What good is government funding?

Does any government really believe that all the money that is allocated for various social and infrastructure projects actually works?

Analyse all the government efforts towards rural upliftment, removing poverty, creation of jobs, infrastructure. How many of these projects have been successful? How many projects were completed on time? How many were completed without any cost overrun?

“Garibi Hatao” was a Congress slogan way back in the late 60’s and early 70’s. Since then, except for maybe a max of 8/9 years, it is the Congress which has been in power. 30 years plus and we are still talking of people below the poverty line.

We have had reservation for certain classes of people for as long as I can remember and yet ‘dalit’ is still a huge vote bank and it should not have been if all the so called efforts were actually working.

Slums that have been around for so long… Government has promised to make them disappear in 5 years… How??? Will there ever be a political will to remove them? What happens to the whole vote bank then? And more importantly… where will the money come from?

Every infrastructure project gets delayed… in most cases they are delayed endlessly… China probably started the Tibetan railway project same time as we started the Kashmir railways. They are over and done with and we are still realigning the tracks!

Bandra Worli Sea Link is another case in point…

Government spending is all about making pleasant noise and that too only for themselves… the population that is likely to benefit never gets to hear it or understand the implication… more importantly they never get the benefits meant for them… all the money disappears in transit…

Where is the accountability? Who is responsbile for schemes to be completed on time and the benefit actually reaching the people it is meant for? And who checks the authenticity of all government claims?

Does the government use any project management software? Are the officials expert enough in managing the projects? What are their management qualifications?

If the government wants to be transparent enough… why can’t it create a website where anyone who wants, can track the progress of the project? why should we invoke RTI for the information?

Why are the tax payers left wondering about where their hard earned money goes?

I have a question for all those who have been saying that this budget would be very good in the long run… How will the deficit go away? how will we get a 9% growth this year? What are the short term measures to revive the economy and hopes of the people who are suffering because of the downturn??

Why is this post so full of questions?

It probably is because the government is completely clueless when it comes to managing the nation and its economy. One statement that perhaps symbolized this was the one Mr Pranab Mukherjee supposedly made on CNN-IBN on the evening of the budget presentation – “I don’t know why the markets tanked!!”

Recession proof people

Yes there definitely exists a breed which is not impacted by recession… at least overtly. And this breed straddles the two extremes of the society. Either below the poverty line or way up there in South Bombay or South Delhi… 

Those below the poverty line, it does not really matter as to which industry sector is down in the dumps or which one is showing growth… Subsistence level, the focus is on very basic needs and are supposedly dependent on government aid. By the way, a must read in this regard is an interesting article by Mr Vivek Debroy in Indian Express today. And as is the case with these people in our society, not too many words need to be devoted to them.

But the other set of people – the stratospheric people (SP)… the ones who have helped Louis Vuitton grow 11% in a supposedly recessionary global economy… lets talk about them. They are the biggest consumers of luxury products. Mind you.. luxury.. and not premium! As Seth Godin defines luxury products – “Luxury goods are needlessly expensive. By needlessly, I mean that the price is not related to performance. The price is related to scarcity, brand and storytelling. Luxury goods are organized waste. ” Luxury products are like signals… they tell something about the person.. beyond the fact that it is such a waste. And brands that understand these people… create that exclusivity in their communication.

Being on page 3 or to be seen as stratospheric people… brand surround is important. An observation – I see more high ticket brands of cars on the road today than I did 9 months back. Maybe I have started noticing them now or there actually has been growth in sales. Laura relaunch at 17 lacs + (Pune pricing) is an indication that there exists a market for these cars. But then Audi or a BMW or a Porsche… now those are real badges. and I see enough of them now on narrow Pune roads. The other day I even saw a Hummer! 

Cultivating these people is an art. Jimmy Choo would not be Jimmy Choo if they had an outlet in one of the malls isntead of a 5 * shopping center. Emporio, when they had the 80% off sale in delhi… I bet none of the SP even ventured close to the sale venue.

But here is an insight… SPs are not really recession proof. After all if the money disappears from the economy and there is a downturn, even the wealth (which is never accounted for in IT returns) also takes a hit. But to show they have been hit by the economy, would lead to immediate outcaste status (some interesting bits about this in Madhur Bhandarkar’s Page 3 i think). So brand hunger will not go away. But notice the subtle differences… within a brand, it may not be a top of the line purchase. Its all about appearances… a Louis Vuitton is a Louis Vuitton.

Of course a mention also for the people suffering because of recession. As would be very clear, they are the ones who earn their salaries… have loans to pay and are the ones who pay taxes and are the ones who buy the premium products. (premium product is an expensive variant of commodity goods). And as is obvious… thats where the sectors which cater to this segment are taking a hit in terms of sales. Also taking a hit are brands that are confused about who they are…. Luxury or premium… Mark’s & Spencer is a case in point.

India Inc. too has a humane side

Companies on talent hunt among pink-slip brigade Economic Times Bureau – 20th May 2009

The cynic in me obviously questions the motives. Great talent available at bargain prices and all that but then this article shows that there is hope for people who have lost their jobs.

People who were wondering what did they do wrong apart from being in the wrong place at the wrong time. They had talent, they had expertise but probably did not fit into the organization culture, did not have godfather in the organization, probably rubbed a few people the wrong and had to be part of the dreaded list. It made them feel worthless. Made them question their existence. Ask anyone who has been without a job for 6 months and he or she will tell about the trauma they are going through. Every opening they apply to and not get any response. Fear of not mentioning on their profile that they were laid off because no company will hire them.

All this could be thing of the past if this article really holds true and more organizations start hiring people who have been laid off. Of course organizations would benefit because there were lot of talented people who also lost jobs and would be ready to work for far lesser than what they were getting.

But there is a very important issue that needs to be addressed here.

Will the organization beat the poor guy down on the salary because he is not in a position to negotiate? Or believe that while earlier salary might have been way too inflated in the economic boom and negotiate something which does not demean the person’s worth.

The first move is fraught with danger for the organization because the person knows why he got hired and will leave at the first opportunity he gets. Why would he be around in the organization when he believes he was taken advantage of… just because he was on back foot.

But the organization which projects that it values the person’s expertise and is there to lend him a helping hand… it has got a person who is going to give lifelong loyalty.

Our culture has instilled a belief in us not to betray trust.

More importantly in the long run… when the economy does turnaround, its these organizations which would benefit with even more great talent. Because who wants to work for people who are only fair weather employers!

A while back I had written about how Pfizer is planning to provide free prescription medicines to people who have lost jobs in US and wondered if Corporate India can ever do anything like that. This article proves it that yes… India Inc also is capable of being humane… all business and economic considerations aside.

This truly would be a  National CSR initiative if more organizations start implementing this move.

Recession is Gone!!! Indian Economy will show the way!!!

So I would like to believe after reading this morning’s headlines. It took only two “historic” days to make the recession disappear.

The victory of Congress on Saturday and monday morning the Indian Economy is rocking.

Everything is linked to stock market and how it performed!! It sure has raised optimism of people to a new high.

To quote a few headlines:

Sensex Gives Manmohan a 21-ton Salute – Soars 2,111 points, sharpest One-Day rise ever by any index in the world.

Will help India Inc raise capital, fund projects

India Inc to loosen purse strings for infra projects

Rupee, bonds surge riding mkt euphoria

A minute makes India world’s best market

I better sharpen my brains because hey… there is going to be demand for my expertise all over again! After all when everybody is on a high and making money… I, the pragmatist guy, who believes in working hard and smart.. can also make some!

Today’s headlines remind me of the way things were a year and half back… Market was going up, up and up… people were spending money like nobody’s business and it seemed that India Inc was going to be the darling of the world and the whole momentum of the world economy was going to shift to India.

And then the American Economy collapsed and helped us awaken to a rude realization… The sun still shines out of  US’ a** (By the way… I am a conspiracy theorist who believes that like in the movie “Wag the Dog”, the whole recession in US was a manufactured one to ease the “Change” for Democrats…. You do need an issue to fight on.. dont you?

And let anyone deny this.. because India Inc has been crying itself hoarse that they have been hit badly by what happened in the US..

Wonder if any Newspaper can juxtapose the kind of headlines that were happening  when stock market had touched 21K?

The headlines wont be very dissimilar in their tone and manner…

We as a culture have started looking at even financial transactions to give us instant gratification!

Investors make Rs 3.6 lakh cr in a min … hell I dont even know how many zeros in that… And did they really make this money? as in money in their pocket??? Of course not.. if they did… then there would have been a run on the BSE!

While I dont want to be party pooper or prophet of doom, I do believe certain pragmatism is required.

We all have learnt some very hard lessons in past year and half and lets not forget them by what happened in min yesterday.

And lets not also forget that this government has to prove that it can provide stability… Watched the news last night… already the politics has begun (Congress does not want Montek as FM…. they want a politician! hell why politcian? how can his credentials match up to Montek’s?)

I will wait till the budget to see what reforms will this government provide (now that they cant blame their partners for holding them back).

I want to see if we are really independent of what happens in US

I want to see if the India Inc would really put money where their mouth is and walk the talk (its very easy to get in the newspaper by making relevant noises… after all our attention span is not what it used to be and we would soon forget who said what)