Government’s Goldberg

It’s surprising how most of my writing happens on Wednesdays; maybe I need to consult an astrologer to find out why. OK so today’s big news in the paper this morning was the Gold Monetization scheme. Gold Monetization is where Gold will be treated like Cash. 

This scheme was announced by the Finance Minister Arun Jaitley in this year’s Budget. The scheme is a two pronged answer to the Indian obsession with Gold.

1.       The scheme shall allow public to deposit gold in scheduled banks and earn interest on their gold.

2.       The scheme allows Banks to use the gold received in this scheme to meet the CRR and SLR requirements.

So what does this mean?

Simply put, you and I can deposit our gold in the bank and earn an interest after a fixed maturity period. How does this happen? Well it works just like cash, the Bank will measure, test and tag your gold, and then lend it to jewelers or other investors who may be willing to buy or borrow at a rate higher than the banks offer to pay you. The interest earned in this scheme is not taxable under income tax or tax from capital gains. Please note that interest will be calculated in terms of gold. That is, if you deposit 50g of gold, 10% would be 5g of gold.   

This brings us to some simple but genuine questions

1.       How will they pay interest? Will they add another gram to my bangle? 

Well, no… Your gold will be treated just like cash. Meaning, you will not get to see the same gold bangle at maturity. If your bangle was 50g, then you will get 50g back + interest, but not in the same bangle. You may get the maturity amount as bullions of gold or you also have an option of redeeming it in cash. However there’s a catch, you need to specify if you want gold or cash while signing up for the scheme.

I’ll say what you’re thinking now… Nope, not gonna happen! My mom would never lose her bangles for 5% or 10% or even 30% if she’s never going to get a chance to see the bangles again. 

So why make this scheme? Politicians and bearcats are probably smarter than us, they would obviously be aware of our attachment to personal jewels, why would they draft such a thing??

Well the answer is simple. The general public is not the target of this scheme. This is for investors who already have gold in their portfolio. Gold itself would grow its worth in time, imagine depositing it in banks and earning interest on it, that’s a double income on a single asset! 

All this is fine and obvious. What are we missing? Well, tipping the rich to invest more is not the only goal here, the second leg,(which is actually the first) is that Banks would be able to allocate this gold to meet CRR and SLR requirements. Banks, need to place certain percentage of their deposits with the RBI, currently the CRR and SLR together constitute 21.5% of the deposits.  Meaning, if a bank has 100B of deposits it needs to deposit 21.5B with the RBI. The remaining 78.5B can be used for their business that is; giving loans. So, now that gold has come into the picture, Banks may keep gold in the RBI and use more cash to give away more loans and hence increasing growth in the country. 

So to summarize, what’s this scheme about? 

1.       Make big investors earn two times on a single asset.

2.       Allow banks to use the gold to meet their duties and save cash to give more loans. 

 

Will this reduce gold imports?

No

Will this make any difference to household gold?

No

Will this mean anything to small investors?

No

Do we need this scheme?

I don’t know.

As it Turnsout

I always have an opinion about votes, but I almost always shy away from debates on voting. It’s frankly because till date I haven’t had an opportunity to vote.  (I’ve seem almost 6 to 8 elections pass by btw) You can simply say I’m lazy, I don’t care about electing, or I still don’t feel empowered enough to actually believe that my vote can make a difference. 

The General Elections of India are probably one of the biggest democratic exercises on the face of earth, and with it comes a lot of drama, games, schemes, garlands, and well... some shoes too. The problem in the Indian electoral system since the earliest times has been the voter turnout. People don’t see it to be worth the effort.   The average voter turnout in the General Elections is around 60% meaning less than two thirds of the people were responsible for deciding whom to elect and assuming two thirds voted for the party(ies) forming the government, only about 40% of the total (voting) population of India chose the ruling party. So about 60% were in no way responsible for the central government! But I’m sure they had their share of complaining on how dysfunctional the government is. (Me included)

Ok here’s little info,

Voter turnout can actually say a lot, they are generally used to send political messages too. The 72% voter turnout in the Assembly election of Arunachal Pradesh in 2009 was hailed by the media and a few voices in India as a message against the Chinese aggressive pursuit of annexing Arunachal Pradesh. Similarly this time around (2014) certain groups... well ok terrorists (I was just trying do a Reuters and not use the word terrorist :D ) put up signs and distributed flyers telling people not to vote, in an attempt to show that Kashmiris don’t feel like voting or participating in the democratic system of India. 

www.mirror.co.uk

Now lemme tell you why I haven’t had a chance to vote yet. When I turned 18 I was sure I could cast my vote in the coming election, I was born in the beginning of the year and by the time the next election came in 2008 I was eager and well, had not yet figured anything in politics but wanted to vote, I was eager and was taken by the ‘right to vote’ thing. But my name was not in the list, disappointment. The next election was in 2009, I tried to register myself, the clerk at the official looking koisk asked me to fill form and took 2 or 3 photos, loksabha election 2009 – ‘sorry your name is absent in the list’, ok. 2010 – Municipal election, the guys came home (supposedly) and we weren’t at home; result – no vote. It’s been so through till now.  In the initial days I wanted a voter ID so that I can have an address proof, (then I got my passport, so lost interest all the more) Oh I forgot, last time I registered online, after everything is done, they want us to take a print of the sheet and goto the election commission office of our district, I got the print, but sadly never found time to do the submitting part. OK enough about me.

Speaking of Democracy itself, I feel it doesn’t work too well with India. I mean, in a country like India, the biggest and most diverse democracy of the world, we need to tailor the idea of democracy. What we currently have is a crude form of democracy that involves participation of everyone at once. How can you actually expect one hundred crore people to actually come out and vote? In fact if the 100 crore came out to vote, I’m not sure we have enough logistics to support that kind of a turn out. What I’m trying to say is this idea of total participative democracy is actually a failure. It doesn’t work. We cant have everyone voting at once... because ‘everyone’ is NOT everyone. Maybe we need stages, maybe increase the levels, cut the power, maybe increase hierarchy... who knows that might have its own problems, but my point is, low voter turnout will remain a problem in this crude form of total participation. Thats it!

Btw facebook pics, all the ‘be responsible’ ads and everything is making voting a glamorous thing, which is good.. might just get the urbans to vote.. but hey.. I still haven’t voted.. not even fashion can me vote.. I wonder how anyone would vote.

AAP Bhi Aadmi Ho

Arvind Kejriwal was sworn in as the 7^th Chief Minister of Delhi about 15 days ago. It was a big day in the politics and democracy of India. I wasn’t really happy about the Aam Aadmi Party taking Congress support to form the government in Delhi. The day when the news broke that AAP will form the government in Delhi  with Congress aid, I made a sad facebook post. Here’s the pic:

Yeah, call me a sadist, and heres a comment by one of my high school teachers

And another friend of mine said:

Ofcouse I only had this to say:

And then the status died away.. and 5 days later Arvind Kejriwal was sworn in as the CM and he made quite a decent speech that day. 

I made a status:

I realized that I was missing something and this congress alliance may not prove that damaging and AAP would still be able to play a dominating role and provide the people of Delhi some good governance.

The days that followed saw a lot of changes and decisions like the transfer of DJB higher management, 700 liters of free water per day and maybe a few more that I don’t remember. But all the while and media, other political parties and sympathizers and supporters of the NaMo Movement started posting pictures, excerpts and quotes of how Kejriwal and the AAP were switching sides, changing tunes etc etc.. the 3 biggest things that the people have found hardest to forget and forgive are:

1.       Kejriwal won’t fight an election – He contested and became CM

2.       Kejriwal won’t take VIP security or government facilities (car, house etc) – Well he did that

And the worst

3.       Kejriwal swore on his children that there would be no support taken from BJP or Congress – Well, we all know what happened.

Now, ofcourse I’m writing this post to well somewhat justify his statements, now these three have not risen from different sources. The one reason is, he’s green, that’s it.

Being a.. well talkative person I know that sometimes you go overboard, get carried away and say something of paramount proportion when you don’t know the complete picture. Haven’t we all seen people who are ‘confidently wrong’? That’s what happened here, it’s practically impossible to have a CM walking the streets without security. I’m not talking about the CM, the people would swarm the place and hurt one another.. its so with any celebrity and he or any celebrity has no control over it.. so this was an innocent ‘confidently wrong’ statement. How can he say something and we take his word for something that isn’t in his control?

Speaking of the swearing on children part, the same goes here, he was ‘confidently wrong’ because of his innocence, as I said, he’s still a little green, now what do we do of an innocent first timer? Do we show some consideration or we scrutinize and criticize his every move? Expect him to be perfect from day 1? That’s just too much expectation from us, the media and other politicians. Given time, maybe he’ll learn his limitations and learn that every word is counted.

To be a little neutral here, I really am concerned about the ‘370 pages of evidence against Shiela Dixit’ statement. Ofcouse, thinking realistically, there’s no such thing as ‘unconditional’ support. Lets leave it as that.

Finally, why did he enter politics, contest and become CM? well, We must think of why AAP was formed in the first place, there was no option left, right? No Lok Pal Bill would be passed with all the Anshans and people were simple getting bored and eventually fizz out. 

This was a right decision, but sadly, we have a perception that nothing can be changed or that people who get down in the pit to clean also end up smelling like shit.. or people have no hopes of ever having a clean political system. Maybe.. but the one line I remember from The Shawshank Redumption is “No one can ever take away hope” So I’m gonna hope, hope that change is possible, change will happen and I will do my part. (by making blogs and fb posts? Sure why not)

A Crowd In Hand

The last time I experienced Delhi winter I thought it was overrated and the 16 of Bangalore was colder than the 4 of Delhi. I accounted this to the wind speed and altitude difference. This time however the winter already seems cold. Maybe because I’ve been living in Delhi for a little over 4 months and pretty much accustomed to the windless oven. Now I see people leaving for home earlier, shops shutting down earlier, the sun shying away faster and a dead silence descending over the night.

  It was the silence of the cold Friday night. I heard a railway horn blow at a distance. The line was about 1200 – 1500 meters away and would’ve been inaudible if it were not winter. It was in this silence that kept me awake. I finally decided to watch the movie Lucia.

 

I think it was August 2013, when I suddenly started seeing all these posts from on FB about how awesome Lucia is and surprisingly, I BMS-ed  it and what do you know! A PVR in one of the malls of Gurgoan was actually showing Lucia. I didn’t have a lot of company to go watch it, I had found zero Kannadigas and my friends of Delhi weren’t really interested. This wouldn’t have happened if you’re in Bangalore. I’ve been dragged and I’ve dragged my friends to movies of the languages we didn’t follow, but it was fun and it happens often in Bangalore.  

Anyway this post isn’t about language. It’s about the concept of crowd funding. The introduction credits of Lucia movie said that it’s the first CrowdFunded Kannada movie. I googled a little later and found a news result dated Nov 12, 2013. It said the first Crowd Funded Malayalam movie with a Tamil/Malayalam cast and a Bengali Director would release soon, cool so Kannada is ahead (yay :P) More googling lead to a Reuterspost about the movie. It says the story writer had made a blog post where he said that he had tried to source the movie but had failed for 3 years. Suddenly out of the blue he got 200,000 rupees into his bank account from a lady in UK. More funding from random strangers followed and that’s when they decided to make a movie out of funds from the crowd. 

This idea is ingenious! Kannada film industry of the ‘Sandalwood’ is known for its low budget or its Tamil/Telugu adaptations; Lucia was so big and radical that people said it brought a paradigm shift. Though it was still a low budget movie, it was very well received. The plot of the movie itself is so delicate and complex. The actors did good and the songs were pretty good too. The movie all in all was good, it was also released in Pakistan; the Tribune even put a review of Lucia. Sadly I still don’t think I would find people who would want to try the movie. (it was released with subtitles ofcourse)

Last year I had authored a white paper dealing crowdsourcing for software testing and since then I had started to appreciate the benefits of using a crowd. I read a bit more about crowd funding and the more I read the more I was interested, this idea is already catching up, crowd funded movies were already famous in the west. The next result said Crowd Funded travelling; a site called Trevolta said it would sponsor trips! The idea is simple; travelers post their travel plans and the company tries to sponsor it, the sponsors may be from simply inspired and passionate travelers or marketers sponsoring for marketing use. Whatever the case, you get to go on a trip free of cost! Why wouldn’t it work?? The idea is relatively new and the site has very less right now, but you can check out their FB page just in case (I know free publicity right? They better fund one of my trips :P :D )

I was thinking hard about how to make use of this idea, maybe I could use CrowdFunding to raise capital for my entrepreneurial ideas too… and that’s when it hit me that this is what we do in India! A Ganesh mela or a Durga Puja pandal or holika dahan all happen with crowdfunding! We call it chanda and now we’re giving it a fancy name, come to think of it, it doesn’t seem so radical or big or new idea at all! And today, we have so much money; Banks, Investors and VC’s and ready to give you all the money if you have an idea, and if not these guys then you can just get money from the crowd! What we need is planning, transparency and proper IT integration and we could use CrowdFunding for anything! So... Go!