Wednesday, July 18, 2007

The More You Have, The More You Get...

Even though I don't invest in stocks (not being part of the elite clan of 3-5% Indian population who do), I was/am still awed by the news items about the dividends declared by various companies... And the implied "wealth" they must have created for the "middle-class" investors...

Given this personal context (ignorence?!), I found this report about the dividends paid by Indian companies in the Outlook Business (July 20th '07) quite interesting:

  • Between 01-02 and 06-07, the %age of profits that Indian companies paid as dividends dropped down from 12.85% to 10.71%

  • "In the list of 309 companies (of the BSE 500) only 27 paid out more than 30% of profits as dividends. Of these, 11 were the MNCs that have traditionally reptriated high dividends."

  • However, a look at the top dividend payers (in terms of %age of profits distributed) reveals an interesting finding - 15 of the top 20 dividend-payer companies had promoter holding of over 40%...
Here is the data for 2006-07:

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One must also note that in India, income from dividends is non-taxable....
And who were the "Hand-Sum Takers" of promoters' dividend during last 5-years?:

Asim Premji (Wipro)
Rs 2,154.38 crores

Shiv Nadar (HCL Group)
Rs 1,569.03 crores

BK Munjal (Hero Group)
Rs 503.25 crores

Rahul Bajaj (Bajaj Group)
Rs 431.79 crores

Anil Aggarwal (Sterlite)
Rs 568.11 crores

Dilip Sanghvi (Sun Pharma)
Rs 253.25 crores

...which reminds me of an old Hindi saying "पैसा पैसे को खीचता है" (money attracts more money) - or in modern paralance, we live in a (self-created) system where "The More You Have, The More You Get"...

Perhaps, that is why, the "trickle-down effect" does not happen...

Friday, July 13, 2007

Bihar I did not know about...

Bihar, as one "knows" - courtsey, the Indian MSM - is the back of beyond in a global, competitive economy... beyond any hope... and as VS Naipaul described it, where "civilsation ends"... one of the most backward, flogged states in Northern India....

Thanks to "Hat-Tips" (I guess that is what you say when you follow up from others' blogs) fromKrish and Cool Bihari, I could reach this news-report from BBC

5 spaces where Bihar outpaces rest of India:

Women Power
Bihar is the only state in India to have 50% of places in local municipal bodies reserved for women.... Today half of the 262,000 elected councillors to local municipalities in the state are women.

"The 50% reservation for women in civic bodies is not only empowering women but educating them to a great extent," says social scientist Dr Shaibal Gupta.

Speedy Trials
Fast track courts in Bihar have convicted and sentenced more criminals than courts in any other Indian state in the past 18 months.... Between January 2006 and May 2007, a total of 11,665 criminals were convicted through speedy trials and sent to prison... More than 2,500 were sentenced to life, and 21 others given the death penalty.

Politicians across party lines have also been tried through speedy trials.

Special Cops
Bihar is the only state in India where retired soldiers are being hired as policemen to stem the crime wave.

They mostly comprise the "special auxiliary police" force - about 5,000 retired soldiers were hired last year and sent to help police various districts.... The force has earned praise from Prime Minister Manmohan Singh who has asked other states to emulate the model.

Cash Cow
Bihar has a long and tortuous history of chronically unprofitable state-owned companies and their unpaid employees taking their lives.

But Sudha, a dairy co-operative, is a shining exception and one of the most successful exercises of its kind in India.

Launched in 1993, the co-operative's revenues from a range of milk and milk products has risen from $73.5m in 2001-2002 to $136m today. The co-operative has 6,000 outlets covering 84 towns in the state.... More than 260,000 milk farmers in the state are members of the co-operative, and a private bank has even launched a pension scheme for them.

Now Sudha has begun "exporting" milk to other Indian states like Uttar Pradesh, West Bengal, Jharkhand and Delhi.

Model Taxes
Did you know that a simplified tax system conceived and launched in Bihar is now being emulated by Sri Lanka and various African countries and has been lauded by the United Nations?

Introduced by the municipality of Patna, the state capital, in 1993, the tax system, locally known as the "Patna model of taxation" simplifies property tax rates on the basis of the local area and use of property.

...States like Karnataka, Uttar Pradesh, Gujarat, Tamil Nadu and Madhya Pradesh have adopted the same property tax model.

The UN was so impressed by the taxation model that it gave a $30,000 award to Bihar for introducing this method.

Now, one wonders... why do these facts not get reported in the Indian MSM??

Tuesday, July 10, 2007

Tips to Liberate/Occupy/Ruin a Country/Civilization

Rajiv Chandrasekaran provides these tips....since, as the Washington Post's reporter during 2003-04, he was a witness to the "history in making"...

    Unlike almost anywhere else in Baghdad, you could dine at the cafeteria in the Republican Palace for six months and never eat hummus, flatbread, or a lamb kebab. The fare was always American, often with a Southern flavor. A buffet featured grits, cornbread, and a bottomless barrel of pork: sausage for breakfast, hot dogs for lunch, pork chops for dinner. There were bacon cheeseburgers, grilled-cheese-and-bacon sandwiches, and bacon omelets. Hundreds of Iraqi secretaries and translators who worked for the occupation authority had to eat in the dining hall. Most of them were Muslims, and many were offended by the presence of pork. But the American contractors running the kitchen kept serving it. The cafeteria was all about meeting American needs for high-calorie, high-fat comfort food.

    None of the succulent tomatoes or the crisp cucumbers grown in Iraq made it into the salad bar. U.S. government regulations dictated that everything, even the water in which hot dogs were boiled, be shipped in from approved suppliers in other nations. Milk and bread were trucked in from Kuwait, as were tinned peas and carrots. The breakfast cereal was flown in from the United States–made-in-the-USA. Froot Loops and Frosted Flakes at the breakfast table helped boost morale.

    Whatever could be outsourced was. The job of setting up town and city councils was performed by a North Carolina firm for $236 million. The job of guarding the viceroy was assigned to private guards, each of whom made more than $1,000 a day. For running the palace–cooking the food, changing the lightbulbs, doing the laundry, watering the plants– Halliburton had been handed hundreds of millions of dollars.

    From inside the Green Zone, the real Baghdad — the checkpoints, the bombed-out buildings, the paralyzing traffic jams — could have been a world away. The horns, the gunshots, the muezzin’s call to prayer, never drifted over the walls. The fear on the faces of American troops was rarely seen by the denizens of the palace. The acrid smoke of a detonated car bomb didn’t fill the air. The sub-Saharan privation and Wild West lawlessness that gripped one of the world’s most ancient cities swirled around the walls, but on the inside, the calm sterility of an American subdivision prevailed. … It was 130 degrees outside … Inside the Green Zone, air-conditioners chilled buildings to a crisp sixty-eight degrees.

    The recruiting process worked fastest when there were no requirements other than political loyalty. When Bremer's budget chief asked for "ten young goofers" to perform administrative tasks, O'Beirne's staff had a list of names at the ready. It included Simone Ledeen, the daughter of neoconservative commentator Michael Ledeen; Casey Wasson, a recent graduate from an evangelical university for home-schooled children, and Todd Baldwin, a legislative aide for Republican senator Rick Santorum. A few days later, all ten received an e-mail from O'Bierne's office. It wasn't until they arrived in Baghdad that they discovered how they had come to the Pentagon's attention: they had all sent their resumes to the Heritage Foundation, a conservative think tank in Washington.

    Because of the personnel shortage in Baghdad, six of the goofers were assigned to manage Iraq's $13 billion budget, even though they had no previous financial-management experience. They quickly earned the nickname the "Brat Pack.""

    The responsibility for pulling together a civil administration plan rested with Mobbs, Feith's former law partner and a former arms control official in the Reagan administration. Mobbs had spent months in the Pentagon working up strategies to fight the oil well fires that Iraqi troops were expected to ignite as American troops invaded. He had no prior experience in the Middle East, no history of working with Iraqi exiles, and no exposure to other post-conflict reconstruction operations."

    David Dunford, a retired ambassador who was put in charge of the Foreign Ministry, was among the fortunate few to receive a briefing packet before his deployment. In it was a four-page memo about the ministry that seemed to Dunford as though it had been written by a summer intern at the State Department. When his requests for more information from State went unanswered, he posted a plaintive query for advice on an Internet message board frequented by Middle East specialists. The gist of his message, Dunford said, was "Here I am and I don't have a clue as to what to do.""

    One day early in 2004 as I was eating a meal in the green zone, the seven-square-mile enclave of air-condi-tioned comfort in Baghdad, I asked one of the Americans at my table what he thought of the massive suicide bombs that had killed dozens of people at a Shi’ite shrine in the city that morning. “Yeah, I saw something about it on my office television,” he replied. “But I didn’t watch the full report. I was too busy working on my democracy project.”


in an earlier post, I had once noted that:

    During the last century, US has made around 200 military interventions around the world.

    Based on 3 criteria, viz.,

  • declared goal of "regime change" or "saving a regime",

  • deployment and long-term commitment of large number of ground troops, and

  • deep involvement in the political process through use of American military and civilian processes),

    only 16/200 would qualify as efforts towards "Nation Building"

Sunday, July 01, 2007

How the Other Half Lives... still.. in USA

Sometime back, I was invited by an e-friend to start blogging on a colla-blog How the Other Half Lives.

The site introduces itself as:

    In 1890, Jacob Riis wrote about and photographed the appalling slum conditions in New York City. Around the 1890s, half of New Yorkers lived in slums (similar to modern Bombay) and Riis wrote his book to garner much needed attention. The book was called How the Other Half Lives.

    India is changing and in many ways. Yet in many ways India is much the same. This blog is a fruit of that tension and an attempt to examine the ground in between.

Curious to find something more about Jacob Riis, I googled and reached a 2003 article by Jack Newfield, How the Other Half Still Lives, who "tried to retrace some of Riis's steps through modern New York's pain and deprivation" to "understand better how the other half lives now"

Given that US is a benchmark of Gilded-Age prosperity for most urban-educated Indians, these excerpts are worth quoting:

    "...I hung out in unemployment offices, food-stamp application centers and the occasional job fair, where lines of job-seekers were never short. I traveled around in a van with volunteers from the Coalition for the Homeless... I visited union halls, food pantries, immigrant community centers and the dreadful Emergency Assistance Unit (EAU) in the Bronx. I interviewed community organizers, economists, politicians, leaders of nonprofit advocacy groups - as well as the jobless, homeless and hopeless.

    What I learned was that in some ways little has changed since Riis published his reportorial findings in 1890. The poor are still largely invisible to the complacent majority. Most Americans don't see the everydayness of poverty. It is segregated in "bad neighborhoods" and in impersonal government waiting rooms. We don't see all the people being told there are no applications for food stamps available at that location; all the people postponing medical treatment for their children because they don't have health insurance; all the people trying to find a job with their phone service shut off because they couldn't pay the bill; or all the deliverymen for drugstores and supermarkets paid only $3 an hour, which is illegal.
    In one way we are even worse off than we were 113 years ago: We have no Jacob Riis now humanizing poverty, making the satisfied see it and smell it. We have no American Dickens or Orwell, no James Agee and Walker Evans, no Michael Harrington, no John Steinbeck, no Edward R. Murrow.

    Something else in addition to poverty's invisibility that harks back to the first Gilded Age is the widening economic disparity between the rich and poor... In 1998 the top 1 percent of households collected almost 17 percent of the nation's income.... tax cut that gives the richest 5 percent of taxpayers most of the economic gain. This is a class-warfare policy of shooting the wounded and looting the amputees.

    What is amazing is that this expansion of inequality took place without ever becoming a noticeable issue in American politics. This growing concentration of wealth has given the superrich domination over politics through extravagant campaign contributions and media ownership...

    ....Downward mobility is the hot new trend in the city of buzz and billionaires. By every measure, unemployment, homelessness and hunger are on the rise in New York. In December, unemployment jumped up to 8.4 percent, the highest it has been in five years, the highest of any of the country's big cities. New York has lost 176,000 jobs in the past two years, more than any other city. Today more than 1.6 million New Yorkers (20.2 percent of the population) are living below the federal poverty line; another 13 percent are barely above it.

    And, as always, poverty is more severe among people of color. Blacks and Latinos comprise 47.5 percent of the city's labor force but account for 61.2 percent of the jobless. The city's poverty rate is 25 percent for blacks, 28 percent for Hispanics and 12 percent for whites....There are now 38,000 homeless people in city shelters each winter night - and 17,000 of them are children. Homelessness has increased by 82 percent since 1998.

    ...Every day the city's soup kitchens and food pantries provide about 1 million people with meals. The Coalition Against Hunger reports that because of increased demand, in 2001, the soup kitchens and food pantries have had to turn away 350,000 New Yorkers - including 85,000 children.

    ... Most poor people work. The roughly $10,700 a year that $5.15-an-hour minimum-wage jobs pay is without question not sufficient to hold a family together in New York. But a big part of the city's poverty crisis is the World of Low-Wage Work, just above the legal minimum--"McJobs," as organizers call them. There are hundreds of thousands of New Yorkers who are trapped in such jobs, from which they can be fired or lose shifts on the whim of a supervisor, at big chain franchises like McDonald's, Tower Records, Duane Reade drugstores and Gristedes supermarkets.

    ....More than 600,000 New Yorkers earn between $5.15 an hour and $10 an hour. Some 56 percent of these low-wage workers have no health insurance for their families, 52 percent have no pension or 401(k) plan and 37 percent receive no paid leave...

    ...About 800,000 city residents are eligible for food stamps, but do not receive them.... Only malice, or the most wretched incompetence, could explain the city's failure to provide food stamps to half the city's poor population. Food stamps add at most $4,000 of food to the table of a family living on less than $15,000 a year. They also recycle the money immediately back into the poor community's economy of supermarkets and bodegas. And if every poor New Yorker who is eligible received food stamps, it would inject almost $1 billion in federal benefits into the city's economy. Food stamps are the mother of all win/win propositions.

    ... With the recession now in its third year, New York's homeless population is larger than it has ever been. In the late 1980s the shelter population peaked at 28,700. Now it is 38,200. More than 85 percent of the city's homeless population are families, including 17,000 children. Forty percent of these nomadic children suffer from asthma and have no regular doctor.

    ... Every governmental attempt to ameliorate poverty seems to attract its own breed of parasite and leech. New York has had scandals involving poverty programs, community school boards, nursing home operators and Medicaid fraud, kickbacks to politicians for helping get state contracts for drug and alcohol rehab facilities, and politicians monopolizing twenty-year no-bid care leases....

These are just excerpts... If interested the full article is here

I guess, every country - even the most prosperous one - has its own underbelly. India has its own - and so has USA

Don’t know whether this realisation is a reassurance or a damnation.... What I did recall was the first line Tolstoy's Anna Karnina:

"All happy families resemble one another, each unhappy family is unhappy in its own way"