Monday, December 20, 2010

The corruption termite bites India big time

The corruption termite has bit and continues to bite India big time. This time it is the largest in money post independence - $40 billion. Unfortunately, it is Congress again at the Center of the controversy. In 1980's corruption in Bofors case made Congress lose power. In 1996, P,V. Narasimha Rao corruption cases made Congress lose power. Now, Manmohan Singh stands to lose power. However, a weak BJP is no threat to Congress. As long as journalists like  Sheela Bhatt, Vir Sanghvi - all these continue to idolize Congress and claim that is the only party of governance, Congress will be the darling. It is not as if BJP is clean as it claims.  The hope Manmohan Singh being the PM which so far lit up the heart of an Indian is today shut off. I am amazed at how Dr. Singh could not act and allowed his government to run like that of Narasimha Rao govt.

First, it was the CWG games scam, then came housing scam - how many more to go - Mr. Singh.? The real India has 2 sides. On one hand, it is growing like never before with 9% growth and all the world turned towards us, and on the other hand the corruption continues to grow and swell too.

The intention of writing this article is to give readers a chance to understand how Manmohan Singh allowed the biggest corruption to take place under him and he did not act at all. His deafening silence is admission of his guilt. PM is not corrupt, but by not acting against the corrupt (despite 3 times notice served to A. Raja), he admits his guilt. Let us study how all it happened in simple terms.

First, prior to A. Raja becoming the Telecom Minister, the policy of First come first serve basis (FCFS) was followed to allot new entrants who wanted to provide cell phone service. Basically, according to FCFS policy, the date of application by the new entrant was the criteria in processing the application. Based on the dates, all the entrants/bidders were auctioned as per the prevailing market price of the spectrum. 

However, page 66 of the Comptroller and Auditor General (CAG) report shows how Raja changed the system of FCFS without the approval of The Cabinet, Telecom Regulatroy Authority of India (TRAI), Finance Ministry  and Empowered Group of Ministers headed by Pranab Mukherjee. He used the criteria of agreement to Letter of Intent (LoI) as the criteria instead of the application date. The letter of Intent (LoI) is the letter given by the Telecom ministry as a document of agreement stating that the operator can provide the service after paying the respective fees. Before giving any LoI, the Minister studies the company profile, takes the recommendations of TRAI and Department of Telecommunications (DoT). All these rules were flouted by A. Raja

Let's look back as how events unfolded. 

Around June 2007, 575 applications were received who wanted to buy 2G spectrum to provide cell phone service in the booming telecom market in India. At that time the subscriber base had jumped to 350 million from just 4 million in 2001. Although 575 applications were received the spectrum was scarce and only 150 applicants could be alloted the spectrum. However, A Raja chose to play with the system and he decided to allot the spectrum to only those companies which he had prior contacts with. Real estate companies which had no prior telecom experience started applying. The queue was getting formed illegally and Raja now decided to favor some companies over the other. Spice, Idea who were waiting to provide services in Delhi and Maharashtra and applied in 2006 got pushed to the end while SWAN and UNITECH who applied in 2008 got shortlisted. The spectrum was sold to them at 2001 prices instead of the current market price.

When this came to the notice and Raja had still not issued the LoI, The DoT sent a letter on Oct 27, 2007 asking Raja to follow the auction mechanism. 

The PM Manmohan Singh also shot a letter on Nov 2, 2007 asking Raja to follow the transparent auctioning mechanism. However, Raja continued to write tricky and clever detailed letter - that following such a mechanism is harmful to telecom sector.

Dec 26, 2007 - The PM acknowledges receiving the letter and did not even send an objectionable letter mainly because DMK pressurized the PM not to act - A brazen act of cowardice. I question Sonia Gandhi as to why and how she could tolerate all this. This is where PM's mistake lies.

Dec 27, 2007 - DoT warns Raja again on issuing LoI to the new companies and asking to stop violating all norms that were in the rule book. 

Dec 31, 2007 - Finance Secretary retired and the LoI given by Raja to Finance Ministry to sign did not get approved.

By Jan 10th, 2008 - the new Finance Secretary is brought in and the LoI's signed. This was not brought to the notice of Finance Ministry or even the EGOM headed by Pranab Mukherjee taking everyone by surprise.

How did this decision go through? How could Manmohan never follow up this? Was he under constant pressure from DMK? What about Sonia Gandhi. It can't just happen that she is not aware of these things. How could she turn a blind eye? 

Despite giving licenses to 125 companies, only 35 operate till now. The remaining are not even in the market. So, who were these companies who were given spectrum and the spectrum at 2001 prices? Who is accountable for this money which runs to 1.76 lakh crores or $40 BILLION - enough to fund the entire country's defense, road and pro-poor schemes for almost 4 years.

This is how CAG report says: For more, also read this:

The entire process of allocation of UAS (Unified Access Service) licences lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner. The Hon'ble Prime Minister had stressed on the need for a fair and transparent allocation of spectrum, and the ministry of finance had sought for the decision regarding spectrum pricing to be considered by an EGoM. Brushing aside their concerns and advices, DoT , in 2008, proceeded to issue 122 new licences for 2G spectrum at 2001 prices, by flouting every canon of financial propriety, rules and procedures," the 77-page report says. 
Source: Times of India - click here

When it so happened that 2 companies SWAN and UNITECH declared that they sold 45% and 60% of their stake to Etislaat and Telenor respectively - the TRAI and the CAG were alarmed to see that without a single customer the spectrum that they purchased was sold to foreign companies. The profit these companies made is the amount that had to be paid to the Govt. Many of the recipients of the  spectrum are fictitious companies. Many of them didn't even qualify for bidding.

The Supreme court came down heavily on Mr.Singh and asked him why he did not bother to answer the PIL filed by Subramanyam Swamy and why he acknowledged Raja's letter. CLICK HERE

The PM doesn't want to answer. Can his silence mean his guilt? Clearly, Manmohan has failed. His responsibility to act has failed and his intellect is of no use to either this country or himself. How can the media never blame him for anything? Sonia Gandhi asks ministers to resign and questions BJP that they cannot do the same. If BJP cannot do the same, it is their problem. But as a lady whom the entire media calls the Goddess - a saint - durga maata (I hate such journalists who idolize Sonia. I will understand Indira, but never Sonia. Sonia doesn't even come 1% close to Indira Gandhi's life style), what is she doing to prevent corruption in the country. It is time for you to act Madam, not to accuse BJP. Talk what you would do against these people. Merely, resignations are not going to help. A month ago, she gave a speech (click here) admitting that corruption has reached every sphere of India and she is worried about it. Does she forget that culture of corruption started during the Gandhi family that ruled this country for 50 years? Was it not her husband Rajiv Gandhi who had been involved in Bofors scam and yet no conviction has been made. For 5 years that Congress was in power during Narasimha Rao, what did Congress do? How will the Congress President act against her own party and government?

Sunday, December 5, 2010

Power of Indian democracy - Bihar elections

About 20 years ago (if my memory is not mistaken), there was a Telugu movie - BHARAT BANDH. It was a heart rendering, scary movie of a political turmoil in India where a corrupt, mafia and a ruthless politician resorts to every possible treachery and becomes the PM of India. It is here when he converts the country to a state of anarchy where women could be raped anywhere, people could be killed at will and law and order could be rewritten at will. This movie, according to me, was a depiction of what Bihar was turning into at that time.

Under Lalu's rule, Bihar had become a JUNGLE RAJ. Kidnapping, rape, murder - were so common that when my parents once went to Gaya, the auto driver said he cannot drive after 6 p.m. as he was scared of his life. I could not believe my parents were travelling in their own country, a democracy which they cherish and celebrate every year. Is this a state in my country? Is this the very state from which Chandragupta Maurya established the first Indian empire driving away the Greeks with a powerful army shocking even the mighty Europeans? I, at once, felt this is not India.

Every time during Lalu's raj, booth capturing was common. People's votes were tampered. This is the state Lalu left. This is the state in which people feared life and not death. (The state then saw the largest number of out flux of Biharis to every part of India esp, Delhi and Mumbai).

For more than 15 years, caste played such an important role in Bihar. Politicians exploited this to the core. This time, however, after seeing that a GOVT can deliver, people from all castes, religions voted for JD(U) -BJP combine. In fact, several Muslim constituencies overwhelmingly voted for BJP. 

Bihar's 2010 elections whose results came about  a  week ago proved something else. A leader, a worker emerged - Nitish Kumar. The way Nitish Kumar worked for the past 5 years (2005-2010) is truly an inspiration. Having put 54,000 criminals behind bars, constructed roads, hotels, buildings, bridges, he scripted the largest turn around in growth amongst the poorest states in India. Nitish won 206/243 seats. Congress was crushed, Lalu was decimated. This is the power of Indian democracy. The people vote for the leader who shows something on the ground, who stands firm and who never tolerates corruption. Nitish has given a reality and a hope upon that reality that he will convert Bihar into a developed state. This is not a typical promise every CM makes. He proved to a very big extent he can deliver and then rekindled the hope. Hope he delivers.

I had earlier written an article in Jan this year (click here) showing how Bihar is experiencing a revolution - social and economic. I will not repeat the same here. Bihar today is buzzing with roads, malls, colleges, education institutes, improved law and order. In fact, Delhi has become "rape capital", while Patna has become a safer place for women. 50% reservation for women in panchayats and local bodies is already enacted and is slowly bringing about a revolution in Bihar.

Bihar's poor girls are now given free bicycle so that they can go to schools. This has decreased the school drop off rate and increased their enrollment.

Nitish, after election, decided to enact RIGHT TO SERVICE BILL which makes it mandatory for state govt officials to give citizen services in a time bound manner. This step is to curb the red tapism and corruption.(Hope, this kicks off and works as expected)

Nitish Kumar writes a blog too....!!! Here's the link.

So, is everything perfect in Bihar? No, social parameters in Bihar are still the lowest. 33% is women's literacy rate - it is the lowest in the country. Bihar has the highest school drop off rate. Agriculture and industrialization hasn't yet taken off. All this can take place only when law and order is placed. Electricity needs is also Bihar's greatest challenge. Mass employment generation is the need of the hour. Corruption still exists. Of course, for a state that has not seen progress for 15 years, it is a long way to go. Unlike several other states - TamilNadu, Andhra, Karnataka, Kerala, Maharashtra, Gujarat - Bihar lagged behind for 15 years. 

Bihar needs to aggressively follow the dual policy of agricultural growth coupled with industrialization. This is exactly what Modi is doing in Gujarat bringing massive employment opportunities to people. 

Some people remarked as to why I am so happy writing about Bihar. My comment to such a remark is this..".I am not a BIHARI, but I am an Indian. Whenever any of the poor states like Uttar Pradesh, Rajasthan, Bihar, Madhya Pradesh develop - the entire country grows with it. These poor states are the reason why India lacks behind. It is these BIMARU states that are holding back India's development. These states have the highest population density and the least governed parameters. Hence, the success of these states is very critical to India's rise."

Rahul Gandhi has a serious thing to do. Inspire an Indian to vote for him. Explain why should one see him as the future PM candidate. I don't see any charm other than age that acts as his biggest strength (apart from the obvious fact that he is a Gandhi). Rahul gave almost 6 speeches, stayed in Dalit's houses, made huge promises. None of his speeches was either inspiring nor had a vision to be happy of. I wonder why media continues to hype him. In fact, I was glad when media reported this question - Is Rahul over rated? Click here to watch the video. Congress just got 4 seats out of all 243 seats it contested (losing 5 seats from the last time) 

Nitish Kumar, Narendra Modi and in fact Sheila Dikshit stand as better contenders to PM than Rahul Gandhi.   

Sunday, November 21, 2010

Why is Indian economy so important for Obama?

From 3 hours when Eisenhower visited India to 3 days of Obama visit, India has come a long way and so is the recognition of India's rise by the sole great power - United States.

If one followed the print or electronic media last week, one would be flooded with emails, videos and articles of Obama's visit to India. On one hand, some have exaggerated to the core saying it was extra-ordinary, wonderful and path breaking while on the other some have said it was too much hype. One of the most interesting facts was that every speech of Obama talked about American jobs. There is nothing unusual about the President talking about his own countrymen amidst the mid-term election defeats back in his country. One of the things he knew was that the slow pace of recovery has made people impatient. If the US cannot pump money into the market to simulate the economy, the easiest way is to export its own goods and get the trade money into the market. This is simple economics that Obama and his 200 member CEO team had in mind and came to India.

Can India be of this great help to the US? Does the world's sole super power need India's help to bring life back into its economy? Is this a reality we live in where Asian countries - India and China have become indispensable not just to the US, but also to the world?


The answer is "yes". India first showed its military power by a single invasion of East Pakistan in 1971 shocking the world (thanks to Smt. Indira Gandhi) and the second instance when we conducted Pokhran -II (under Vajpayee). The latter incident made the world realize that India cannot be taken easily. It is a matter of great prestige that since then US and Indian armed forces (air force, navy and army) have conducted several joint operations (almost 50 such exercises that has been an excellent training for both) learning from each other. India today has the 4th largest army in the world and is a rising military power (It is another matter that our indigenous defence development is not strong). Last week when Obama came, he signed several billion dollar deals of defence equipment, machinery and fighter planes. The US just from military sales to India made more then 10 billion dollars money. This is beneficial to India as India gets the best technology and the latest weaponry. Our defense forces can't expect more than this.  Could any Indian imagine this 10 years ago? No way because despite our poverty, unemployment and corruption plaguing us then and now, we have shown that as a democracy we can grow despite the government. Indians are sharp enough that given a chance they can take over the world. In his visit to India, Obama so categorically said he is removing DRDO, ISRO and other defence organizations from the "restricted entities list". This means that all these establishments can now trade and have technology transfer with the US - something India badly needs. It is an achievement for India.!!!

Once this happens, expect outsourcing even in this field as India will continue to develop on its own and export. 

Let us not forget that for India, Russia has been a very reliable source of ammunition while US may be reliable now, but may become unreliable a decade later.


This might surprise everyone, but the fact is Indian exports to US has exceeded US imports to India. US wants to reverse this. Hence, they came with such a big CEO team to have deals with Indian business counterparts. The following chart shows trade surplus which India has because India's exports to US has exceeded than US imports to us.

Note: Our trade surplus has been rising and is 7 billion dollars because of exports of jewelry, spices, software and garments. Of the total trade with the world, US trade with India is around 2% ,which Obama did mention in his speech in Mumbai. He wants this to increase and it is beneficial for Americans because they tend to get jobs. Look at this - US finalizes deals with SpiceJet, Air India and Jet to buy $28 billion dollars worth of aircraft. In turn, this will create 280,00 jobs in the US.

India withstood the global recession because of in-house demand that continues to drive the economy to 9%. Unlike China, India is growing on the basis of domestic demand and not on exports.

US companies also want to invest in roads and highways - something which India needs as there is an expansion boom going on. 
Obama and his economic team believes that trade with India can multiply if India opens up its retail market allowing access to the middle class population, thereby benefiting both India and US. However, opening the retail market to US is a step that needs to be taken with utmost smartness and being cognizant of the huge middle class which controls the retail market. This is a lengthy discussion that is beyond the discussion of this topic.

India has invested heavily in wind and solar and it requires further research impetus from the US. Hence, Obama announced a joint research center for this and also for nuclear energy and shale gas. In the long term India gets to benefit from this.


There is no elaboration needed and this is no joke at all. Just to give the numbers. There are currently almost 10,000 Indian American owners of hotels/motels in the U.S., owning over 40 per cent of all hotels in the country and 39 per cent of all guest rooms; the study says they own more than 21,000 hotels with 1.8 million guest rooms and property valued at $129 billion. These Indian-owned facilities employ 578,600 workers.

The U.S. Census Bureau adds that there were 231,000 businesses owned by Indian Americans in 2002, which employed 615,000 workers and had revenues of over $89 billion. (The Census Bureau conducts the survey every five years, and the results of the 2007 survey will be available in a few days). A study led by Vivek Wadhwa for Duke University and the University of California, Berkeley, found that Indian immigrant entrepreneurs had founded more engineering and technology companies during 1995-2005 than immigrants from Britain, China, Japan, and Taiwan combined. Of all immigrant-founded companies, 26 per cent had Indian founders.  SOURCE:


If one is aware, it is a sad reality that 40% of fruits, vegetables and other agricultural produce goes wasted because of improper storage and processing facilities. India has to rely on retail expertise on the American ones to ensure this wastage does not happen by letting the retail market organize itself. The farmers and the end customer both lose here. The farmers don't get the right price, the consumer ends up paying abnormal price and the middlemen gets all the cake. The creation of a healthy supply chain involving farmers is a must. However, what India should resist is the dumping of American goods without strengthening the Indian supply chain. No longer India can depend on the Govt or govt's policies in organizing the retail chain. The US will stand to greatly benefit because the Indian retail market is so immense that any role they plan in making this happen will benefit them monetarily. We have seen how Reliance (in-house) has failed despite opening retail stores simply because they lack management and business practices which the US best follows.

In short, the point is we are at a point where the US and India can not only generate jobs for each other, but also India stands to benefit greater if it allows controlled market access to the US. This way the PM will talk  about  the role of India in creating the jobs in the US.

Saturday, November 13, 2010

India becomes world's 5th largest installed wind power

Some facts fascinate the growth of India. This is surely one of them. INDIA is the WORLD's 5th largest in terms of installed electricity through wind power. Here is the report from the WORLD WIND ENERGY ASSOCIATION OF THE WORLD confirming this. From a mere 4000 MW in 2005, we have now reached 13,000 MW in 2010. China is ahead with 25,000 MW. It is a journey that is taking the world by storm. India is not only producing electricity using wind energy, but also exporting wind turbines and blades to US, Europe, Africa. The components are also Indian made (80%). Now, one understands why Obama keeps talking of green jobs going to India and China.

How many have traveled to Kanyakumari? On the way you will see 100's of wind mill turbines on both sides of the road. I didn't realize the enormous benefit these turbines can give to Indian energy needs back in 2005. Today, I am amazed at the way wind energy is being tapped in the country.

There are about 18 private companies generating wind energy in India viz; Suzlon (5th largest in the world in wind energy generation and is an INDIAN COMPANY), Vestar, Gamesa, Enercon, RRB Energy, Shriram Leitner, Regen Power, a small number of companies in Coimbatore. By 2012-13, we are expected to grow to 18,000 MW. and by 2020 -  65,000 MW.  The 11th 5 year plan targets 9000 MW and we have already generated 5035 MW.

Here is the top 10 electricity producers of 2009 (using wind energy). We have increased by 2000 MW in  every year since 2005.
This is very interesting because in India the energy need is increasing exponentially as people are coming out of poverty and income levels are rising.

Today, the grid power capacity is 148 Giga Watt (GW) and only 16 GW comes from renewable energy (just more than 10%). However, this is all set to reach 90 GW in the next few years.

2 Classic examples of how this is changing the lives of people in some parts of India where it is heavily generated:

Dhule, Maharashtra:

Dhule has the largest windfarm in Asia.  800 Turbines generate about 1000 MW of Electricity.

Odanthurai, TamilNadu 

This village has 350kW windmill, solar panels and biomass gasifier which generate enough electricity that they make money by selling it to TamilNadu Electricity Board.

TAMILNADU, MAHARASHTRA and GUJARAT are the top 3 producers of electricity through wind energy in India.

Nowadays, with the set up of so many companies, the latest standards and practices are being used. However, transmission losses are inevitable, but the kind of technology that is being used in the generation is slowly showing its efficiency in this aspect.
Recently, Siemens entered the market and has begun to generate electricity.

On the flip side, the private companies should get incentives when they sell power. The charges they get is lesser than the ones generated from coal and water. Hence, the government has to make this lucrative. The usual problems like land acquisition, getting forest clearances delays in getting these has slowed down the momentum. Here are the some of the incentives government is giving to private companies that generate power from wind energy.

At the national level, wind power development benefits from fiscal and financial incentives, including provision of 80% accelerated depreciation; a ten-year tax holiday; and favorable provisions on wheeling, banking and third party sale. Eighteen out of the twenty-nine Indian states now have in place Renewable Purchase Specification (RPS) with mandatory purchase requirement of green energy of up to 10% and have introduced preferential tariffs for electricity produced from renewable sources

The scene as of now looks very optimistic with every major private company willing to investment in electricity generation as Govt badly needs them to meet the energy requirements.

Unlike solar, wind energy is not uniformly available in India. The west, north west and south India are the best suited while north and east are not.

So, have our electricity problems vanishing? The answer to this is "yes" and "no"....Yes, because the electricity generation is slowly shifting to  private players who are more easily meeting the planned targets. No, because the share of coal and water in electricity generation is still close to 90%. This has to increase, but expecting from private players can be much more forthcoming than the government. 

Saturday, October 23, 2010

The closing ceremony of the Commonwealth Games

Did Delhi meet the expectations? Here's detailed article on how BBC reported. To the people of India, it is great news that, yes, indeed, DELHI WENT BEYOND EXPECTATIONS AND DID A TERRIFIC JOB OF HOSTING IT.

The second article above shows the GAMES VILLAGE WAS EXCELLENT. The athletes to which BBC spoke only praised it and they loved it.

One should not forget that unprecedented security and no outbreak of dengue helped India a lot. Many countries even canceled their trips to India because of these reasons. Media exaggerated several such issues, however, India came out with flying colors as no incident of these kinds ever happened.

This is how AUSTRALIAN HERALD reported - In the end we all were all love with India - they were gracious hosts - but we never fell for the Games' organising committee.

 The closing ceremony was not as dazzling as the opening one, but nevertheless it was good. What made India proud was that it came second in the medals tally. It was also India's highest CWG medal tally since 1934.
There was also this complaint that for most sports people did not turn up to cheer the athletes. This was mainly because of the corruption and the way India's image was tarnished. However, as India won more medals, the crowds started coming in. 

The Games showcased India's sporting talent. Something unusual to see as cricket is often the most hyped and loved game in India.
I paste below the pictures of the closing ceremony (source: skyscrapercity and google images)

The night India dazzled and the world saw the spectacle

Everyday, when media continued to expose scandals, corruptions, defects, controversies surrounding the Commonwealth Games (even before it started), common man's embarrassment levels reached its zenith. Even till date this is going on. The whole games event proved 2 points - 1) the way the government works hasn't changed although India and the people are progressing ahead 2) India has great sports talent - 101 medals won is the biggest proof.

There were numerous complaints from the athletes. Some of them include - leaking water pipes, cracks in the walls, flooding issues, plumbing problems etc.

Below are the awesome pictures of the opening ceremony. It was definitely mind blowing. The music, the effect, the aerostat, the performance, acoustics,  - all were very perfect and wonderful. India that is rich in its heritage and culture was at its best display. Bala and his team who are famous for Mile Sur Mera Tumhara, Vande Mataram and many such wonderful tracks proved their mettle that night.

I dedicate that night to Bansi Kaul (Show Director), Ana Singh(costume designer for "yoga" and "Rhythm of India" segments, Seerat Narindra ("Tree segment"), Ashima Leela (Swagatham song and costume designer for 1150 children) , Viraf Sarkari (managing 7000 artistes from across India and used modern technology and aerostat to showcase the rich heritage of India), Omung Kumar (who designed the way Gandhi sketch came out showing the FATHER OF NATION).

Rehman song was a show stopper, his JAI HO was very good, but not the theme song of CWG. It was badly executed and I am shocked by Rehman's composition.

This brilliant aerostat costing Rs. 80 crore rose to 20 m in height and converted itself into a giant screen on which images were projected throughout. The colors and images changed based on the theme.

A brilliant fireworks display was one of the star attractions. The fireworks started in a circular fashion and went around the entire stadium and then finally into air.

The giant display of Buddha that came out from the bottom of the stage showed the "Padmasana" pose and the 7 chakras.


All forms of Indian dance one after the other - Bharatnatyan, Kuchipudi, Kathak, Kathakali, Odissi, Manipuri and Mohiniattam were performed with great artistes.

It is this wonderful team who gave a real positive feeling at the beginning of the games amidst all the dirty politics that tarnished India's image.

The crappy thing was how Doordarshan was the only one who got broadcast rights. The commentary was totally out of sync with the brilliant performance. This is how the foreign media (Australia and UK) reported the opening ceremony: