the story; real growth of the income is much skewed. The Consumer Price Index (CPI) has increased by about 7.93% for agricultural labors and has increased by about 7.5% for industrial workers for the period 1990-2006.

The essentially means that 600mn people have de-grown by 5% and about 200mn people have grown by 1% in effective. Let me probe a little more, about 2mn (0.18%) people contribute to 3.6% of the GDP and the per capita contribution is too much. (That’s why I shout that these people have too much of money compared to rest of the population).When the per capita income is high they have enough money to spike the demand and contribute the best to the inflation.

I have no two views that we should grow as an economy but we can leave about 60% of the people behind us. All I want is the means to improve the life of rest of India.

The FM did something of the aam aadmi stuff this time and you know what Pranab Roy said during an interview with the FM, he freaked out saying that the markets would go down if this was the reformist attitude FM had to paint to the corporate world. Mr. Pranab “Why don’t you understand that the investors are a bunch of 50mn people whereas there are also other people in India as well”.

I certainly believe that Capitalism is the way out to bring about economic prosperity to the society. I don’t believe in skewed capitalism and it is the duty of the government to take everybody together.

I don’t want a future where we would have reservations for the farmers and downtrodden for the mistakes we commit now!!!

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5:21 am | |

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