indian economy &market

Trump all set to change the rules

The Road Ahead for PM Narendra Modi

Indicators Predict a Repeat of 2008

End Users to be Back in Realty Market

News, Views & Lies in Between

With Malice Towards None; Charity for All

Newsmakers: The people & the places

INDIANECONOMY&MARKET

Vol. 1 | Issue 7 | January 2017 | ` 70 | www.ienm.in

When a system grows in a linear way, its potential instability grows exponentially. Clueless bankers and incompetent

politicians would resort to extreme untested policy measures when a catastrophe strikes on an unprepared society. Nine years since the last recession in 2008 and no one

should be surprised if it happens again.

2017

FEARYEAR O

F

2 | Indian Economy & Market • January 2017

Indian Economy & Market • January 2017 | 3

INDIANECONOMY&MARKET

Vol. 1 | Issue 7 | January 2017 | ` 70/-

Reg. No: MAHENG14169 dated 21/4/2016

EcoNomy• Government cuts official growth target• China’s forex reserves fall for sixth month• FPIs net outflow worst in 8 years• End users to be back in the real estate

market• Technology companies to drive the PE

market• The Jan Dhan Account Puzzle• Report: Individual wealth in India is in line

with global proportions

maRkETs• Market indicators predict a repeat

of 1929, 2000 and 2008• Global Socio-Political Storm Brewing• The year 2017 will be for Smart Investors• Some Unfortunate Truths About Investing• BSE gets Sebi’s clearance for IPO• On the Street

LEIsuRE• McDonald’s creator in movie ‘Founder’• Indians everywhere in every field• Shirt that connects with smartphone• More dying than being born

13

23

35

startup India: The very low proportion of startups gets funding

Leisure: People & PlacesNewsmakers in 2016: The people, the places and the incidents

18 40

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Released for the month of January 2017Volume 1, Issue 7, January 2017Total Number of Pages 48, including Cover

CONTENT24coVER sToRy

2017, year of Fear

REguLaR

8 anchor A Hyper-United, Hyper-Divided World

42 on Record With malice toward none;

with charity for all

45 Book Review

coLumN

10 Letter From New york Chekhov in New York William J. Dean

12 spotlight Eurozone: Time To Live Sensibly

Rather Dangerously Sudip Bandyopadhyay

36 Third Point News, Views & Lies in Between Ashok Jainani

38 side show Keeping a Daily Journal Krishna Kumar Mishra

44 Bookworm’s Bite The Best Way To Keep Happiness

Is To Give It Away P Raja

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PEOPLE VOICES

“We live in a society where women wilt and men age like fine wine. And for a long time, women accepted it. We were waiting for society to change, but now we’re taking leadership. It would be a lie to say there is less worry for women as they get older than there is for men….It feels there’s this unrealistic standard of what a woman is supposed to look like when she’s over 40.”

– charlize Theron, South African film star

“Life can never be boring, unless you make it boring.”

– Ruskin Bond

“Democracy is now in crisis and Donald Trump’s election and anti-Eu sentiment will help to empower dictators around the globe. Income inequality and a failure to redistribute wealth led to a revolt against the established political system. But those trends will help to energize leaders who have consolidated power, like Vladimir Putin. The US will be unable to protect and promote democracy in the rest of the world. On the contrary, Trump will have greater affinity with dictators. Trump will prefer making deals to defending principles. Unfortunately, that will be popular with his core constituency.”

– george soros, Hungarian-born billionaire

“Americans still subscribe to my vision of progressive change, and I am confident that if I had run again and articulated it, I think I could’ve mobilized a majority of the american people to rally behind it. I know that in conversations that I’ve had with people around the country, even some people who disagreed with me, they would say the vision, the direction that you point towards is the right one.”

– President Barack obama

“What people do not know is that every bank account up to Rs one lakh is insured by RBI and I don’t think people take this into consideration. We are one of those rarest regulated and controlled countries in the world where even the regulator has insured your money.”

– Vijay shekhar sharma, Founder and CEO of Paytm

“Trust and confidence of citizens in electoral system can be affected if the challenges and issues in the electoral process, including the way political parties are funded, remain unattended.”

– chief Election commissioner Nasim Zaidi in a foreword written in EC’s proposed electoral reforms, which has sought, among other things, bringing down the limit of accepting anonymous donations to Rs 2,000 for political parties.

“Manmohan Singh has been RBI governor, finance minister and prime minister. Wasn’t it his responsibility to curb black money? I’m sorry to say he is a failed economist, a failed finance minister, and a failed prime minister. It is because of his government and his party’s monumental mismanagement that we have the problem of black money. We’re in this mess because of him.”

– m Venkaiah Naidu, Information & Broadcasting Minister “There are combinations of

factors in India. There is GST but there is also interest rates. With very benign inflation, you are going to see lower interest rates which means that you can justify higher PEs. There is GST impact on earnings growth, lower interest rates, cost of capital coming down – all of these combining to give an incredible push to stock prices.”

– mark mobius, Executive chairman, Templeton EM


Donald Trump all set to change the rules of the game

W hen US President-elect Donald Trump lastly shared his views on US foreign policy and its priorities, he gave a clear hint that the world will have to accept

another set of permutations and combinations which might lead to a completely new axis. He also spoke about possible US-Russian deal on nuclear disarmament, which could lead to lifting sanctions imposed on Russia. When quizzed he very cautiously said that the sanctions against Moscow could be lifted if Russia and the United States reached an agreement on nuclear disarmament. There was a soft corner for Russia visible in his statement when he said that nuclear weapons should be way down and reduced very substantially, but Russia’s hurting very badly right now because of sanctions.

He noted that German open-door policy toward refugees was one catastrophic mistake. He also cautioned NATO stressing its importance, yet suggesting that it had to be reformed as he feels it’s obsolete, because it was designed many, many years ago. He also has a problem that all the 22 members are not paying for the protection provided. Not to forget what he has to say about Brexit. He praised the UK decision to leave the European Union and promised to sign a new trade deal with Britain, which would “mitigate the consequences of Brexit.”

About India, Trump has already mentioned during election and that is good. However, as long as he doesn’t open himself about his government’s Pakistan policies it would be hard to understand him. The Civil Nuclear Cooperation deal between India and the US,

signed in 2008, has brought both the countries closer. The agreement greatly benefited India by securing a waiver for the country from the international body that controls nuclear trade, enabling it to import nuclear fuel from multiple sources.

It would be interesting to watch the President-elect after 20th January since he will try to walk the talk – and there are many issues, one of the important for India is his China policy. Mr Trump, whose “America first” pledge helped him win the White House, has also threatened to hike tariffs on goods imported from China.

China is already spearheading the arms race in Asia. According to the Stockholm International Peace Research Institute (SIPRI) until five years ago, the USA (39%) and China (38%) shared an almost equal proportion of Pakistan’s arms imports. Now, China supplies 63% of Pakistan’s armaments, with the USA dropping to 19%. China’s rise to becoming the world’s third-largest arms exporter was to a large degree helped by heightened demand from Pakistan, which now buys 35% of these exports and is Beijing’s biggest buyer (Bangladesh follows at 20%). From 2011 to 2015, China sold $8.4 billion worth of arms, overtaking France ($8 billion) and Germany ($6.7 billion), although it still lags the US ($47 billion) and Russia ($36.2 billion). China’s share in the international arms export market has risen from 3.6% in 2006-10 to 5.9% in 2011-15 whereas France’s market share has declined from 7.1% to 5.6%, and Germany’s, from 11% to 4.7%, during this period.

The only positive thing that has happened in the

share of Pakistan’s arms Imports share of International arms Exports

(Source: Stockholm International Peace Research Institute) (Source: Stockholm International Peace Research Institute)

80%

60%

40%

20%

0%

40%

30%

20%

10%

0%2011-15 USA Russia China France Germany

Exporter

63%

19%

38% 39%

33%

25%

5.9% 5.6% 4.7%

29%

22%

3.6%

7.1%

11%

2006-10

Share (%) Export Share (%)china 2011-15usa 2006-10


EDITORIAL STRAIGHT TALK

The Road ahead for Prime minister Narendra modi

recent times is that there was a 73% drop in US security aid over four years to 2015 and also the US has cancelled the subsidised sale of eight F-16 fighter jets to Pakistan. But on the other side China has signed its biggest defence export deal with Pakistan. Under this contract China will supply eight conventional diesel-electric submarines, which will cost between $4

billion to $5 billion. The submarines could have a nuclear strategic capability. In a simple term, it means they could be used to launch nuclear-tipped land attack cruise missiles.

These are certainly not very encouraging developments. So the expected altered US foreign policies will certainly prove good for India.

Now, as the dust has settled, it’s time to understand whether India has really gained something out of

the gigantic exercise of demonetization. And the answer is positive. Although if the government is really interested in dealing with the problem of ill-gotten wealth, it would be useful to start the process by introducing transparency in political funding. The most amazing aspect is that no political leader was caught. Not many civil servants came under the radar. How it could happen? So there is certainly some disconnect, still it was a good beginning. This was unprecedented in India’s post-independence history. This fact must not be forgotten that the demonetization is truly the first major frontal assault on black money. It sends a loud and clear signal that the PM is serious about combating corruption.

Historically, the underlying purpose of demonetization has been to control inflation and loss of faith in the currency. When Germany, on November 20, 1923, introduced a new currency, the rentenmark, and declared all old reichsmark notes to be no longer legal tender, the reason was the domestic prices, already 14 times their 1913 levels in mid-1921 and 1,475 times towards end-1922, had skyrocketed to 1,422,900,000,000 times by November fuelling inflation and necessitating more printing of notes to pay 250 billion reichsmarks for a kilo of butter. And

Boris Yeltsin’s Russia, on January 1, 1998, redenominated its currency, with a ‘new’ rouble being made equal to 1,000 ‘old’ roubles. North Korea did the same on November 30, 2009, by creating a ‘new’ won equivalent to 100 ‘old’ wons. The intended goal again was to address rampant inflation.

Certainly India was not facing any such problem. Thus, Modi government’s demonetization does not follow the conventional logic of a currency stabilisation measure – there being no hyperinflation or loss of confidence in the rupee.

So it was not surprising to read the comments of some economists against demonetization. Certainly,

Prime Minister Narendra Modi has far more critics than well-wishers in academia. Economist Jean Dreze bitterly criticized demonetization. In his opinion, it will take an awful toll on the underprivileged and its impact might be worse and last longer than expected. But when in the same breath, he remarked that the real purpose of demonetization was perhaps something to do with corporate interests or electoral politics, he exposed himself. Remember Jean Dreze was a member of the UPA’s National Advisory Council (NAC).

Same way when Nobel Prize winner Amartya Sen criticized it, saying it was a gigantic mistake, both in terms of its objective of dealing with corruption as well as the objective of one rapid jump of getting into a cashless economy, not many eyebrows were raised. He said that Modi is a very good political leader, and he can certainly convince people so the Modi magic is there but this is Modi’s Napoleon moment. He was referring to the 19th century French conqueror Napoleon, known for cultivating an infallible image through his propaganda. Napoleon after his attempt to raid on Russia, on his way back, said that actually he did not want to do anything, just wanted to make an excursion into the snowy mountains of Russia.

But there was no snowy mountain in India that Modi just wanted to have a feel. It was politically a suicidal decision and the risk reward ratio was too high. Still the PM took this courageous decision only to clean the system. The problem with economists around the world is that they calculate everything in numbers. They forget that to gain something you have to lose something for some days.

Of course, the economic growth in the private sector has more or less ground to a halt for now, and recovering from this broad-based slump is likely to take time.

Innovation by definition is disruptive and uncomfortable and there are bumps. But, a year from now the GDP will be stronger dramatically because of the changes. And India will again be the envy of the world.


EDITORIAL STRAIGHT TALK

A Hyper-United, Hyper-Divided WorldBy Navneet munot Chief Investment Officer, SBI Funds Management Private Limited

W hat a year. The U.S. voted for change, and Indians were looking for ‘change’. Superman, Batman, Ironman can wait; Donald Trump is “Captain America”.

Clintons should have read the e(thical)-mail, those who serve public can’t have private servers.

Going by the rhetoric, this is Trumpnomics - climate change is a hoax by China, Janet Yellen is a puppet, companies offshoring production are anti-American and all trade treaties are unfair. Don’t forget, he is an astute businessman, not an idealist. President chosen by the poor has a power centre open only to hard-liners and soft-billionaires. Trump towers are not for ordinary mortals. He knows, billionaires in his cabinet have thrived upon globalization and immigration. Hopefully, real Trumpnomics would be about Tax reforms, deregulation and infrastructure spending.

Barrack Obama was a strong contender. He took the reins in 2008 after the worst economic crisis and is leaving when U.S. is near full employment, household and corporate balance sheets are in good shape, Fed is unwinding accommodation and dollar and equity markets are at a record high. Nobel peace prize was thrusted upon Obama in 2009. He obliged them by visiting places like Hiroshima, Vietnam, Cuba and by signing a deal with Iran. He moved out of Iraq and Afghanistan and binned Bin Laden.

I thought of US Dollar. It’s not only Mexican Peso that got Trumped on the wall but Dollar rose against almost all major currencies. Weaker currencies and cheaper money haven’t helped Europe, UK and Japan so far. It may change. Weaker yen can revive growth and inflation in Japan, bringing Cherry blossom early for Abe-San. Despite the heightened geopolitical risks, European equities can witness sunny weather next year.

London’s bridge with the rest of Europe is creaking.

May Theresa keep the Kingdom United. Oil producers hit melting point in January. The

existential crisis has re-united them for a production cut. Traders, watch the politics in Saudi Arabia and Iran and the response from US Shale. Industrial metals, coal and iron-ore turned precious while Gold lost its glitter.

Commodity boom sent Russian equities to top of the charts and turned on Russia’s economy. The size of Putin’s might is disproportionately larger than the size of the economy. A confused West is wondering how to deal with him. The collateral damage was Syria, which witnessed the worst mass slaughter after Darfur. Christ, the redeemer, at Rio was kind to Russian athletes suspected for doping. Will Trump, the newcomer, renew relations with Russia, the hacker, despite West’s distrust?

Who says the world is in a secular stagnation, China’s GDP has quadrupled in a decade. Yes, the debt levels are ballooning faster. Renminbi Bears will test the Dragon’s might again as China has lost almost a trillion dollar of forex reserves.

Taiwan’s first woman President broke the tradition and spoke to President-elect Trump. Unsurprisingly, China retaliated by capturing a US drone. Geopolitical experts have spent a career eyeing the Persian Gulf; the new entrants should shift their perch to South China Sea.

I thought of Cuba. An invisibly small country produced a leader with such global influence. You either loved him or criticized him but could never ignore Fidel Castro.

Narendra Modi deserves it. This popular leader of an aspirational middle-class is transforming into a messiah of the poor. He is ambitious, courageous and an incomparable risk-taker. However, India is such a complex country. Real change and last mile delivery will take longer and much larger bandwidth.

I wish peace has a chance and Kashmir again becomes the “paradise on earth”. A crazy cyclone and loss of its dear Amma derailed the Chennai express. Post demonetization, ‘Dangal’ in UP will be interesting.

It was the 25th anniversary of economic reforms unleashed by Narsimha Rao. A country that had to pledge its gold has now the distinction of owning one of the largest foreign exchange chests. 25 years later, 2016 may be remembered for reforms like Bankruptcy Code, GST, Monetary Policy Committee, Aadhar bill and demonetization.

The (Raghu)Ram Rajya at RBI got over but this Chicago cub left a deep footprint. Rajan conquered the minds of intellectuals and stole the hearts of ordinary citizens. He was well ahead of time in reminding fellow central bankers that they are not the “only game in town” to prop up animal spirits.

CDR, SDR, 5:25, S4A…That’s the alpha-numeral soup

Person of the year


ANCHOR BIG PICTURE

to deal with the cold of bad loans. Catching defaulters has been tougher than finding Pikachu on Pokemon Go. Hope the Bank Board Bureau is empowered and we get a Swachh Bank Balance Book. Demonetization was a herculean task and bankers were Standing By India. Those bad apples who connived for personal gains will pay a heavy price.

The Wells Fargo lesson is- better to Forgo your bonus than sell something not Well-suited for customers. A bank is built on deposits of trust and goodwill, not by milking clients through any means.

Elon Musk’s SpaceX had a safe landing while Amazon delivered its first parcel using an unmanned drone. The LIGO team of physicists detecting gravitational waves and bio-technologists at CRISPR inventing a method for editing genes deserve an ovation. I thought of innovators at John Hopkins for inventing a robotic hand for the disabled which is wired into the brain and feels like a normal hand. 2016 was the hottest year in recorded history. We need more Musks and more such scientists.

T for Tata is the first alphabet to learn about trust. Steely resolve in upholding values while running the Motor of value creation. The recent boardroom Power battle has made this Jaguar look like a Nano. T for transparency can ensure that this Titan institution regains its Taj like glory. Jaago Re - yes, that’s the consultancy Tata’s Sons need.

The ‘Greatest’ Ali will be remembered for his punches, both inside and outside the ring. Messi played balls with tax authorities while Ronaldo goaled the Golden Ball. Phelps, Bolt or Murray - its tough choosing the biggest star. I hope Sakshi’s strength, Sindhu’s agility and Dipa’s

Produnova in Olympics kindle a fire in our (pot) bellies. DJ Bravo rocked as West Indians were the real ‘champions’ of 2016. Dhoni’s untold story on celluloid and Virat Kohli’s fearless fury on ground captivated cricket fans.

Music doves are crying and singing Hallelujah with tears in eyes for Prince, Leonard Cohen and George Michael.

It was a year of humiliation for powerful leaders tainted of scandals in South Korea, Brazil, Malaysia and South Africa. True leadership is not about power, position or privilege, but about purity, service and responsibility.

Enthused by Brexit, Trump’s victory and the Italian referendum, all nationalist, right wing leaders in Europe are rejoicing. Look around, it’s the same story everywhere. Pakistan or black money - Indians cheer ‘surgical strikes’ by Modi. Both Shinzo Abe and Xi Jinping have struck deep nationalist chords. People supported strong leaders like Jokowi and Duterte, who are executing drug traffickers without paying heed to human rights activists. Turks hailed Erdogan for his heavy hand. Iran might see a hard-liner next year. Putin’s influence is mounting. If you think deeply, these popular leaders belong to neither right nor left. They understand the emotions of people who want to be heard and are desperate for change, whatever that means.

Facebook is now a nation of a billion users while Snapchat and WhatsApp made their way into millions of millennials’ conversations. Humanity is getting hyper-connected. This hyper-united network is dispersing thoughts and emotions at the speed of light. This world has new scales - truth is measured by the number of instant likes and retweets. Online debates are uncensored bantering by masked pseudonyms. Is this not reflecting in choice of leaders and ideas? Promises of instant gratification hold sway over rational arguments. Untested leaders and radical ideas are cheered everywhere. No wonder, Intelligentsia, elites, experts and establishment are getting Trumped.

This hyper-united world has hyper-polarised opinions. The caustic and close fight between Trump and Hillary, between “Leave” and “Remain” are examples of the increased polarity. Clamour for higher economic and social walls seems to have increased. Make no mistake about it; this is neither the end of globalization nor the beginning of nativism. We are just witnessing a high tide of envy, fear and anger - the deepest of human emotions.

The sentiment of the day and motion of the debate will keep changing, but the plurality and the pace of the new, hyper-united world will not. “Hyper-United, Hyper-Divided World” is my person of the year.

Wish you a happy 2017.

2016


ANCHOR BIG PICTURE

H aving arranged three sessions on the short stories of Chekhov at the New York Society Library, conducted by a Chekhov scholar, I am making use of every available moment, day and night, to read the assigned stories, lest I disgrace myself during the discussions.

Reading Chekhov on the Subway. A crowded subway car presents many distractions. A man boards holding a collection of large balloons. Barely visible behind the balloons, he is delivering them to a celebratory event somewhere in the city. A cyclist boards. He prefers rail travel to pedaling to his destination. The train leaves the dark tunnel to cross the Manhattan Bridge to Brooklyn. From the train window, views of the East River, Brooklyn Bridge and Lower Manhattan. Alas, Anton Pavlovich, I am making little headway in reading your short stories.

Reading Chekhov at Work. Forget it. Too many distractions. But I do look at the Chekhov picture on my office wall from time to time.

Reading Chekhov in Central Park. I watch a weekend softball game. Beyond the outfield, the glorious Fifth Avenue and Central Park South skylines provided by the Pierre, Sherry-Netherland, Plaza, Hampshire House and Essex House hotels. As a late afternoon Sun casts a golden glow over the city, I read aloud in the stands this joyous Chekhov passage: “And he was charmed with the evening, the farmhouses and villas on the road, and the birch trees, and the quiet atmosphere all around, when the fields and woods and the sun seemed preparing, like the workpeople now on the eve of the holiday, to rest, and perhaps to pray....”

Reading Chekhov at a Concert. My brother-in-law and nephew are chorus members performing works by Schumann and Stravinsky. As they sing, I pretend to follow the libretto, while surreptitiously reading Chekhov.

Reading Chekhov in Chinatown. I am having lunch at Maria’s. Chinese is spoken at the table I occupy.

Sotto voce, I read aloud passages from Chekhov.Reading Chekhov at Home. I lie on the living room couch in my favorite

position--horizontal--and fall asleep.Despite obstacles, distractions and human weakness, I complete the assigned

Chekhov readings and perform reasonably well at the sessions.Ah! Chekhov, you who understand how difficult life is for most people. You

who are generous in portraying those who strive to live a better life, even when they fail, which we mostly do. You who are modest, who seldom condemns. You who lists “compassion” as an artistic tenet. Favorite passages from my reading.

His tenderness for those who suffer: The young orphan boy who has been apprenticed to a shoemaker in Moscow. Mistreated and homesick, he writes to his beloved grandfather to come and take him back to the village. He places his tear-stained letter in an envelope and mails it, stampless, with only this address: “To grandfather in the village, Konstantin Makaritch.” (From Chekhov’s short story, “Vanka”)

A prisoner dreams of owning a farm, marrying, having children. Naive as his dreams were, they were uttered in such a genuine and heartfelt tone that it was difficult not to believe them... The constables listened and looked at him gravely, not without sympathy. They, too, believed in his dreams. (“Dreams”)

The failure to make full use of our lives. “What losses! What dreadful losses!” (“Rothschild’s Violin”). “Life is not given twice,it must be treated mercifully.” (“Gusev”)

Chekhov on “themes old, but not yet out of date”:

William J. DeanWriter of best seller book “My New York: A Life in the City”, served as chairman of The New York Society Library (oldest, founded in 1754). His essays appear on the Op-Ed pages of “The New York Times”, “Wall Street Journal”, and “The Christian Science Monitor”. He is a lawyer in New York City.

Chekhov in New York


Ny COLUMN LETTER FROM NEW YORK

[I]ncredible poverty all about us... Yet all is calm and stillness in the houses and in the streets... [W]e do not see and we do not hear those who suffer, and what is terrible in life goes on somewhere behind the scenes... Everything is quiet and peaceful, and nothing protests but mute statistics: so many people gone out of their minds, so many gallons of vodka drunk, so many children dead from malnutrition.... It’s a case of general hypnotism. (“Gooseberries”)

And now, shrinking from the cold, he thought that just such a wind had blown in the days of Rurik and in the time of Ivan the Terrible and Peter, and in their time there had been just the same desperate poverty and hunger, the same thatched roofs with holes in them, ignorance, misery, the same desolation around, the same darkness, the same feeling of oppression --all these had existed, did exist, and would exist, and all the lapse of a thousand years would make life no better. (“The Student”)

But Chekhov reminds us that just as nature can change -- “Looking at this gorgeous, enchanted sky, at first the ocean scowls, but soon it, too, takes tender, joyous passionate colors for which it is hard to find a name in human speech” (“Gusev”) -- so, too, can we change. “And however great was wickedness,... everything on earth is only waiting to be made one with truth and justice, even as the moonlight is blended with the night.” (“In the Ravine”)

Like the student in one of his short stories, Chekhov had a “talent for humanity.” The talent extended beyond his literary endeavors to his daily life. He raised money to assist famine sufferers. He provided funds for the building of village schools. Much of the income from his plays was used for this effort. He made an 11-week 6,500-mile journey eastward from Moscow to Siberia by train, horse-drawn carriage and riverboat to reach the prison colony on Sakhalin Island. Before leaving Moscow, he had written his publisher, “From the books I have read and am reading, it is clear that we have sent millions of people to rot in prison,we have let them rot casually, barbarously, without giving it a thought...” Once on the island, Chekhov conducted interviews with thousands of convicts. Of his book, “The Island of Sakhalin,” he said, “It gives me joy that this harsh convict’s robe shall have a place in my literary wardrobe.”

What began as a frolic -- reading Chekhov while traipsing around New York City --- became for me an important personal experience. His writings impart immense wisdom and his actions, immense admiration. What a transformation from his being, in his own words, a “slave” in his youth. He writes of himself: “[S]on of a serf... who was whipped many times... who used his fists and tormented animals... who was hypocritical in his

dealings with God and men gratuitously, out of the mere consciousness of his insignificance -- write [he urges a colleague] how this youth squeezes the slave out of himself drop by drop, and how, waking up one fine morning, he feels that in his veins no longer flows the blood of a slave but that of a real man...” (Chekhov’s father was born a serf. He obtained his freedom at age 16.)

Chekhov and India bring to mind R.K. Narayan, with whom I had the honor of meeting, through a mutual friend, in Madras in 1993. I came upon him sitting on the porch of his grand daughter’s house where he could both enjoy the tranquility of a small garden and watch the lively scene on the street.

Like Chekhov, Narayan writes in a quiet, understated way. This passage, from “Under the Banyan Trees,” would have resonated with Chekhov: “The village Somal... was in every way a village to make the heart of a rural reformer sink.” On the subject of rural reform, there were many sinking hearts in Russia and India, Chekhov’s and Narayan’s among them.

Both write with compassion. In “A Horse and Two Goats,” an ancient, impoverished farmer craves a sauce to enliven his tasteless meal. His wife, also elderly, turns on him: “You have only four teeth in your jaw, but your craving is for big things.” She then relents: “All right, get the stuff for the sauce and I will prepare it for you. After all, next year you may not be alive to ask for anything”.

At age 87, Narayan was physically frail, but his conversation was lively. We are driven to the Park Sheraton Hotel for a wonderful South Indian lunch. Betel leaves are served at the conclusion of the meal. He inscribed for me a copy of his latest book, “Grandmother’s Tales.”As he wrote in “My Days, A Memoir”, “On a certain day in September, selected by my grandmother for its auspiciousness, I bought an exercise book and wrote the first line of a novel...” His first year’s income as a writer was “about nine rupees and twelve annas...” He had, as yet, no conception of himself “as an economic entity.” Chekhov had a rocky literary start as well, with one critic commenting on an early submission, “A few witty words cannot obliterate such woefully insipid verbiage.” Toughness is required of a writer. Both persevered, to our enormous benefit!

We drive through the streets of old Madras. Mr Narayan and I part at the Hindu temple of Kapaleeswar where stall-keepers sell offerings of coconuts, flowers and fruit.

(Dear Reader, On prior page, note subjects of photographs on office wall behind me: Chekhov and Lincoln.)

Author can be reached at [email protected]


COLUMN LETTER FROM NEW YORK

Eurozone: Time to live sensibly rather dangerously

For those who fear that resort to referendums might erode parliamentary democracy, the recent past provides unhappy confirmation. The hysterical cry of the enemy of the people

against the London High Court’s decision that only parliament is entitled to make and repeal laws, demonstrates that some Brexiters do not care about parliamentary sovereignty. Their cause is rather dictatorship of the majority.

The phrase “enemy of the people” — used to turn opponents into outlaws — has an ignominious pedigree. During the French Revolution, Robespierre threatened “les ennemis du peuple” with death. The

Soviet Communists labelled opponents “vrag naroda”. The Nazis labelled them “Volksverräter”. The aim was always the same: to establish a dictatorship in the name of the people, thereby entitling the rulers to deprive opponents of freedom, even their lives, as the people’s condemned enemies.

An assault on judicial independence is often a part of such a story. The resort to referendums as a way of deciding constitutional questions undermines parliamentary democracy.

The consequences for Europe of Italy’s referendum result are not as obviously dramatic as those of Britain’s referendum in June. The British voted to leave the EU. The Italians have simply rejected

some complex constitutional changes, which many experts regarded as ill conceived in the first place. And yet Brexit and the Renzi resignation do form part of the same story. The European project is under unprecedented strain. Britain’s decision to leave is the most striking evidence of this. But, in the long run, the unfolding crisis in Italy could pose a more severe threat to the survival of the EU. The reasons for this are political, economic and even geographic.

Italy, unlike Britain, is one of the six founding members of the EU. The original European Economic Community was founded through the Treaty of Rome, signed in 1957. While the British were always the most Eurosceptic of the big EU nations, the Italians were traditionally the most enthusiastic unifiers.

But attitudes to the EU in Italy have changed profoundly — in response to the country’s long economic stagnation, the euro crisis and fears over illegal migration. It is hardly surprising that Italian voters are disillusioned with the status quo. Italy has lost at least 25% of its Industrial production since the financial crisis of 2008. Youth unemployment stands at almost 40 per cent. Unsurprisingly, many Italians associate the advent of the euro with a near-depression.

Mr Renzi’s departure may not prove a decisive event. But, so long as the Eurozone fails to deliver widely shared prosperity, it will be vulnerable to political and economic shocks. Complacency is a grave error.

A severe challenge is the divergence in economic performance among the members of the single currency, with deep recessions in a number of member countries (notably Italy) and stagnation in others (notably France). According to the Conference Board, a research group, between 2007 and 2016 real GDP per head at purchasing power parity rose 11% in Germany, barely changed in France, and fell 8% in Spain and 11% in Italy. It will probably take until the end of the decade before Spanish real incomes per head return to their pre-crisis levels. In Italy, this seems unlikely to happen before the mid-2020s. The painful truth is that the Eurozone has not only suffered poor overall performance, but has also proved to be a machine for generating economic divergence among members rather than convergence.

The combination of weak aggregate demand with huge post-crisis divergences in economic performance has turned the Eurozone into an accident waiting to happen. What the Eurozone needs most is a shift away from the politics of austerity. In its most recent Economic Outlook the OECD, a club of mostly rich nations, makes a cogent, albeit belated, plea for a combination of growth-supporting fiscal expansion with relevant structural reforms. In the big Eurozone economies, net public investment is near zero.

Those who matter — the German government, above all — view public borrowing as a sin, regardless of its cost. The political and economic impact of breaking up the Eurozone is so great that the single currency may well soldier on forever. But it has by now become identified with prolonged stagnation. It is time for the Eurozone to stop living dangerously and start living sensibly, instead.

Comment at [email protected]

sudip BandyopadhyayGroup Chairman of Inditrade (JRG) Group of Companies, sits on the Boards of a number of companies. He was MD of Reliance Securities (Reliance Money) and on the Board of several Reliance ADA Group companies. Also, former MD and CEO of Destimoney, promoted by New Silk Route.


COLUMN SPOTLIGHT

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government cuts official growth target

The finance ministry has sharply cut its growth

forecast for this fiscal to 7-7.5 percent from 8.1-8.5, but said inflation remained under control. Against this, the economy expanded by 7.4 percent in the second quarter of 2015-16 and 7 percent in the first quarter. In a mid-year review it also said that the fiscal deficit target for the current fiscal will be met despite some setbacks on divestment. The government aims to meet fiscal deficit target of 3.9 percent (of GDP) without big expenditure cuts. On fiscal deficit, the report said a lower than expected expansion in the economy will by itself raise the target by around 0.2 percent of GDP.

gDP likely to slow down

According to an HSBC report, GDP is likely to

have grown at a much slower-than-expected pace of 5% in the October-December period and may see a 6% growth in the following quarter due to a slowdown in manufacturing and services sectors post demonetization. Activity data across manufacturing and services as well as consumption and investment have clearly taken a hit after November 8, 2016, when the government announced scrapping old 500/1,000 rupee notes.

Foreign exchange reserves rose by $625.5 million to $360.29 billion in the week to December 2016, helped by an increase in foreign currency assets. The reserves had touched a lifetime high of $371.99 billion in september 2016.

�� Digital payments witnessed robust growth in terms of number of transactions and adoption in 2016 with Paytm alone contributing 26% share in the total number of digital payments in CY2016. The share of debit and credit card transactions tops the chart at 40%.

�� Hashtag banking on basic feature phones, supported by Unstructured Supplementary Service Data (USSD), made a 13 fold jump in volume in December to 94,300 transactions from 7000 in November and close to 14 times in terms of value to Rs 10 crore from Rs 73 lakh in the preceding month. The USSD platform is hosted by the National Payments Corporation of India (NPCI).

�� According to the United Nations Economic and Social Survey for Asia & the Pacific 2016 India’s economy is projected to grow at 7.6% in 2017 as investment regains momentum and manufacturing base strengths on the back of the structural reforms.

�� Between November 10-December 23, the total deposits in Jan Dhan accounts reported is Rs 41523 crore in 48 lakh accounts. This, together with the total deposits of Rs 45637 crore as on November 9, takes the aggregate

amount in Jan Dhan accounts to over Rs 87100 crore.

�� A joint study by Assocham and research firm RNCOS has revealed transactions through mobile wallets are expected to form the bulk of payments in the next 10 years, with their market value set to grow 211% annually between 2016 and 2022.

�� The online retail market stood at $14.5 billion at the end of 2016 from about $11 billion in 2015, thus it grew by only 15%. Experts feel it will grow at 40% in 2017.

�� The average assets under management of the mutual fund industry hit a historic high of Rs 16.11 lakh crore, excluding fund of funds, during the July-September 2016.

�� According to UBS Securities the volume of herbal personal care products is growing at twice the segment and the share of herbal products in the personal care segment will increase to 10% by 2020, from 6% in 2015.

�� According to a CCI report the radio industry is projected to generate Rs 2840 crore in revenues in 2017, up from Rs 2340 crore in 2016.

�� According to the analyst firm Everest Group, Indian IT companies may see a 3% contraction in revenue this year due to cloud, automation and cognitive. Industry lobby Nasscom has already cut the growth target for the sector to 8-10% from 10-12%.

�� According to India Ratings and Research (Ind-Ra) demonetisation is likely to pull down growth of the cement sector this fiscal to 4 per cent and may impact the debt level of small and medium producing firms. Cement output is estimated to grow around 4 per cent in 2016-17 as against earlier projection of 4-6 per cent.

�� Election Commission has indicated that the country has over 1900 political parties, but over 400 of them have never contested any election and suspected that these could be

conduits for turning black money into white.

�� According to a World Bank Research, technology could fundamentally disrupt the pattern of traditional economic paths in developing countries and automation threatens 69 percent of the jobs in India and 77 percent in China.

�� BSNL will reduce its workforce by nearly seven percent in 2017-18 from the employee-base of 2,09,996 in 2016-17. BSNL has a mammoth outgo of more than 50% of its annual revenue towards meeting salary expenses of its staff, whereas others, including Bharti Airtel etc. spend a mere 5 to 6 percent on staff salaries. Bharti has just 20000 employees and Vodafone only 13000 employees across India.

“Proper accounting is like engineering. You need a margin of safety. Thank God we don’t design bridges and airplanes the way we do accounting.” – charlie munger


ECONOMY INDICATORS

Eurostat (the statistical office of the European Union), which

since 1961 has been counting Europe’s population, in a report says that during 2015, 5.1 million babies were born in the EU, while 5.2 million persons died. It means the EU recorded a negative natural change in its population. Further, there is another surprising number: the EU population increased overall from 508.3 million to 510.1 million because the immigrant population increased, by about two million in one year, while the native European population was shrinking. Italy had the lowest birth rate where since the “baby boom” of the 1960s, the birth rate has more halved. The situation has economic impact too. Like Huggies diapers, has pulled out of most of Europe, whereas Procter & Gamble, which produces Pampers diapers, has been investing

in the diapers for old people.In 2008, the countries of the EU

saw the birth of 5,469,000 children. Five years later, there were nearly half a million fewer, a

decrease of 7%. And this is not only happening in countries with aching economies, such as Greece, but also in countries such as

Norway. Sociologists are coming out with different theories. A paper in the Washington Quarterly explains the consequences: “Europe has turned into an incubator of terrorism; formed a new poisonous anti-Semitism; seen a political shift to the far right; undergone the biggest crisis in European authoritarian unity.” An Italian missionary has explained that, due to falling birth rates and religious apathy, “Islam would sooner rather than later conquer the majority in Europe”.

This year’s World Economic Forum

(WEF) meeting in Davos will have some surprise element - Donald Trump and Brexit are set to dominate this important event. Secondly, Xi Jinping will be the first Chinese president to attend the annual meeting of world and business leaders in the Swiss Alps in its 47-year history. He is expected to speak in defence of free trade in his speech at the conference’s opening ceremony. Theresa May, the UK prime minister, is expected to meet with the Chinese leader after delivering a speech giving more detail about her Brexit plans in London. Although the US president-elect will not go to Davos, one of his top advisers - hedge fund boss Anthony Scaramucci - will speak about the new US leader’s plans.

The software association Nasscom lowered IT export growth target to 8-10 per cent for 2016-17 amid

global macroeconomic headwinds and the fallout of Britain’s exit from the European Union. In January 2016, Nasscom had projected 10-12 per cent growth rate for Indian software services, including the business process management, for the current fiscal. But global uncertainties like Brexit, post US election dynamics, currency volatility and slowdown in BFSI discretionary spend are impacting growth. Nasscom feels that the short-term political and economic uncertainties could last over the next two quarters. Nasscom expects the incremental revenue addition to be between USD 8-10 billion in 2016-17, against USD 10 billion in 2015-16. The export revenue growth (in constant currency) stood at 12.3 per cent in 2015-16.

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many surprises at WEF meeting in Davos Nasscom cuts IT export growth forecast

Very soon Europe will be unrecognizable citi lowers growth forecast

Global brokerage Citigroup has lowered India’s growth forecast

to 6.8 per cent for this fiscal from 7.2 per cent earlier, as cash crunch has affected pick-up in consumption while uncertainty around demonetisation may further delay any recovery in private investments. It said that the pick-up in consumption growth (both rural and urban), which was likely in the last two quarters of 2016—17, has not materialised because of cash crunch. Moreover, investment growth was very sluggish even in the second quarter and the uncertainty around demonetisation could further delay any recovery in private investment. It feels that this could drag down 2016-17 GDP growth to 6.8 per cent, versus their previous forecast of 7.2 per cent. The report, however, noted that there is not enough evidence of structural damage from demonetisation and 2017-18 GDP growth could be 7.5 per cent.


My claim is that we do not have a market economy, but a capitalist economy. – David korten

global Hunger Index Presents the REaL India

India has taken a lowly 97th spot in a ranking of 118 countries in the 2016

Global Hunger Index (GHI). Even Bangladesh, Iran, Iraq, and Nigeria are doing better than India in feeding their respective populations. The index, is based on four indicators: undernourishment across the population, mortality among children below five years of age, child wasting (children under five who have low weight for their height), and child stunting (children under five who have low height for their weight). India’s score this year is worse than the average among developing nations at 21.3 points. A score of between 20 and 34.9 points reflects serious hunger levels, between 35 and 49.9 indicates alarming hunger levels, and over 50 is considered extremely alarming. Over 15% of children aged below five suffer acute malnutrition and almost 40% aged below five suffered stunting.

global Hunger Index

country Ranking

China 29Vietnam 64Cambodia 71Nepal 72Indonesia 72Myanmar 75Sri Lanka 84Bangladesh 90India 97North Korea 98Pakistan 107Timor-Leste 110Afghanistan 111

china’s December forex reserves fall for sixth month

BREXIT in June, then Trump in November and next year the

threat of Marine Le Pen, the leader of France’s Eurosceptic party. Western democracies and international institutions look increasingly fragile. A recent survey of 25 countries by Ipsos MORI, a pollster, reveals the widespread discontent on which populists have preyed. In Britain and America 60% and 63% of respondents said their country was on the wrong track. In France, that figure is a whopping 89%. The underlying causes of this dissatisfaction vary by

country. Unemployment is the main worry in France, but not in Britain or America, where immigration and terrorism dominate. Germans, fret about poverty and inequality. Those who vote for populist parties

and politicians often focus on single issues at the expense of other problems. In France, the proportion of people who worry about unemployment is five times the actual rate of the unemployed. In Britain, anxiety over immigration is more than three times higher than the percentage of the population who are immigrants.

and what the world worries about!

China’s foreign exchange reserves fell to near six-year lows in

December, but held just above the critical $3 trillion level, as authorities stepped in to support the weakening yuan ahead of US President-elect Donald Trump’s inauguration. China’s reserves shrank by $41 billion in December, slightly less than feared, but the sixth straight month of declines, after a week in which Beijing moved aggressively to punish those betting against the currency and make it harder for money to get out of the country. For the year as a whole, China’s reserves fell nearly $320 billion to $3.011 trillion, on top of a record drop of $513 billion in 2015.

u.s. Job Data strengthens

America’s jobless claims fell to their lowest point, falling to

254,000. Private sector gained 156,000 jobs, with most of the gains coming from small businesses. While manufacturing was the only industry to see a decline in jobs, with a loss of 13,000, construction job gains of 14,000 compensated for the loss, while professional and business services led with a gain of 27,000 jobs. The decline in financial jobs is a continuing trend that has persisted since the Global Financial Crisis of 2007-2009, when many large investment banks shed jobs amidst a liquidity crisis and fears of spreading insolvency throughout the financial industry. Since then, the financial industry has rapidly shrunk, with large investment banks in both America and abroad routinely shedding thousands of jobs as a cost-cutting measure.


Markets change, tastes change, so the companies and the individuals who choose to compete in those markets must change. – an Wang

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maximum farmer-suicides not due to moneylenders

According to National Crime Records Bureau’s latest farmer-suicides data, farmer suicides saw a spike of 41.7% in 2015 from 2014. The year

2015 saw 8,007 suicides by farmers compared to 5,650 in 2014. Among the states, the data showed Maharashtra (3,030), Telangana (1,358), Karnataka (1,197), Chhattisgarh (854) and Madhya Pradesh (516). Karnataka saw a more than threefold rise in farmer suicides in 2015, as compared to 2014 when around 300 farmers ended their lives. The data also show that 80% of farmers killed themselves in 2015 because of bankruptcy or debts after taking loans from banks and registered microfinance institutions. According to data, of the over 3,000 farmers who committed suicides across the country in 2015 due to debt and bankruptcy, 2,474 had taken loans from banks or microfinance institutions. Only 10% farmers had committed suicide due to debts caused by loans taken from both banks and money lenders.

According to the data, “bankruptcy and indebtedness” farmer-suicides witnessed the sharpest spike in 2015, registering an almost threefold increase (3,097) as compared to 2014 (1,163). Farm-related issues, too, have seen a sharp spike of over 61%. While 969 suicides were recorded due to crop-failure and other farm-related issues in 2014, 2015 saw 1,562 suicides in this category. Maharashtra (1,293) reported the maximum number of suicides due to “indebtedness”, followed by Karnataka (946) and Telangana (632). With 131 deaths, Telangana reported the highest number of suicides by farmers who took loans from moneylenders, with 131 deaths, followed by Karnataka (113). Similarly, farm-related issues such as crop failure forced 769 farmers to end their lives in Maharashtra, followed by 363 in Telangana, 153 in Andhra Pradesh and 122 in Karnataka. Family problems (933) and illness (842) were other top reasons for suicides among farmers in 2015.

Trading at the new India International Exchange at GIFT

city in Gandhinagar is set to start on January 16. Through the new international exchange, BSE Ltd will look to provide an electronic trading platform that will facilitate domestic companies to raise capital in foreign currency by issuing foreign currency dominated bonds and to trade in such securities. Till now, Indian companies, when they had to raise funds, had to go to Singapore or the US or the UK, but now they will be able to do it at much lower cost and much faster in the GIFT city in Ahmedabad. Indian individuals cannot trade, but

Trading at GIFT City to start on January 16

corporate and Indian mutual fund institutions, with some regulations, can trade in the exchange. The BSE chief executive officer and managing director Ashish Chauhan said that ‘India International Exchange’ will trade in all the products like the other exchanges in the world such as Singapore, Hong

Kong, London, New York in currency, equities, commodities derivatives… It will not be available for Indian individuals to trade in for the derivatives as currently Indian regulations prohibit Indian individuals from speculating or doing derivatives trading in foreign markets.


“Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” – sir John Templeton

FRBm panel studying gDP, tax numbers

A government panel, set up to review the working of FRBM Act, is looking into GDP estimates along

with revenue numbers. At present, the committee is looking at the GDP estimates and revenue collections so far in the current fiscal. Last year in May, the government formed a five-member committee under former Revenue Secretary NK Singh to review the working of the 12-year old FRBM Act and examine the feasibility of a fiscal deficit range instead of a fixed target. The committee was originally slated to submit its report by October 31, but exceeded the time table after the government expanded its scope of work to include examination of the recommendations of 14th Finance Commission as also of the Expenditure Management Commission (EMC). The other members of the committee include former Finance Secretary Sumit Bose, Chief Economic Advisor Arvind Subramanian, the then RBI Deputy Governor Urjit Patel and NIPFP Director Rathin Roy.

FPIs net outflow worst in 8 years

Foreign investors pulled out more than $3 billion from the capital markets in 2016, making it the

worst period of the last eight years. Dollar strength and expectations of the rate hike by the US Federal Reserve, the US presidential outcome and the demonetisation drive sparked intense selling pressure in the capital markets. Massive pull out of FPI (Foreign Portfolio Investors) investment, particularly in debt, happened during the last two months. This pullout is an emerging market phenomenon, not an Indian phenomenon. The selling in debt is due to the market expectation of sustained Federal rate hikes starting December 2016. Debt instruments have taken the biggest hit, while equities continued to attract net inflows but not enough to compensate the huge outflows from the bond market. FPIs have purchased stocks worth about Rs 20,566 crore in 2016, but sold bonds to the tune of more than Rs 43,646 crore, resulting in net outflows of Rs 23,080 ($3.2 billion).

According to a report prepared by Bain & Company, amid the

growing turbulence, the Asia-Pacific private equity industry posted one of its strongest years on record in 2015. Deal value spiked to $125 billion, soaring past 2014’s previous record high. Exit activity, at $88 billion, remained robust despite the extreme volatility in the equity markets. Fund-raising was on par with the historical average. And the industry left no doubt about its value to investors: Returns from past investments grew across the region, extending the momentum begun in 2014. Limited partners (LPs) were cash positive for the second year in a row as general partners (GPs) found ways to return capital with improving returns.

The report says that all of this adds up to a much stronger, more resilient industry, but the obvious question is whether the momentum of the past two years can continue. The report states that while many traditional industries have languished, the Internet sector has

bucked the downturn and continues to present attractive growth prospects. PE has a longer time horizon than other asset classes and fund managers have more direct control over their investments, the industry has historically outperformed other investment options, especially in times of turbulence. The report indicates that – Asia-Pacific PE deal value rose a stunning 44% in 2015, to an all-time record of $125 billion—about twice the average of the previous five years. The number of individual transactions rose 34% above the five-year average, to 955, breaking through the 900 mark for the first time. Average deal size also sets a new record, expanding to $131 million—45% higher than the five-year average. The report concludes that as digital technology increasingly defines the daily routine in middle-class India, companies offering Internet-based solutions are exploding, generating a tsunami of interest among PE funds looking for growth.

Technology companies to drive the PE marketandhra Pradesh to become an IoT hub

Andhra Pradesh plans to turn into a IoT hub by

2020 and creating 50,000 jobs in IoT sector. The government proposes to set up 10 IoT hubs and wants to attract 100 IoT companies to set up operations, thereby creating a first of its kind IoT ecosystem in India. The program is aimed at positioning Andhra Pradesh as the IoT Hub in the country and grab a market share of USD 1.5 billion by 2020. So far, the IC2 Institute of the University of Texas and the Federation of Andhra Pradesh Chambers of Commerce and Industry have proposes a one of its kind IT incubation centre in Tirupati.


Very low proportion of startups get funding

according to 8th Annual Report on Indian Venture Capital and Private Equity on Startups, “Inspiration and Momentum for the Gladiators,” Indian start-up landscape has been very vibrant in recent years. Total venture investment in startups during 2005 to 2015 is estimated to be around Rs 1,11,700 crore. The average annual growth rate in investment flow in that period is about 42% and over 10,000 startups have

received funding. Average annual growth in the number of startups that have been funded in the last decade has been 16%. The average age at which startups get angel funding has consistently decreased from 4.77 years in 2008 to 0.54 years in 2015. A major concern was the low proportion of startups that get funded in India. For example, the percentage of global startups that are able to successfully raise capital in the grocery technology, healthcare and consumer healthcare, and smart home and home improvement are 41%, 52% and 36% respectively. The corresponding percentages for Indian startups are 5%, 10%, and 11%.

The annual growth rate of the number of investments by angel networks made during the 2009-15 period has been about 75%. In a span of seven years, the number of networks has increased 20 times. Average investment received from an angel round by a start-up has increased from Rs 10.63 million in 2009 to Rs 46.76 million in 2015 indicating an annual growth rate of 27%. The average investment made by an individual angel investor has increased from Rs 2.16 million in 2009 to Rs 16.95 million in 2015, indicating an annual growth rate of 34%.

aavishkaar to raise $100-150 mn for africa investmentsAavishkaar Venture Management will raise between Rs 681 crore and Rs 1,022 crore for investments in Africa. Aavishkaar will kick off the fund-raising by the middle of 2017 and expects to close it next year. The Africa fund, if raised, will be the second overseas-focussed fund for the impact investor. Aavishkaar Frontier Fund has backed three firms so far, one each in Indonesia, Bangladesh and Sri Lanka. It made its debut investment in US- and

Indonesia-based seafood firm North Atlantic Inc. Its next two investments were in Sri Lanka-based food processing firm MA’s Foods and Bangladesh-based payment solutions provider CloudWell Ltd. Some of the notable portfolio firms of Aavishkaar include Milk Mantra Dairy, Nalanda Learning Systems, Nepra Resource Management and Ergos Business Solutions. It has invested in at least 50 enterprises in India across eight sectors, with 90% companies focussing on rural and semi-urban markets.

sunil munjal and saroj Poddar to buy stake in PaytmIndustrialists Sunil Munjal and Saroj Poddar are in talks to pick a small stake in digital payments firm Paytm, which is owned by One97 Communications Ltd. Munjal, the chairman of Hero Corporate Services, the insurance redistribution and IT services arm of the Hero Group, and Poddar, chairman of fertiliser and engineering services conglomerate Adventz Group, are negotiating to pick a stake from early investor and former IDFC

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s Shalini Prakash, who’s been part of the 500 Startups investment, the iconic early stage seed fund and accelerator, will now take care of the India portfolio and contribute to investment strategy going forward. Earlier, she had a series of stints with other accelerators as well as Ink Talks, a TED-inspired program. Earlier Pankaj Jain was heading 500 Startups Kulfis for India, Sri Lanka, and Bangladesh. In India, 500 Startups has made around 60 investments.

a catalog of dying startups According to the research firm Preqin India is now seeing venture investments slide after surging to a record $8.9 billion in 2015. Ministry of Finance’s Economic Survey says that the boom pushed the number of technology-enabled startups to more than 19,000. A Bangalore-based firm has put together a catalog of dead or dying startups similar to the F**ked Company website created in the aftermath of the internet bubble. The U.S. site, set up in 2000, was a parody of the magazine Fast Company and chronicled the dot-com collapse. The India list, compiled by Tracxn Technologies Pvt, identifies nearly 800 fading or dead startups in almost every segment of technology, including e-commerce, online education and mobile software. F**ked Company gave people a public forum for discussion as venture money dried up and startups crashed.


ECONOMY STARTUP INDIA

Securities analyst Nikhil Vora. Once the talks fructify, the deal will mark a partial exit for Vora who owns about 0.35% share in the Alibaba-backed company.

Everstone buys stake in omniactive Health Private equity major Everstone Group has invested Rs 232 crore in Mumbai-based nutraceutical ingredient player OmniActive Health Technologies Ltd for a significant minority stake. The investment will help OmniActive in diversifying and expanding its offerings as well as in its inorganic growth strategy. As part of the deal, Deep Mishra, managing director at Everstone India, will join OmniActive’s board as a nominee director.

sequoia capital India, accel Partners invest in FreshdeskFreshdesk Inc., which provides cloud-based customer engagement software, has raised Rs 366 crore in its Series F funding round led by Sequoia Capital India and existing investor Accel Partners. Freshdesk has a world-class product vision. The SaaS-based startup provides customer support solutions. Its flagship product, Freshdesk, allows organisations to support customers through email,

phone, websites, mobile apps, forums and social media. Its clients include 3M, Honda, Bridgestone, Hugo Boss, and University of Penns. Freshdesk had last year raised $50 million in its Series E round of funding led by Tiger Global, with participation from Accel Partners and Google Capital. Freshdesk was founded in 2010 by former Zoho employees Mathrubootham and Shan Krishnasamy.

grocery e-tailer satvacart attracts investmentOnline grocery store Satvacart has closed its third round of angel funding with the participation of angel investor Nimit Panigrahi. The firm had earlier received the participation of Abhijit Awasthi, former national creative director of Ogilvy & Mather, SP Vijay, co-founder and managing director, Tarento Technologies and Karan Chellani, angel investor. Satvacart Innovative Concepts Pvt Ltd, runs the e-grocery venture, and follows a hybrid business model. It sources from neighbourhood stores in addition to stocking its own inventory. The company was founded in January 2015 by Hari, an IIT BHU graduate. In November last year, the company raised Rs 12

crore in its second round of angel funding from a bunch of unnamed high net-worth individuals.

kae capital invests in saas startup Learntron Chennai-based Heuristix Digital Technologies Pvt Ltd, which runs and operates learning-technology venture Learntron, has raised an undisclosed amount of funding from venture capital firm Kae Capital. It offers training programmes to tutoring and online learning ventures, K-12 schools and corporates on software -as-a-service (SaaS) platform. The firm operates on a business-to-business (B2B), partner-driven model and caters to markets in India, the Middle East and South East Asia. It follows an annual and monthly subscription-focused revenue model. The company was founded by Indian School of Business (ISB) alumni Kuljit Chadha and Subramanian Viswanathan in 2016. Some of Learntron’s customers include companies like the Mahindra Group, Britannia, Scope International and Delhivery. It also serves educational institutions such as TalentEdge, DPS Doha, Birla High School, Kolkata and GD Goenka Schools.

major tech giants back Digital India Juniper Networks with Rs 6,700 crore investment for the digital India drive is looking at schemes such as digitization and digital infrastructure for every citizen. Intel has also announced a slew of projects to back Digital India vision. One of its projects is aimed at accelerating digital literacy ‘Ek Kadam Unnati Ki Aur’ initiative. With major investments in Andhra Pradesh, Cisco is also setting up Internet of Everything (IoE) Innovation Centre in Visakhapatnam to promote regional innovation and to enable partners and startups to build solutions around IoE.

India retains its startup-hub tagIndia has maintained its position as the third largest startup base in the world with over 4,750 tech startups, ahead of countries such as China and Israel. According to a report released at the Nasscom Product Council, despite a funding slowdown in 2016 compared to 2015, as many as 1,400 startups have come up in 2016. Even the number of startups that have been funded has increased by 8%, though the overall funding has come down by 20-30%.

India is expected to capture 20% share in the global Internet of Things (IoT) market in the next five years and the overall global market is estimated to touch us$ 300 billion by 2020. other reports point out the IoT market in India is projected to grow at a cagR more than 28.2 per cent during 2016-2022.

The average annual growth rate of angel deals during 2008-2015 was 124 percent.


ECONOMY STARTUP INDIA

End users to be back in the realty market

IT has been 9 weeks since the demonetization event took place. India’s real estate market is learning to deal with its after effects. As expected, Real

estate is one of the worst-hit sectors as investing unaccounted wealth is extensively prevalent in this sector. While the panic is prevalent among developers and other market participants, together with implementation of the Real Estate Regulatory Act, this move will cleanse the sector. These regulations will assist in further cooling off prices, improving the sector’s image and attract more investments.

Residential real estate: Residential transaction volume has dropped considerably. Our conversation with the officials at the sub-registrar’s office in Mumbai reveals that registration of sale and purchase of properties has dropped 70%. A large part of it is due to the uncertainty around how much should prices correct by. While the demand from users and investors is steady, the uncertainty around prices and interest rates have

pushed the transactions further behind. The Primary sales segment in major cities like

Mumbai, NCR, Bangalore, Chennai and Hyderabad is largely dominated by home finance. Hence, this part of the real estate market is expected to recover faster. Home sales in tier-2 and 3 cities are witnessing a bigger slowdown. In the primary segment, the affordable housing segment is expected to recover faster. This segment is largely influenced by first time home buyers. The secondary or resale market will be certainly impacted, given the high dependence on cash for these segments.

While a slowdown in the number of transactions will reduce the prices, the actual registered value of the transactions will go up as considerations will not involve any cash component.

Home loan rates: Most Banks and NBFC’s have seen a fall of 20bps on home loan rates given excess cash expected in the banking system. A 50 basis point REPO rate cut was widely expected by the market in the December RBI meeting. However, RBI Governor Urijit Patel on its December 7

Berinder sahni,CFA MRICS, has vast experience in the Indian real estate sector and currently Director UNICUS.

meeting did not reduce the REPO rates. The RBI intends to keep the inflation rate at 5%. This year Crude oil prices have increased 40% and this could lead to inflation. US Fed also expected to raise interest rate over the next 2 years. Hence, with no major rate, but from RBI, no major reduction in home loan expected in the next 6 months. A reduction in home loan rates by 1%-1.5% could play a role in spurring up demand.

If one has a home loan of Rs 20 lakh at 9.5% for 20 Years, the EMI would work to Rs 20,884 per month; Every 0.25% cut in interest rates will reduce the EMI by Rs 300 per month

However, all banks will reduce the tenure of the loan rather than reduce EMI’s. Impact of reduction of interest rates is depicted in the following chart below for Rs 20 lakh loan for 20 year tenure.

Commercial and IT: The demand for Commercial and IT has been robust during 2016. Strengthening business confidence, stabilizing global concerns and an optimistic economic outlook are likely to infuse confidence into occupiers. Office absorption is expected to close to be 30 million sqft for 2016. Sudden decline in money supply and simultaneous increase in bank deposits is going to adversely impact consumption in the economy in the short term. The demand for commercial real estate, however, remains robust post demonetization. 2016 has seen some large commercial transactions. 2017-2018 will continue to see robust demand for commercial and IT space. H1 2017 will see large Commercial and IT lease and sale transactions that are currently under negotiations.

Land: There have been little or no transactions in land in the last 45 days. The primary reason for this is that Cash dominated the land transactions; Further, the focus of landlords and Developers has largely been about sorting existing issues related to reducing losses on cash conversion post demonetization announcement. There was also the looming concern of Income Tax scrutiny on these transactions. We expect the same trend to continue one more quarter.

Developers and new launches: Developers have been facing challenges due to lackluster demand since last 3 years. The number of new launches in


COLUMN BY INVITATION

allied activities. Hence, given the expected collection of Rs 14 lakh crores from demonetization, the Finance Ministry will be looking at various economic stimulus alternatives to boost the economy. Big budget Metro projects like Mumbai Metro Phase 2 and 3, NCR metro extension to Greater Noida will give a boost to affordable housing projects.

Budget 2016 has the following proposals for the real estate sector:• Exemption from dividend distribution tax paid by a special

purpose vehicle to a Real Estate Investment Trust (‘REIT’);

• 100% deduction on profits for building affordable housing project, in line with the Government objective of ‘Housing for all by 2022’;

• Clarity on Section 50C that the effective date for stamp duty value will be agreement value.

There are high expectations from the Budget in the Real Estate Sector in 2017. • Increase the interest benefit on home loans under Section

24 of the Income Tax from the present Rs.1.50 Lacs to Rs.3.00 Lacs

• Single window clearance for faster project approvals• Incentives for Slum development schemes• Simplify NRI taxation relating to TDS on rents and sale• Lower indirect taxes on sale of property under GST• Tax concessions on house insurance premiums paid by

homeowners• Additional allocation for infrastructure development in

peripheral areas of metros• Incentives to boost green development and consumption

of sustainable real estate

With Real Estate Regulatory Bill, the Benami Transactions Bill, the GST, and a possible economic stimulus the real users of real estate will be back in the market. However, this will take time and we can expect recovery by Quarter 3 of 2017.


2016 are already down 54% since last year. We expect Developers to further slowdown launches in 2017. Postponing of purchases by buyers and investors will further add to the inventory levels of the Developer.

Due to the slowdown in sales, the debt levels of few Developers have reached its peak and are going through restructuring of payment terms with banks. Even before de-monetization, there were several Developers who had started defaulting on bank loans. Small and mid-size Developers are increasingly looking at Joint Development agreements and Joint ventures with larger Developers as sales volume and availability of bank finance has slowed down considerably. Larger Developers are benefiting from lucrative deals being offered to them. International Private Equity funds and NBFCs are partnering with large developers to fund such transactions for takeover / joint venture with smaller Developers. Customers are increasingly looking at the size of the Developer and ability to deliver projects while taking the purchase decision.

Retail: Cash transactions dominate Indian retail trade. November saw a reduction in the sales across all retail channels. However, the impact is felt more by the unorganised retailing segment, rather than the organised retailers. Some sectors like jewellery and the luxury segment have been impacted more than others and will take longer to revive. Demonetization has resulted in low footfalls in shopping malls in November; however, with the movement of currency starting in December using alternate payment arrangements, big discounts offered by retailers, holiday season in December, and release of big budget movies like Dangal, the footfalls are back in the malls. In the medium-to-long run, domestic consumption will be stable owing to India’s strong economic base and favorable demographics. Rentals at retail level in Tier 1 cities are stabilized. However, Tier-2 cities capital value and rentals for retail properties will see downward pressure.

Stock market reaction: Since budget 2016, the NIFTY Realty Index had gone up by 52.1%, showing a big recovery over last 5 years. Since demonetization, the Realty Index has fallen 20% showing concerns of Investors on falling real estate prices. Since demonetization, Phoenix Mills has gained 1%, Puravankara and Omaxe have lost 4% and 5% respectively. DLF and HDIL have lost 27% while Kolte Patil has lost 33% wiping out all gains since beginning of the year.

Economic Stimulus: The real estate sector contributes approximately 7.5% of the GDP directly and through

2016 NIFTy Realty Index

250

200

150

100

50

01 Jan’16 1 Mar’16 1 May’16 1 Jul’16 1 Sep’16 1 Nov’16 1 Dec’16

Budget 2016

Demonetization


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The Jan Dhan account Puzzle

Financial Inclusion as on 7 Dec’16

Banked512953242

41.04%

unbanked737046758

58.96%

Type of accounts as of 7 Dec’16

Non-Jandhan254724526

49.66%

Jandhan258228716

50.34%

JanDhan account share as on 7 Dec’16

Psu205129504

79.44%

RRB44473771

17.22%

Pvt8625441

3.34%

Ru-Pay card Holding among JanDhan account Holders as on 7 Dec’16

Ru-Pay card

78.06%

Without card

21.94%

cards statistics

credit cards26378940

3.57%

Non-Rupay card510883742

69.15%

Ru-Pay card201582045

27.28%

Non-cash Tools per 1 Lakh Population

aTm

16

Debit cards

56997

Pos

117

credit cards

2110

(Source: RBI, PMJDY, NCPI)

There are speculations that the rich have laundered their wealth

by using PMJDY (Pradhan Mantri Jan Dhan Yojana) bank accounts. In fact, deposits in Jan Dhan accounts witnessed an abnormal surge immediately after the announcement of demonetization. However, the trend reversed in early December and total deposits started coming down. From a peak value of Rs74,322 crore on 30 November 2016, total deposits in Jan Dhan accounts had come down to around Rs70,000 crore at year end. Average balance for non-zero balance Jan Dhan accounts also shows a similar trend in this period. This is to be expected assuming that account holders would have first deposited their cash in hand and then withdrawn it, as

liquidity conditions eased.Reports indicate that zero balance

accounts are rising, especially in election-bound states. Jan Dhan accounts data shows that the number of such zero balance accounts between January 2016 till a day after demonetization declined by 4 million, but, after post demonetisation, 8.5 lakh people were added to the list of zero balance account holders. The number of people with Jan Dhan accounts also increased by 4.6 million after the Rs 500 and Rs 1000 notes were declared illegal tender. Uttar Pradesh for instance saw a rise in zero balance accounts to 9 million. Around the time demonetization was announced, UP had 8.6 million of such accounts.

The number of Jan Dhan account holders during this period also increased by 10 million in the state. In Gujarat too, one lakh more zero balance accounts have been reported. This has raised the total number of such account holders in the state to two million. Similar trends are visible in other states going to the polls like Uttarakhand, Punjab, Goa and Manipur. There are almost 20 million zero balance Jan Dhan account holders in these states. Similarly, the government is closely scrutinising the massive surge in Jan Dhan accounts since demonetisation. The Central Board of Direct Taxes (CBDT) had issued a warning to all account holders not to act as fronts for money laundering, but after demonetisation, deposits in such accounts have surged by more than Rs 27000 crore.


ECONOMY REPORT

“The goal of long-run economic growth without asset price bubbles is not only achievable, but is something we should expect if we put a sound regulatory framework in place and if policymakers remain vigilant.” – christina Romer

• The phrase “double-dip recession” was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of “financial collapse” in 2006 and 2007. It did come.

• Thirty years ago, there was one hour of market TV per day. Today, there’s upwards of 18 hours. What changed isn’t the volume of news, but the volume of nonsense.

• There is no accountability in the financial pundit arena. People who have been wrong about everything for years still draw crowds. The more someone is on TV, the less likely his or her predictions are to come true. Trust no one who is on any financial TV news channel more than twice a week.

• Most of what is taught about investing in university is theoretical nonsense. There are very few rich professors.

• Markets go through at least one big pullback every year, and one massive pullback every decade. Get used to it. It’s just what they do.

• The more comfortable an investment feels, the more likely you are to be slaughtered.

some unfortunate Truths about Investing

Warren Buffett captured in a documentary

Warren Buffett is a living embodiment of American capitalism. The much awaited documentary based on the life of the legendary

investor “Becoming Warren Buffett” will be released in January. Directed by Peter Kunhardt, the movie project was in the making in the last two years and had active involvement of Buffett’s three children as interview subjects. It is reported that the Oracle of Omaha was completely open about his life. The documentary covers much of the ground Buffett enthusiasts will have tread before in their reading about the billionaire investor. But it’s sure to please both the hardcore Buffett enthusiasts and the newcomers to his story.

• Instead of trading penny stocks, just light your money on fire.

• Not a single person in the world knows what the market will do in the short run. End of the story.

• There will be 7 to 10 recessions over the next 50 years. Don’t act surprised when they come.

• The majority of market news is not only useless, but also harmful to your financial health.

• Most IPOs will burn you. People with more information than you, want to sell.

• The best investors in the world have more of an edge in psychology than in finance.

• What markets do day to day is overwhelmingly driven by random chance. Ascribing explanations to short-term moves is like trying to explain lottery numbers.

• If you have credit card debt and are thinking about investing in anything,

stop. You will never beat 30% annual interest.

• A large portion of share buybacks are just offsetting

shares issued to management as compensation. Managers

still tout the buybacks as “returning money to

shareholders.”


MARKETS INDICATORS

MA

RKE

TS

When a system grows in a linear way, its potential instability grows exponentially. Clueless bankers and incompetent politicians would

resort to extreme untested policy measures when a catastrophe strikes on an unprepared society. Nine years since the last recession

in 2008 and no one should be surprised if it happens again. The crisis keep coming fairly regularly: 1987, 1994, 1998, 2001, 2008. Every

time, it appears the previous crisis was only a foreshock. The earthquake is now coming in 2017, says ashok Jainani

FEARYEAR O

F


MARKETS COVER STORY

W hen a system grows in a linear way, for a prolonged period, instability of the

system grows exponentially. Disasters generally arrive when nobody expects the same. People become complacent, or get used-to the existing state of affairs, believing the current trends would continue ad-infinitum when it’s known in advance what an outcome would be for a given input. Because, people get conditioned to believing the same and are blinded by the paradigm shift in popular thoughts and mainstream behaviour that they are unable to fathom the shift in trend taking place before it actually hits them suddenly in the face.

The flawed paradigms persist for a long period of time, before they are broken, because of the allure of elegant mathematics propounded by decorated dogmatic academics and system-induced inertia. It’s nice to stay in a warm bed on a cold winter afternoon. Some of these beliefs and notions will be broken in 2017, the Year of Fear.

Duration between the two crises is not fixed by any sovereign nor does it lie in the realm of economists’ professing skills. Nine years since the last global financial crisis in 2008 and no one should be surprised if it happens again. In fact, it should only be expected since history is replete with such examples of crises, each being bigger than the previous one, bringing catastrophic losses and slashing peoples’ living standard by imposing new taxes and ever increasing intrusive rules on individual privacy. No matter the powers-that-be assuring us that newly minted billions are earmarked for increased regulation, oversight and preventive measures. But the crises keep coming fairly regularly: 1987, 1994, 1998, 2001, 2008. Every time, it appears the previous crisis was

only a foreshock before the earthquake. It’s now coming in 2017!

Brexit, Trump victory and Modi’s currency ban are “Upredictable Outcomes.” The new year will bring many such outcomes. In fact, “Unpredictable” will become the new normal for the year. That will spike volatility, across asset markets and in peoples’ opinions. They will oscillate from optimism to extreme fear with rise in the risk premiums.

The investors must now accept, and expect, that the next crisis in the global economy and financial markets is not going to be a long and slow decline, but rather a sudden one at a much bigger scale because it will begin at the biggest scale so far. Trillions in outstanding derivatives, trillions in central banks’ Quantitative Easing and trillions in corporate debt defaults.

The global war on terror, war on black money, interest rates rigging by banks’ cartel, freak-trades or Wall Street flash-crash, passenger aircraft disappearing are not black-swan events. In fact, the ravens all around are pointing to an unprecedented event in the form of fall of capitalism itself. Clueless central bankers and incompetent and selfish lawmakers, after trillions in fiscal stimulus, extreme untested policy measures will be needed when a catastrophe strikes on an unprepared society. “Governments around the world have no compunction about conspiring against their citizens,” says Mr James Rickards in his latest book The Road To Ruin. More and more debt is going into less and less productive assets, thereby lowering investment returns.

India ratings cloudedNo one could imagine before Mr Modi’s surgical strike on black money at the turn of the year 2016, nor are people able to conclusively estimate the probable impact of Mr

Modi’s demonetization of high denomination notes. The “war on black money” is nothing but a war on cash. The move has several side effects, including causing depression, and also the bad loan re-sets, to be seen in the coming months, though the main stated objective remains to weed out corruption and stop terror financing. He and his government aim to force change in people’s spending behaviour through rationing of cash and increased use of digital transactions so that these could easily be tracked and taxed if evaded, or confiscated by the federal authorities if established as “sin money.”

Forced money lock-in in banks and rationing of cash will lead to demand destruction in informal sectors and cut India’s GDP expansion to traditional Hindu growth rate of about 6-6.5%. This does not augur well for Mr Modi’s dream project of housing for all. At that rate of growth, Indian markets can’t remain overseas investor’s darling and claim higher price-earning (PE) multiples.

It’s america FirstUS President-elect Mr Donald Trump and Prime Minister Mr Narendra Modi have already made it loud and clear that they are determined to take extreme policy steps on economic and foreign affairs front. The United States under Mr Trump’s presidency would re-draft and alter the contours of the free trade under WTO and Trans-Pacific Partnership. He calls China’s

The global war on terror, war on black money, interest rates rigging by banks’ cartel, freak-trades or Wall Street flash-crash, passenger aircraft disappearing are not black-swan events. In fact, the ravens all around are pointing to an unprecedented event in the form of fall of capitalism itself.


MARKETS COVER STORY

unbalanced trade surplus with the US as “the greatest theft in the history of the world.” This conforms to the economic theory of mercantilism and worldview of the Queen Elizabeth-I of the 16th-century England, and to Prussia’s Iron Chancellor, Otto von Bismarck, in the 19th century. Mr Trump vows to deport 3 mn illegal immigrants immediately after inauguration.

china Red FlagsChina’s building artificial islands in Sparta Islands, in order to establish its claim on territorial waters in South China Sea, ostensibly for resource control, could be a flashpoint for a military conflict with its neighbours Philippines, Taiwan, Malaysia, Vietnam and Brunei and lead to renewed arms race in the region. China’s exports shrank 6.1% last month, signaling renewed weakness for the world’s second biggest economy as it faces possible trade tensions under Trump’s trade tantrums. China has recorded shrinking exports in ten out of eleven months to December 2016.

BrExit, FrExit and QuItaly!The days of super returns on stocks are over as the factors and forces that drove exceptional investment returns to investors over the past three decades are weakening, and even reversing. An extraordinarily beneficial confluence of economic and business fundamentals such as inflation, interest rates, pro-globalisation investment-led GDP

growth, corporate profitability and market re-rating as a result of opening up of the financial sector itself has lived its course and threatens redesign and reallignment of the global trade. The stock markets, which abhor uncertainty, ought to be very sensitive to these far-reaching changes the world is witnessing and the consequences are going to be borne by the investors. After the UK’s exit from the European Union, emerging leadership in Italy and France are promising their voters to take these countries out of the monetary union that is considered to be heavily favouring the German corporations. The world politics, immigration crisis in the EU, rising unemployment and a sluggish global trade impacting GDP growth would require government leaders use unconventional monetary and fiscal measures. All of which would further lead to more taxes and more intrusive powers to the state at the cost of individuals’ personal liberty and freedom.

Bail-in, not Bail-out by BanksWhat politicians say, what they mean and what they do need not be in congruence. The new year will provide ample proof for the same. For 8 years since 2008, human race were fed the belief that central banks would send helicopters to drop money, supposedly to stimulate growth. But Mr Modi sent vacuum cleaners to suck notes out of people’s pockets.

So far, people have come to believe that the government bails the banks out and comes to support whenever

banks are in need of capital which periodically gets eroded due to corporate loan defaults. Never be surprised, this time round, the government will tell the banks to go for “bail-in” since “bail-out” is against the tax-payers who are in effect bank depositors. The “bail-in” will typically involve adjusting loan losses with the depositors’ money. In simple terms, it will be the depositors who will take hair-cut, a pro-rata amount of deposits will be reduced, against adjustment of bad loans written off by banks. Be prepared for it because the government, a puppet in the hands of deep-state, believes that profits are private while losses are public.

Disruption will be the key-word and enter the mainstream thought process and lifestyle. Disruption in the way people think and do things. Disruption in the way things worked would begin the end. It will be the beginning of the end how things worked. No longer they will work according to known maxims. We will have to discover new ways to deal with the old as well as new problems and new risks. The most effective protection in the year of fear is to arm yourself with knowledge.

The year 2017 has similarity to earlier dreadful years of 1921, 1933, 1945 as this also is the year of the Rooster according to the Chinese calendar. The Rooster is the tenth in the Chinese zodiac and starts on 28th January, 2017 ending on 15th February, 2018.

Governments around the world have no compunction about conspiring against their citizens,” says Mr James Rickards in his latest book The Road To Ruin.

year-on-year % returns in Nifty-50 index

month Nifty close % change over year

Dec 2016 8185.80 3.01

Dec 2015 7946.35 –4.06

Dec 2014 8282.70 31.39

Dec 2013 6304.00 6.76

Dec 2012 5905.10 27.70

Dec 2011 4624.30 –24.62

Dec 2010 6134.50 17.95

Worth taking a chance?

average annual return 8.30%(Source: NSE)


MARKETS COVER STORY

global socio-Political storm BrewingThe u.s. Fed under scannerPresident-elect Donald Trump’s loud disapproval of the Fed might prove to be a potential attack on the central bank’s independence. There is a possibility of radical changes, including altering the Fed’s inflation-targeting basis. And not to forget the fact that Trump has “expressed sympathy” for returning to a gold standard.

Little sign of Improvement in Russian Economy Russia is one of the world’s top oil producers, but the energy sector has suffered numerous layoffs. Its GDP failed to improve as lower oil prices and Western sanctions hamper growth. Oil prices increased in the past year, but not enough for Russia to secure economic prosperity. The ruble strengthened to over 60% compared to the dollar, but has failed to enhance the economy thus far. Russia’s problem, not only lies with lower oil prices and persistent Western sanctions over Crimea, but the Chinese slowdown as well. China’s economic setbacks have dampened Putin’s efforts to strengthen his economy using Beijing. However, despite Putin’s troubles, he is projected to win the 2018 presidential election. Also, Russia might become militarily aggressive in Eastern Europe. The risk could emerge amid the potential for changes in U.S. foreign policy, potential sanctions renewal and upcoming major European elections.

australia in Danger of credit Downgrade from s&PAustralia, which presently enjoys a AAA rating, received a warning from Standard & Poor’s (S&P) that it is on downgrade watch. The downgrade warning signals that

Australia will likely soon receive a reduced rating. If it occurs, it would be the first downgrade of the nation’s credit since the late 1980s. Although less damaging than an actual downgrade, S&P did put the nation’s rating on a “negative” outlook, moving it from “stable.” A major point of concern for S&P remains Australia’s offshore debt levels. The agency feels that Australia is allowing its debts to become far too high to continue to justify the top rating of AAA.

Emerging market WeaknessAccording to the MSCI Emerging Markets Index emerging market equities are nearly 20% down from their late-2015 highs, and are over 32% down from their 2015 height. At the same time, the U.S. Dollar (USD) is up 6.3% from its lowest point in the last year, which was exactly a year ago. The weakness, partly reflects a fear that a lack of liquidity will hurt emerging markets. Foreign investors are less eager to invest in these markets due to the strengthening dollar, providing limited capital access for firms. Additionally, dollar-denominated bonds in emerging markets are placing pressure on the firms’ balance sheets. Leaders of the IMF and the World Bank are discussing how they can help companies in emerging markets facing high recessionary conditions, such as in Brazil and Venezuela, falling foreign investment and foreign capital inflows, as in central Asia and Latin America, or falling growth rates, as in China and Asia. According to a report both bodies will make a $4 billion emergency loan package available to weak corporations in emerging markets, but the actual loans required are much higher.

Default rates in emerging markets are only going to expand, as they have done over the past 18 months.

Increasing youth activism There has been a wave of youth activism in East Asian politics: Taiwan’s Sunflower Student Movement in 2014, South Korean 2015 street protests against President Park’s new labour law, and protests in Japan in 2015 against Prime Minister Abe’s security bills. Facing challenges in a stagnating economy, the younger generations have developed a deeper political awareness from a sense of marginalisation from political decision-making processes. Last year in Japan a hard-hitting political phrase, Nihon shine — ‘Go to hell, Japan’ — went viral. The phrase originated from a blog post by an anonymous working mother decrying the fact that her one-year-old child had been denied a place at nursery school — ‘My child was denied enrollment in nursery school, go to hell Japan’. The now-popular phrase crystallised the underlying frustration. Political leaders and governments across Asia will be tested more by how they respond to online activism, rather than activism on the streets.


MARKETS COVER STORY

The market indicator, cyclically adjusted P/E (CAPE), a

valuation measure created by economist Robert Shiller has hit extreme levels last seen before plunges in 1929, 2000 and 2008. The P/E (CAPE) now stands over 27 and has been exceeded only in the 1929, the 2000 tech mania and the 2007 housing and stock bubble. He won the Nobel Prize in economics in 2013 for his work on stock market inefficiency and valuations. Many Wall Street strategists are increasingly worried about this widely followed valuation measure that’s reached levels that preceded most of the major market crashes of the last 100 years. The Shiller “cyclically adjusted price-to-earnings ratio” (CAPE) is calculated using price divided by the index’s average historical 10-year earnings,

Market indicators predict a repeat of 1929, 2000 and 2008shiller caPE Ratio chart

(Source: Multpl.com )

1890 1900 ‘10 ‘20 ‘30 ‘40 ‘50 ‘60 ‘70 ‘80 ‘90 2000 ‘10

45

40

35

30

25

20

15

10

5

0

Black Tuesday

Black monday

27.74

adjusted for inflation. Shiller’s research found future 10-year stock market returns were negatively correlated to high CAPE ratio readings on a relative basis. Even based on the more common price-earnings ratio, the market looks

rich. The S&P 500’s P/E based on the earnings of the last 12 months is 18.9, the highest in more than 12 years, according to FactSet. Certainly, based on the Shiller PE, the equity market seems dangerously expensive.

We all know that in stock market timing is the most crucial factor. Planetary positions not only affect

nature, but also human life. Astrologically, based on planetary position, certain sectors perform very well, whereas some do very badly.

For 2017, Planetary positions suggest that in February market will perform very well. Metals, silver and chemicals will have a good run. Any product coming out of the earth like crude oil and the refineries will suddenly spurt, so stocks related to these will give better results. On 28th March 2017 the new Samvat will start and the planetary position at that time indicate a very beneficial year ahead for the investors. So the bull market that we shall see in February will continue in March also. In April too, it will continue, but midway the market condition will change to negative and caution is indicated. In the first 15 days in the month of April as well as May the market may find great volatility. Investors should be very cautious during this period. The market will change its track from volatility to a better track on 11th or 12th May. Planetary positions indicate

shri Vijay kumar ‘Divya’Well-known market expert and astrologer by profession; his fortnightly market predictions based on astrological calculations in Dalal Street Investment Journal, was well appreciated; came into limelight when he predicted the 2008 fall and subsequent uprise the few years later. He can be contacted at [email protected] or 09410051251

The market will not have a smooth run

the start of a bull run, which will last until June end. In the early July the market will slowly come to a stagnant position and the market turnover will see a drastic fall. Again in the second week of August the market activity will increase due to several factors, but it will be confined to just one week and the third week will not be very good. Investors are advised to stay away or reduce their positions in September and October as a very drastic negative move is indicated which will continue until the first week of November. Second half of November will again find the markets regaining its lost glory which will continue up to December end.


ASTRO VIEW

MARKETS COVER STORY

Prabhat mittalThe author is a well-known Bhopal based technical analyst. He was associated with the leading market magazine Dalal Street Investment Journal for almost a decade where he wrote a regular column. He is a SEBI registered Research Analyst.

Year 2017, only for Smart Investors

AS usual this is the month when we’re asked “what is your view of the market for the whole year?

Frankly, it’s very difficult to answer this question for any analyst, especially a technical analyst. And every year without fail, I have noticed the same trend - some of us are very bullish and some much bearish. This year again, absolutely no exception: so there are many predicting about 10000 Nifty and there are equally many predicting 6000 Nifty. So what a common investor should take home? “Is kashmakash me Niveshak kya Karen.”

Before we start discussing what the future holds for all of us, let us look back. Let us focus on Nifty chart. After experiencing one of the biggest panics in the year 2008 Nifty took almost two years to very slowly getting on the way to fill the huge gap and then again we saw the market consolidating for another three years. Finally, in March 2014, we saw a breakout. Nifty somehow succeeded to break 2008-2014 important resistance. (See the red line on chart). After this breakout Nifty crossed 9000 in just one year, followed by a broad based rally. It was amazing to see a weak market after making a high of 9119 on March 04, 2015. After this high Nifty regularly made lower highs, lower lows and in next one year it made a low of 6825 in February 2016. After making this low level beyond anyone’s expectation, Nifty had shown a sharp upmove and finally made a high of 8968 on Sep 2016.

It indicates that we’re neither in a bull market nor in a bear market. As we are going down again from 9000, why not wait for 7000-7200 in a side base market. In this kind of market investors need to be very careful. Better to invest in corrections in good companies which are performing well on the charts. So try to be a smart investor, if you can’t take help of an expert. In 2017,

Nifty

I am expecting 7200 to 9000 Nifty range. So certainly, I will wait for 7200 to re-enter and take the Nifty position.

Here are some stocks which look good to me and investors can put their money to get a reasonable return in the year 2017. However, they are advised to follow very strictly the entry level as well as the stop loss.

L&T Finance Holdings Ltd.L&T Finance is one of the best performing stocks of year 2016. After making a high of 97 in the year 2012 stock got corrected and made a low of 52.65 on August 2013. After making this low, the stock was range bound for two years between Rs 60-80 and finally in early 2016 when there was extreme panic in the markets it made a bottom of 48.25 and broke its low of 52.65 made on August 2016. In 2016 Market rally the stock outperformed the market and made a high of 109 in October 2016. One can accumulate this stock between 80 to 83 with strict stop loss of 60 for the target of Rs 150 plus.

century Textiles & Industries Ltd. In year 2013 Century Textiles & Industries was trading at 200 and after that it is continuously showing strength on charts and making higher highs and higher lows regularly. If we compare it with Nifty charts, it is an outperforming stock and in the Nifty rally from 5300 to 9000 this stock gave a return of more than four times to investors. After that when the market came down from 9000 to 6800 level, the stock got corrected to Rs 425. When Nifty again took a resistance near 9000, this stock again showed its strength and crossed its previous high of 793 made on 13 April 2015 and finally on November 01, 2016 this stock made high of 1038. As of now the market is in correction mode and one can buy it in the range of 670 to 700 with strict stop loss of 570 for the target of 1200 plus.

asian Paints Ltd. The company is engaged in the business of manufacturing, selling and distribution of paints, coatings, and products related to home décor. It is India’s largest and Asia’s third largest paints corporation. Asian Paints Ltd. has been one of the best performers in the

8,260.3


MARKETS TECHNICAL VIEW

(Disclaimer: The views expressed here are the author’s personal. He can be reached www.prabhatmittal.com)

L&T Finance Holdings Ltd.

asian Paints Ltd.

century Textiles & Industries Ltd.

Idea cellular Ltd.

second half of 2016. If we look at its chart, we find that the stock was taking resistance at 900 levels from August 2015 to May 2016 and also made higher lows in this period. In 2016 rally of 2000 Nifty points it had shown a great strength and crossed 1200 levels in October 2016. In the current market correction stock corrected from 1200 to 850. On long term charts 750 to 850 looks important support zone for the stock. One can accumulate this stock for one to two years at 750 to 850 levels with strict stop loss of 600 for the target of 1500.

Idea cellular Ltd. Idea Cellular Ltd. is a pan-India integrated GSM operator offering 2G, 3G and 4G mobile services. The third largest mobile operator by subscriber base. If we look at Idea Cellular chart, the stock was very weak and continuously

making lower tops and lower bottom from 2015 to Nov 2016. The stock was trading above 200 in April 2015 and in November 2016 it was trading at 65 only. This was really surprising as the market was good in the second half of 2016. The stock made a two year low in November 2016. If we see its chart of the last two months, there is another surprise as when Nifty was trading near 8950 in Sep 2016 this stock was trading at its low and in weak markets stock is showing strength near 65 to 68. I think the negative news took this stock to undervaluation. One can accumulate it near 60-65 levels with strict stop loss of 50 for the Target of 120 & 150 for one to two years.

Wish you all a Happy and Prosperous New year.

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989.521

92.3685


MARKETS TECHNICAL VIEW

The year 2016 was an eventful year in the stock market. The year began with vague fears over China, where growth rate was supposed to be lower than expected. Then June’s surprising Brexit vote sent stocks tumbling,

drove the British pound to a generational low and had interest rates plummeting to record lows around the world. And then the US election surprised markets, which later also brought the famously ‘Trump rally’ just as there was a ‘Narendra Modi rally before, during and after the elections. It came at the year-end and at last the dust was settled. Indian markets closed handsomely, S&P 500 finished the year up about 10% and the Dow Jones Industrial Average gained about 14%.

BsE gets sebi’s clearance for IPoBSE Ltd has received Sebi’s go-ahead for its initial public offering (IPO). The issue size is estimated to be Rs1,200-1,300 crore. In 2010, when billionaire financier George Soros bought a 3.9% stake in BSE for about Rs160 crore from the Dubai Financial Group, the exchange was valued at around Rs 4,000 crore. The issue represents 27.43% of BSE’s pre-share sale capital. Individual shareholders, mainly brokers and trading members, hold 56.83% in BSE. The rest is held by institutional holders such as the LIC, State Bank of India and Bajaj Holdings, besides the foreign bourses. Some of the existing shareholders intend to sell 29.96 million shares through the offer for sale route. The draft document submitted to Sebi listed 262 shareholders who have agreed to sell their shares. Singapore Exchange Ltd (SGX) will sell 4.7% stake, making a complete exit from BSE. Currently, the Multi Commodity Exchange of India Ltd is the only listed bourse in the country. National Stock Exchange of India Ltd (NSE) too filed DRHP with the regulator. Existing investors of the NSE are looking to dilute 22.5% stake through the IPO, which could be as large as Rs10,000 crore.

GTPL Hathway files papers for IPOHathway Cable & Datacom Ltd’s subsidiary GTPL Hathway Pvt. Ltd has filed its initial public offering (IPO) prospectus with the capital market regulator. GTPL Hathway offers cable TV and broadband services in several cities, including Pune, Ahmedabad and Kolkata. According to the draft prospectus, the IPO will consist of both a primary offer, to help the company raise capital, and an offer for sale by the promoters. The company is looking to raise Rs 300 crore through the primary offer. It will use the proceeds to reduce debt.

SBI merger only in next financial yearThe mega merger of State Bank of India’ five associate banks and the Bharatiya Mahila Bank could be pushed

to the next financial year as it is still awaiting the government notification on the move. The merger would make SBI a global-sized bank and it would be amongst the top 50 lenders in the world (45th position in terms of asset size), with an asset base of Rs 37 trillion, with 22,500 branches and over 58,000 ATMs and more than 50 crore customers. Post the merger of five associate banks and the Bharatiya Mahila Bank, the government’s stake in the bank would stand at around 59%.

The bank had announced the merger in May and its central board of directors had in August approved the process along with the share swap ratio for three of the listed associate banks and Bharatiya Mahila Bank. At that time it was announced that the merger would be completed by end March 2017. SBI has three listed associate banks: State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT) and two unlisted associate banks: State Bank of Patiala and State Bank of Hyderabad. As per the swap ratio, SBBJ shareholders would get 28 shares of SBI (Rs 1 each) for every 10 shares (Rs10 each). Similarly, SBM and SBT shareholders would get 22 shares of SBI for every 10 shares.

Equity mutual funds inflow hit 18-month high Equity mutual fund saw an inflow of more than Rs 10,000 crore in December, making it the highest in 18 months. This also marks the ninth straight month of positive inflow in equity schemes. Prior to that, such funds had witnessed a pullout of Rs 1,370 crore in March. According to data from AMFI, equity funds, which also include equity-linked saving schemes (ELSS), registered a net inflow of Rs 10,103 crore last month. This is the highest net inflow since June 2015, when equity MFs racked up an inflow of Rs 12,273 crore. In November, the net inflow stood at Rs 9,079 crore. With the latest inflow, total mobilisation in equity schemes has reached close to Rs 51,000 crore in April-December of the current financial year. The robust inflow has pushed

Investing should be more like watching paint dry or grass grow. If you want excitement take $800 and go to Las Vegas.” – Paul samuelson

The year 2016 was an eventful year


MARKETS ON THE STREET

According to Prime Database, while in 2015, 21 companies raised Rs 13,614.08 crore, year 2016 saw 26 companies raise Rs 26,493.8 crore through the IPO route. So far a total 17 IPOs have received approval from the Securities and Exchange Board of India to hit the market in 2017.

up assets under management (AUM) of equity MFs to Rs 4.7 lakh crore at the end of December, from Rs 4 lakh crore in April-end.

automobile sales badly hit Automobile sales in November declined for the first time in 11 months as the government’s decision to ban high-value banknotes hurt demand. Hero MotoCorp reported a 33.91 % dip in its total sales in December 2016 at 3,30,202 units as against 4,99,665 units in the same month previous year. The company reported a 33.91 % dip in its total sales. It recorded its highest-ever sales in a calendar year in 2016 with a record 67,62,980 units of two-wheelers in January-December 2016 period. It translated into a growth of 4.3% over the previous calendar year.

Bajaj Auto reported a 22% decline in total sales in December at 2,25,529 units as against 2,89,003 units during the same month a year ago. Motorcycle sales during the month decreased by 18% to 2,03,312 units from 2,47,782 units in the same month in 2015. Its commercial vehicle sales stood at 22,217 units during the month under review as compared to 41,221 units in the year-ago period, down 46%. Further, the exports were at 1,05,804 units as against 1,45,477 units in December 2015, down 27%. In December Maruti’s deliveries in the local market slipped 4% to 106,414 units as sales of its entry-level models, including the Wagon R and Alto, dropped 15.3% to 31,527 units from a year ago. Sales of compact car models, including the Swift, Baleno, Dzire and Ritz, fell 8.6% to 43,295 units. Maruti’s overall passenger car sales (excluding utility vehicles such as the Ertiga and Brezza) dropped 10.9%. Sales at Hyundai dropped 4.3% to 40,057 units from 41,861 units a year ago. Hyundai ended the calendar year with sales of 500,537 units, up 5.2% over the previous year.

Bharti airtel to buy Telenor’s India business Bharti Airtel is in discussion with Telenor for the acquisition of its India business for $350 million. Bharti Airtel is likely to take over half of Telenor India’s liabilities, while the latter is expected to bear the remaining half of its India liabilities. Telenor has been reportedly looking to exit India, having been pushed into a corner, thanks to its limited data spectrum holdings and its presence in only a few pockets.

IndusInd Bank Q3 net profit risesIndusInd Bank’s net profit for the third quarter rose 29.19% due to higher net interest income and other

income. Net profit for the quarter stood at Rs 750.64 crore as compared to Rs581.02 crore a year ago. Net interest income (NII) increased 34.51% to Rs 1,578.42 crore from Rs 1,173.42 crore last year. Other income increased to Rs 1016.80 crore from Rs 839 crore in the same period last year, a rise of 21.19%. Gross NPAs rose 8.08% to Rs 971.62 crore at the end of the December quarter from Rs 899.01 crore in the June quarter. On year-on-year basis it jumped 42.65% from Rs 681.13 crore. As a percentage of total loans, gross NPAs stood at 0.94% at the end of the December quarter as compared to 0.9% in the previous quarter and 0.82% in the year ago quarter. Net NPAs were at 0.39% in the December quarter compared to 0.37% in the previous quarter and 0.33% in the same quarter last year. The bank witnessed a strong growth in deposits during the third quarter with Current and Savings accounts (Casa) rising to 37% from 34% earlier. The banks’ margins remained stable at 4%.

Suzlon set to raise Rs 800 crore from PE firms Suzlon Energy Ltd is set to raise Rs800 crore from private equity investors Asia Climate Partners (ACP) and Olympus Capital Asia to create a renewable energy platform. Suzlon has been in talks with investors to create an independent platform to invest in and to acquire renewable assets.

government’s 26% strategic stake sale in BEmL The government will sell 26 per cent stake in BEML, making it the first major PSU to be sold through strategic disinvestment. The cabinet has given an approval for strategic disinvestment of 26 per cent equity shares out of the government’s shareholding of 54.03 per cent. At the current market price it could fetch the exchequer over Rs 1,000 crore. After the strategic sale, government stake in the PSU would come down to 28.03 per cent.

The government is targeting Rs 56,500 crore in disinvestment proceeds this fiscal. Of this, Rs 36,000 crore is to come from minority stake sale in PSUs and another Rs 20,500 crore from strategic stake sale. Established in May 1964, BEML operates on three major business verticals for associated equipment manufacturing — mining and construction, rail and metro and defence and aerospace. The PSU, under the administrative control of the defense ministry, provides equipment support to the Indian Army and other defence forces by manufacturing variants of Tatra vehicle for all terrain operations.


MARKETS ON THE STREET

Total individual wealth in India 2016 Individual Wealth – India Vs World

asset Type

Fy16 amount (` crore)

Fy15 amount (` crore)

Proportion yoy change %

Financial Assets

1,72,02,099 1,60,55,687 56.53% 7.14%

Physical Assets

1,32,26,839 1,19,89,286 43.47% 10.32%

Total 3,04,28,938 2,80,44,973 100.00% 8.50%

asset class India global

Debt (Including Cash)

43.1 42

Equity 13 25

Real Estate 18.2 18

Alternate Assets 25.7 16

Total 100 100

karvy’s India Wealth Report 2016

Individual wealth in India is in line with global proportions

The much awaited India Wealth Report 2016 (the 7th edition)

prepared by KARVY Private Wealth, has come out with some startling facts. The Report provides an overall perspective of the wealth held by individual in India and the expected pattern of future investments. The report concludes that in assets like debt and real estate, individual wealth in India is in line with global proportions, while in equity and alternate assets, the position is opposite to global proportions.

According to the report in FY16, total wealth held by individuals in India has grown by 8.5% to Rs 304 lakh crore and it predicts that the overall individual wealth is expected to grow to Rs 558 lakh crore at a CAGR of 12.90% over the next 5 years. However, total individual wealth in financial assets grew by only 7.14% to Rs 172 lakh crore in FY16, much slower than in FY15 when wealth had grown nearly 19% mainly dampened by the bleak performance of direct equities. Karvy predicts that financial assets are expected to grow at a faster pace of 14.73% CAGR, nearly doubling in the next 5 years.

On the same line individual

wealth in physical assets stood at Rs 132 lakh crore, having grown 10.32% in FY16 compared to a 2% decline in FY15. Individual wealth in Gold stands at Rs 65.90 lakh crore having almost half the share of physical assets, whereas wealth in real estate (excluding primary residences) come in second at Rs 55.47 lakh crore. FY16 witnessed stupendous growth in alternate asset classes at 84.70% vis-à-vis FY15. Karvy predicts the growth to continue in the next 5 years, although at a slightly slower pace. Ducking the trend of a fall in equity markets, wealth held in Mutual Funds grew by 13% indicating a clear preference of investors moving towards professional management of wealth.

While releasing the report, Mr. Abhijit Bhave, CEO – KARVY Private Wealth said that the Indian economy is in for some stormy changes in the short term amid events such as demonetization, Donald Trump’s victory and the possible fed rate hike. However, the India growth story remains intact in the long term.

According t the report global private financial wealth grew by nearly 5.2% in 2015 to reach a total of $168 trillion (approx. Rs 11,250

lakh crore), out of which Asia-Pacific accounted for $37 trillion (approx. Rs 2,500 lakh crore). While India is considered the bright spot among emerging economies, in the short term the economy is bound to slow a bit, given the government’s recent efforts to demonetise old, high-value notes. The victory of Donald Trump in the US presidential elections is also likely to result in some bumps in the road ahead for global markets and accordingly to the Indian market. However, in the long run, India is expected to outshine its emerging market peers, including China, owing to changing positive dynamics, especially the government’s reforms push the Goods & Services Tax (GST), Real Estate (Regulation and Development) Act and the Bankruptcy Code, among others.

The report says that even demonetisation will have a long-term positive impact, as more wealth enters the formal financial system. Thus, savings bank deposits, fixed deposits and small savings schemes are expected to be most sought after investment avenues even for the next year and in the long run, this wealth will eventually find its way into asset


MARKETS REPORT

Classification of Individual Wealth in India based on Financial Asset

Classification of Individual Wealth in India in Physical Assets

assets Fy16 (` crore) Fy15 (` crore) yoy change % Proportion

Fixed Deposits & Bonds 36,81,658 33,26,429 10.68% 21.40%

Direct Equity 29,63,883 34,39,861 –13.84% 17.23%

Insurance 25,47,564 23,59,790 7.96% 14.81%

Savings Deposits 21,59,478 19,90,249 8.50% 12.55%

Cash 16,63,432 14,48,320 14.85% 9.67%

Provident Fund 11,51,027 9,24,026 24.57% 6.69%

NRI Deposits 8,26,727 7,20,997 14.66% 4.81%

Small Savings 6,58,596 5,78,990 13.75% 3.83%

Mutual Fund 6,23,825 5,52,325 12.95% 3.63%

Current Deposits 4,37,262 3,42,785 27.56% 2.54%

Pension Fund 3,92,682 3,15,915 24.30% 2.28%

Alternate Assets 77,503 41,960 84.71% 0.45%

International Assets 18,462 14,040 31.50% 0.11%

Total Financial assets 1,72,02,099 1,60,55,687 7.14% 100.00%

assets Fy16 (` crore)

Fy15 (` crore)

yoy change %

Proportion

Gold 65,90,575 57,15,605 15.31% 49.83%

Real Estate 55,47,254 52,85,577 4.95% 41.94%

Diamond 8,02,840 7,98,934 0.49% 6.07%

Silver 2,01,170 1,84,472 9.05% 1.52%

Platinum 6,452 4,698 37.34% 0.05%

Other Gems & Jewellery

78,548 – – 0.59%

Total Physical assets

1,32,26,839 1,19,89,286 10.32% 100%

classes such as equities, mutual funds, etc. On the other hand, the proportion of investments in physical assets such as gold and real estate will reduce. In FY16, Fixed deposits and Bonds reversed positions with direct equity to become the most preferred financial asset. Insurance retained the third spot, while all other classes gained marginally over FY15.

According to the report the government’s effort to demonetise old, high-value notes will ensure that wealth in some idle non producing assets to the tune of Rs 14 lakh crore will move into the formal financial system by way of bank deposits. In the long run, these non producing assets will move to producing assets and some of this will be invested in financial assets such as equities and mutual funds.

Individual Wealth in physical assets stood at Rs 132 lakh crore, having grown 10.32% in FY16 compared with a 2% decline in FY15. Individual wealth in gold stands at Rs 65.90 crore having

almost half the share, whereas wealth in real estate (excluding primary residences) come in second at Rs 55.47 lakh crore. Gold and real estate together form nearly 92% of the physical wealth in India.

The report has some good words for the future also like it says that by FY21, overall individual wealth in India is expected to grow to Rs 558 lakh crore, at a CAGR of 12.90%. Financial assets are expected to grow at a faster pace of 14.73% CAGR to nearly double in

this period. Direct equity is expected to grow at more than 20% CAGR over the next 5 years. It is expected to regain its position as the most preferred asset among financial assets. For HNIs, alternate asset classes such as private equity funds and venture capital funds will continue to hold interest. Along the journey for a ‘less-cash’ economy, HNIs may also be attracted to options such as Bitcoins, once the regulatory picture is clearer in India.


MARKETS REPORT

LEISURE LIFE

LEIS

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mcDonald’s creator in movie ‘Founder’“The Founder,” set to be released this month, stars Michael Keaton as Ray Kroc, the man widely considered McDonald’s creator. He opened the first franchised McDonald’s restaurant in 1955. More than six decades and 36,000 restaurants later, moviegoers will get a chance to see a dramatized version of the burger giant’s beginning, and a portrayal of a complicated, driven salesman-turned-self-proclaimed founder. Kroc is considered a symbol of the American dream. Kroc, an Oak Park native, was a 52-year-old milkshake machine salesman when he first encountered McDonald’s, opened by two brothers, Richard and Maurice McDonald, in California. Kroc inked a deal with the brothers to open a franchise in 1955. Within eight years, it had 500 restaurants. Today it has 14,000 U.S. locations and 22,000 more around the globe. Later the McDonald brothers and their descendants said Kroc swindled them, eventually squeezing them out of the business.

In the us, more white people are now dying than being born

According to a research report released by the University of New Hampshire in almost one-third of US states, more white people are now dying than being born. It says 17 states - home to roughly 38% of the country’s population - had more deaths than births among non-Hispanic whites in 2014, up from just four states a decade earlier. Nationally, the ratio is much higher for minority groups, particularly among Latinos, whose rate is 5.4 births for every death. The ratio for blacks is 1.94 births for every death, and for Asians, it is 1.75 births. The number of white women between 15 and 44 decreased by 4.7 million, or 12%, in the United States between 2000 and 2014.

Now a shirt that connects with your smartphoneProminent clothing brands, Arrow, has come up with an innovative wearable shirt. With its Smart Shirts, one can share his business cards and social media profiles. The list of things that Smart Shirt can do is long: Opens your favourite app with just a tap on the shirt; Want to share your LinkedIn profile with a colleague? All you need to do is tap their phone on your shirt’s cuff to have your profile open on their smartphone. In the same way, it lets you share your Facebook profile in just a tap away. Tap the phone on shirt’s sleeves to get your e-business card on the other’s smartphone; Set the meeting mode to stay away from disturbances during important meetings. The Smart Shirt is enabled with NFC chip in one of its cuffs that ensures a connectivity between Smart Shirt and the phone.

Indians everywhere in every fieldAn Indian woman in Britain gave birth to the country’s first baby of 2017 at 12.01 a.m., just a minute into the New Year. Bharti Devi, 35, gave birth to baby girl Ellina Kumari just seconds after the Big Ben on the Westminster stopped chiming. The mother-of-two arrived at City Hospital in Birmingham on December 31 and was induced later in the evening. The couple is from Handsworth in Birmingham.


News, Views & Lies in Between

actors attract fans and anchors fascinate followers on the news hour television and twitter, depending upon how well they make a show to impress the

viewers and their minds. Actors’ contract amount depends upon how many tickets the show sells or the sales volume of a product endorsed. Likewise, public speaking fees paid to “celebrities” vary with the position held by them and the hype he/she is able to create around the new hypothesis being propagated be it in social affairs, politics, environment, economics and foreign policy. A Clinton, a Greenspan, and a Musharraf are rated on a different scale and paid royally than a Tom, Dick

and Harry on television.To be heard (and seen) they gotta be in

circulation. The more they appear on television, the more popular they become according to manufactured TRPs, and with the increase in popularity get more in speaking fees. The key is to somehow get the first few appearances either by talent or by bribe. Sometimes, they get their larger-than-life-size cut-outs and splash them on the roadside hoardings. For days, you keep staring them every time you pass by, come rain or shine, and they form an impression in your mind.

Actors advertise products no matter good or bad for people’s health while “celebrity” speakers propagate views this way or that, for the money, though both, in their private life, may not even consume the product publicized or subscribe to the views and opinions peddled to the public at large. But nonetheless, they do it impressively and very intelligently for most love money more than morals, (about which who cares anyway!). To look attractive and to advance one’s career or mating prospects, people these days work out on physique

as also the teeth and spend a fortune on undergarments but hardly on morals.

No one gets a fat bag in speaking fees for saying that the earth revolves around the sun. If a physicist can convincingly say that neither the earth revolves nor the sun rotates but it’s the crooked clock machine that makes our time move from minutes to hours and days, he will get a sack of dead presidents’ bills in honorarium, plus of course a world renowned citation which he can hang around his neck every time he is on television. The columnists and news anchors, mostly drunk and delusional, love such characters and are always too eager, rather ordered by the media owners, to lavishly plop them on newsprint and across television channels to make them famous as a hero. Advertisers often have “private treaties” with news publishers and barter influence over editorial matters.

There essentially is no difference between advertising products for money and peddling opinions on various subjects for public speaking fees. Don’t believe the actors and anchors because they are paid to do whatever on television.

In the present world of information deluge and intensely increasing delusions, preaching has become more important than practice in public life. Somehow we have come to believe that what we say in public is more important than what we do in private because it’s none of the business of “others” to meddle in the private lives of the celebrities and also because of our assumption that no one would see despite all religious teachings maintaining that nothing remains hidden from the watchful eyes of the omnipotent and omnipresent God. When a President dangles with a young lady intern, the nation doesn’t bother as long as the newspapers keep saying that the economy is growing and the buck rising.

The press has moved on from disseminator of news to destroyer of information. We have too much of information, sponsored by vested

There is no difference between advertising products and peddling opinions in the press or on television because they are paid to. Media barons’ business models and the belief that the society will continue to produce a similar response always and ever is terribly misplaced.

ashok JainaniMarket Strategist, Author of well acclaimed book “Market Myths” and our Consulting Editor

Roman Emperor Marcus Aurelius (born: 26 April, 121 AD; died: 17 March, 180 AD) said “Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.”


COLUMN THIRD POINT

interests, than we know what to do with. Further, due to our own prejudices and biases fueled by half-truths and full lies broadcast day and night, we perceive the information selectively, subjectively and without much self-regard for the distortions this causes.

Newsmen face real occupational hazard every day on two counts: Content and Quantity. Content for news called editorial and content for money called advertisements because newsprint space and satellite channel time is exorbitantly expensive compared to the price of real estate in cities around the world. As regards quantity, because of constraints of space and time, and of course the perennial manpower; they can’t carry all the news happening around the world in a single edition. So they use conjunctions and prepositions to connect sentences which, very subtly, create lasting impressions in readers’ minds. “Mumbai stocks climb most on heavy rains,” fooling people to believe that the stock prices and rains in Mumbai have an eternal cause-and-effect relationship. Kiss your editor for the power of preposition and of course jugglery of words.

Let this be clear, newspapers do not carry the news as it happens when it happens. Rather, they carry what the editors decide people should know on the day it is published. News is no longer the news as you hear, see or read it. It’s a ‘paste-up’ job on the paper and a ‘managed’ movie on the screen. It is the “mental impression” that your editor decides you should have on a given day.

God must love idiots, because He made damn so many of them. Thanks to the news, views and lies in between mixed by media.

But the days of the media unicorns are over. No longer will they be able to sway the public actions by ramble bumble opinions aimed at manipulating the minds of the masses. The swarms of social media will take over soon

that will be ever ready to offer yet another viewpoint and yet another aspect of truth. Thousand lies will be bared and buried by small pieces of truth popping up on WhatsApp and Facebook in every nook and corner.

What worked in the past is not a guarantee that it will work in the future. In fact, that should itself be a warning that it won’t because of the defining feature of the law of diminishing marginal returns. More and more of the same stimulus stops yielding more and more of the same results over time. In fact, after a prolonged usage, overdose produces counter results. Media barons’ business model based on the belief that the society will continue to produce a similar response always and ever is terribly misplaced. It won’t continue to work the way it did, regardless the fact that it had been, because it damn did for so many decades. Even a buffalo stops giving milk after a certain number of years.

Because the very nature of time is dynamic, times change and the change changes at an accelerated pace with time. In just about 225 years since Edmund Burke hailed the press as the Fourth Estate of democracy after the French Revolution, it has degenerated to earn a label of presstitute. This word has entered common vocabulary over the past few years and signifies deep rooted disappointment ordinary people perceive about the selective role played, and feel completely disillusioned, by the manipulative media. They can’t be trusted any longer the way they were two centuries ago. The media professionals are now come to be regarded as the second most dishonest after car and insurance sales persons. It’s time the masses re-mold media.

Propitiating money-bags with selling lies in order to fleece people of their intellectual freedom and swindle their votes and notes must stop. People Rise! Press, stop it must!!


Jud

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Lég

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Exéc

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In May 1789, Louis XVI summoned to Versailles a full meeting of the ‘Estates General’.The First Estate consisted of three hundred nobles.The Second Estate, three hundred clergy.The Third Estate, six hundred commoners.

Some years later, after the French Revolution, Edmund Burke, looking up at the Press Gallery of the House of Commons, said, “Yonder sits the Fourth Estate, and they are more important than them all.”

and 225 years later, propitiating money-bags with selling lies in order to fleece people of their intellectual freedom and swindle their votes and notes must stop.


COLUMN THIRD POINT

document useful to the person who keeps it, dull to the contemporary who reads it, invaluable to the student, centuries afterwards, who treasures it.”

It is true that once a diarist, always a diarist. The diary becomes an integral part, a part of the diarist’s routine. It has been observed that while many write entries daily, as if taking a bath, others let weeks and even months go by without so much as writing a few lines. Their number is more. The kind of time, whether good or bad, lucky or unfortunate, happy or sad too plays a big role. Some diarists write during times of a crisis - emotional or financial or when they have a health issue, others when they are very happy or have received something extra-ordinary.

This very idea that diaries are only worth keeping when some ‘events’ happen is arguably incorrect as the human life is such that there is always something happening at some level. Even the conditions around the diarist are in constant change. As such, it is always advisable to keep making entries on a regular basis. Likewise, some diarists keep a diary for diverse reasons and they end up making entries in numerous diaries. History books claim that born in London on 23 February 1633 Samuel Pepys was the first reported real diarist.

Scottish author, and best remembered as the creator of Peter Pan (a fairy play about an ageless boy and an ordinary girl named Wendy who have adventures in the fantasy setting of Neverland) JM Barrie said: “The life of every man is a diary in which he means to write one story, and writes another; and his humblest hour is when he compares the volume as it is with that he vowed to make it.”

An author and diplomat Sir Harold Nicolson, known for his diaries and letters, 1930-62, published in three volumes, which run to some three million words, wrote in his diary on 31st December 1931: “Of all my years this has been the most unfortunate. Everything has gone wrong…… I have been reckless and arrogant. I have been silly. I must be cautious and more serious. I must not try to do so much, and must endeavour to do what I do with greater depth and application. I must avoid the superficial. Yet in spite of all this – what fun life is!”

Yes, what fun life is!A very happy new year to all our readers.

so the New Year with the month of January is making a big noise – a noise which is musical to some and to some it is just

another month. This is the time to replace our diaries and table calendar. Not many people keep diaries and journals, and to justify on their behalf American actress of the stage and screen, and known for her husky voice, outrageous personality, and devastating wit, Tallulah Bankhead says “only good girls keep diaries. Bad girls don’t have the time.” If we ignore the gender part of this

statement unarguably, the world is full of bad girls. Surprisingly, even the good ones who keep one are not very sure the very purpose of recording each day’s happenings and events.

Adrian Albert Mole, the fictional protagonist in a series of books by English author Sue Townsend on this account has this to say: “I have decided to

keep a full journal, in the hope that my life will perhaps seem more interesting when it is written down.” But Mary Jane “Mae” West, the American actress, singer, playwright, screenwriter, and whose entertainment career spanned seven decades, has gone to another level when she said that “I always say, keep a diary and someday it’ll keep you.”

Some of the most successful and influential people who with their sheer hard work and passion became a part of history kept detailed journals of their lives. Keeping a journal has great benefits. It is not only a permanent record for posterity, but also it acts as a cathartic release for the people writing them. Now, research has shown that writing can do wonders for the writer’s health – both physically as well as mentally. While writing one re-lives the events and process them without fear or stress. It’s indeed amazing how telling our own personal story can make a huge difference in our well being. With journal one can track record of mistakes and successes and this written record can come in handy later when one is feeling down.

It might be just a record keeper for a common man, but as Dame Ellen Terry, another stage actress who became the leading Shakespearean actress in Britain, says, “As a rule, the diary is a

krishna kumar mishra

keeping a Daily Journal


COLUMN SIDE SHOW

Living in The moment

Science and humanities are poles apart, well, that’s what we’re told right from the day when we’re supposed to select our education stream. But the writer and physicist Alan Lightman has the credit of having both – being the first ever known professor to receive a joint appointment in the sciences and humanities at the Massachusetts Institute of Technology in Cambridge. So I feel we can believe in him more than others. His 1992 bestseller “Einstein’s Dreams,” is a collection of short stories that explore the nature of time. In this book he has very clearly defined how humans experience seconds and centuries. Yes, days and months and years have different connotations when we look back.

In one of the short stories Alan Lightman writes: “In a cosmos where everything is temporary, the only thing that has meaning is the moment because in 50 years or 100 years or 200 years, there’s not going to be anything left. Not only nothing left of our bodies, but very little left of what we do as individuals.” Further, he explains: “It makes me pay attention more. I think we have a tendency to sleepwalk through various periods. You’re in the room, other people are in the room, and you’re thinking about something else, you’re not really there. That’s life, passing us by.” He doesn’t believe that the cosmos has any meaning, or even life has meaning. He writes: “I don’t believe in a universal or absolute meaning. I don’t think there’s common meaning we all strive for in our lives. I think each person has to decide what is meaningful to them, and then figure out how to live their life according to that meaning.”

And for that we have to live in the moment because only then we can fully utilize the short span of time that is at our disposal. Concentrating on the job in hand increases efficiency. Ancient philosophers and religious traditions have been emphasizing about the benefits of living in the moment. Living in the moment also termed mindfulness is at the root of Yoga, Taoism and Buddhism and it is considered to bring happiness. People who practice this are more empathetic, most secure and highly exuberant.

In 2010 some psychologists at Harvard University collected information on the thoughts and feelings of some people to find out how often they were focused on what they were doing, and what made them happier. Their report concluded that ‘reminiscing, thinking ahead or daydreaming tends to make people more miserable,’ not necessarily if they think about a bad experience; even when they are thinking about something pleasant still they are miserable.

Thankfully, in one way, only human beings have the ability to focus on things that aren’t happening right

now, allowing them to reflect on the past or anticipate and plan for the future. The mind is capable of imagining things that in fact might never occur. However, the other way this unique ability brings a lot of unhappiness as it’s always the easy way out to indulge in daydreaming rather than concentrating on the activities one is busy with. Twenty first century is the age of distraction. With multiple gizmos and information flood it’s very hard to live in the moment. But that’s the only way out.

Just think of it – 200 years, millions and even billions, of years, and we realize, how our lives really are short in the whole scheme of things. But however short our time is, we gotta fully utilise that because that’s what is important for us and even in that short span of time we can do wonders. Many before us on this planet have done and many are amongst us still doing. So no reason to doubt our capacities. We certainly have the power to alter whatever we wish to.

a poem that captured the mood of 2016 Three days after a gunman killed 49 people at the Pulse nightclub in Orlando, Maggie Smith’s poem, “Good Bones,” was published in Waxwing. A reader moved by the poem’s message posted a screenshot on Facebook, where a musician named Shira Erlichman read it and passed it along on Twitter. As the poem traveled across the Web, its celebrity endorsements got bigger. The poem seizes the mood and social-media accounts of so many people in the tumultuous year that was 2016. For my readers, here is the complete poem –

Life is short, though I keep this from my children.Life is short, and I’ve shortened minein a thousand delicious, ill-advised ways,a thousand deliciously ill-advised waysI’ll keep from my children. The world is at leastfifty percent terrible, and that’s a conservativeestimate, though I keep this from my children.For every bird there is a stone thrown at a bird.For every loved child, a child broken, bagged,sunk in a lake. Life is short and the worldis at least half terrible, and for every kindstranger, there is one who would break you,though I keep this from my children. I am tryingto sell them the world. Any decent realtor,walking you through a real shithole, chirps onabout good bones: This place could be beautiful,right? You could make this place beautiful.

Yes, we all must strive to make 2017 better than 2016; after all it is one number more than last year.

Follow him on Twitter @krishnakumishra


COLUMN SIDE SHOW

Published by Wisdom Tree, Today is my Favourite Day: unleashing the Power of optimism by Siddharth Shirole is a practical, sensitive and honest book, written straight from the heart by someone who has bounced back in life with his positive attitude.

santa Claus, also known round the globe as Father Christmas, is a myth, a fascinating and homely figure incorporating the medieval legend of St. Nicholas, the

protector of children and the poor.History speaks of St. Nicholas as a Bishop of

Myra in Lycia. The emperor Diocletian threw him behind bars for believing in Christ and not worshipping Goddess Diana. He remained in prison until Emperor Constantine ascended the throne and declared Christianity as the religion of the empire.

The new emperor not only released Nicholas but also made him Bishop. Like the Good Samaritan, the Bishop went about the country and the town to give a helping hand to the needy. An interesting story is told of Bishop Nicholas that made him dearer to children of all ages.

A poor widow had three little sons. With great difficulty she managed the means for their education and sent them to Athens to study. On their way they happened to stay in an inn. The innkeeper, an animal at heart, killed the boys and kept them in pickle jars. Bishop Nicholas, who came across the mourning widow took pity on her and brought the dead back to life. How did he manage it? Only through prayer.

Nicholas’ habit of helping people got him sainthood after his death. It is estimated that 400 churches all dedicated to St. Nicholas exist all the over the world. This patron saint of Russia is also a patron saint of merchants and sailors. Travellers pray to him for their protection against robbers. How did St. Nicholas become Santa Claus? Santa Claus is a name derived from Sinte Klass, a Dutch dialect form of St. Nicholas, the patron saint of children.

December 6, marked his feast in ancient times and was celebrated with great solemnity in British Cathedrals. St. Nicholas feast was also celebrated as Boy Bishop Day in England. It was a great occasion for boys, for a boy Bishop was elected on December 6 and his authority lasted till Holy Innocents Day on December 28. The boy was attired in Bishop’s robes

and with his friends dressed as priests went round the town blessing the people. The boy Bishop and the boy priests performed all the ceremonies except the mass. Though it was confined to the cathedral at the start, it gradually spread to almost all parishes. But King Henry VIII abolished such a practice in 1542, though Queen Mary revived it in 1552. The stubborn Queen Elizabeth put her foot down and abolished the practice once and for all.

The Boy Bishop Day however, survived long in Germany and on December 6, a person in the costume of a Bishop assembled children and distributed among them gifts, nuts, sweetmeats and other little presents. Of course, countries vary greatly in the way they act out these traditions. But most of them transferred the custom of present giving to Christmas Day.

While the Christmas gift-giving tradition began around two centuries after the three magi (wise men from the east) brought presents to the Mary’s boy child, Jesus Christ, the figure of Santa Claus did not emerge until the 18th century in Europe.

Different Nations have portrayed Santa, the giver of presents in their own style. His red upper garment and trousers were introduced in the late 19th century as a result of German and American influences. But the artist Thomas Nast was more responsible than any other for the modern image of Father Christmas. Nast portrayed Santa as a pot-bellied old man, friendly and jolly with white beard and moustache concealing his mouth. He is seen riding a reindeer-drawn sledge delivering gifts by dropping them down chimneys.

In many countries, children hang up stockings before going to bed on Christmas Eve expecting Father Christmas to fill them up with goodies and gifts. The Dutch children hang boxes in front of their houses for Santa to drop his gifts. Children everywhere dream of the gifts that Santa would bring them. And Santa too fulfills their desires.

In one of the five and twenty stories of King Vikramaditya and the Vetala, the Vetala poses a question to the king: “What is the best way to keep happiness?” to which the latter answers: “The best way to keep happiness is to give it away.”

That is also precisely the message of Santa Claus to children and adults.

Author can be reached at www.professorraja.com

P. RajaLives in Pondicherry. Widely published with 38 books in English and 14 in Tamil, contributed to Encyclopedia of Post-Colonial Literature in English (London), and wrote scripts for TV. A former Council Member of Sahitya Akademi, New Delhi. He edits Transfire, a literary quarterly.

The Best Way To Keep Happiness Is To Give It Away


COLUMN BOOKWORM’S BITE

a Portable P. Raja (Selected and introduced by Dr KV Raghupathi)

First edition 2016; Pages 341; Rs 995

Reliance Publishing House, New Delhi

Review by: A Vengada Soupraya Nayagar

a Book for PosterityWhen we read Prof P. Raja’s writings, we are reminded of

Virginia Woolf ’s observation on writers in general: “Every secret of a writer’s soul, every experience of his life, every quality of his mind, is written large in his works.” We have now the opportunity to browse through the gems of such a great writer of Pondicherry, who lives always surrounded by books and people who love him. Writing in different genres and about different content, he is acclaimed as a versatile writer. The long awaited dream of Prof P Raja’s readers to have glimpses of his writings in a single volume has realised in the form of this book, a collection of his selective literary works, neatly compiled by Dr KV Raghupathi, a noted poet and Professor of English.

The book is divided in four sections: short stories, poems, plays and essays (the e-interview with the author not to be ignored). Besides, he has written a scholarly elaborate introduction where he provides useful information on the biography of the writer and some planetary notes on his texts. Here, he paraphrases selected stories, poems and other works.

Anyone, who chooses to read the stories in this compendium, will really be rewarded with a broader vision of the genre. In his stories, P Raja narrates his childhood experiences such as attending the pyal school, plucking mangoes, learning to savour them with his“sharp white tool”. To any reader of his locality or similar remote place, his descriptions appear fantastic and cause reminiscence, by remembering the bygone memories of the distant past.

Most realistic, the narratives are deeply lyrical. At times he employs dreams, fantasies and myth to enhance the emotional impact. For example, the myths of Ahalya, Noah

and Bartruhari are dealt with some of his stories. Similarly, the author hosts even ghosts in two stories of this collection.

In selecting his characters, P Raja reveals his artistic sensibilities and his keen psychoanalyst’s eye. In one of his stories, he chooses his daughter Radhika. Here, we understand that a painful nostalgia for the lost days of childhood stirs beneath the surface of his fiction. Apart from his own childhood, he cares for his daughter’s and his grandson Ramana’s childhood.

While reading these stories, one would agree to what the editor says in his introduction: “Truth and sincerity in the narration are the two dominating elements of Raja’s stories. He handles the day-to-day incident of ordinary and familiar human life with dexterity and no pomp”. That is why, some of his stories sound like fables.

The next section houses, poems on different moments of life. Knowing that we can’t change what happens to us or around us, we can always

make the choice of our reaction to these events. His poems reflect his delighted mood and incessant positive attitude towards life. Some of his love poems are adult-rated, but still they are not adulterated.

The third section stands testimony to the creative skills of P Raja as a playwright. “Dharma’s dog” depicts the plight of human beings who ignore their meaningful purpose of their existence to be helpful to others. “The Choice” is a satirical play where the author describes how the members of royal community have their own calculations to conceal their illegal relationships and justify them to fool the innocent subjects. In the third one, a playlet entitled, “The Green Eyed Monster”, he presents how the famous Russian poet Alexander Pushkin fell prey to his jealousy over a French baron D’Anthes who is supposed to have courted his wife.

The final section consists of the author’s selected essays and articles. As the editor rightly points out in his introduction, Raja’s essays too prove that he is a “pure entertainer” – but an intellectual entertainer with a mission. In a variety of essays, he shares some delightful experiences and useful tips on writing and reading. Some of his articles pay tribute to his shapers like KD Sethna and to his intimate friend Marimouthou. One of his articles is dedicated to his devoted wife to whom he rightly owes for his laurels.

This fine collection, meticulously prepared and presented in lovely attire, offers insights into the art and process of fiction. This beautifully produced book is to be safeguarded for posterity and therefore deserves to be a part of every reader’s collection.(SA Vengada Soupraya Nayagar is a tri-lingual writer and translator with several published books. A Professor of French, he teaches in Tagore Govt. Arts College, Pondicherry.)


LEISURE BOOK REVIEW

In America, the digital divide is not just on economic and racial factors, it’s also age. Only 30% of Americans above the age of 65 have

a smart phone.

According to a global database of

disasters EM-DAT, on an average, floods in

India have caused nearly 800 deaths

directly and affected 9.5 million people

each year; the average yearly bill

has been almost $650 million.

When the earthquake occurred in Nepal in 2015, the total economic loss was around $6 billion – almost a third of the Nepalese GDP. Only an estimated $160 million of the loss (2.7% of the total loss) was insured. About 9000 people lost their lives.

According to a research report released by Precog, in the past two years a total of 127 deaths globally were caused due to reckless behaviour while clicking selfies. Of these, 76 occurred in India alone – the highest in the world.

The automobile sector contributes 7% to the country’s GDP, while accounting for

25% of the manufacturing GDP.

According to National Crime Records Bureau as many as 279 honour killing cases were registered in different parts of the country during 2014 and 2015.


LEISURE PEOPLE & PLACES

A report prepared by media agency Zenith, advertisers are expected to spend Rs6196 crore on digital media in 2017. This number is 30% higher than in 2016 and includes spends on banners, online video and social media.

A report prepared by media agency Zenith, companies, political establishments and government authorities will spend approximately Rs 54,344 crore on advertising across media channels during 2017 which is 11.2% more than 2016.

A study conducted by the Commonwealth Human Rights Initiative reveals that every day, approximately 4800 applications are filed to access information under RTI and since October 2005 when it was implemented over 1.75 crore applications have been filed with one-fourth being requests to the centre.

The domain name industry in India has grown nearly 12% in the past three years, much higher than the global average of 8.7%. The domain name count has gone up from 3.5 million in 2013 to 4.9 million in 2016. Of the 1.56 million active domain names, 40% are used for websites, 10-12% for professional email services.

There are total 1200 companies in fintech sector and $1.73 billion was invested in the fintech space in India in 2015-16. The most active investors in the

space include Sequoia Capital, Accel Partners, and Blume Ventures.

The major us television networks, aBc, cBs, NBc, WsJ, and NyT have topped in ascending order the list of most trusted news service in the US in a survey by online polling firm Morning consult.

There are 71 NBFC-MFIs registered with the RBI and Rs 55,254 crore is the gross loan portfolio as on 30 September 2016. Out of this 8 NBFC-MFIs are converting into small finance banks by March 2017.

There are 105 crore mobile phones, 109 crore Aadhaar numbers, 50 crore internet users.

There are almost 5.8 lakh ration shops in the country.

Fac

Ts

The Daring Female copsTwo women cops from Bengal bravely faced a 600-strong mob in Haryana to rescue a trafficked girl. By the end of the mission, they were successful in rescuing not one, but three minor girls, and also arrested nine traffickers. The three girls were kidnapped and brought to Haryana to be married off. The fearless cops -- sub-Inspector Piyali ghosh and constable madhumita Das from Sankrail Police Station in Howrah, left for Haryana with two male constables. The team was following a tip-off obtained from a Howrah-based suspect named Mehfizza who told them that she had sold a 15-year-old girl in Palwal district of Haryana, with the objective of getting her married to 10 men. But in the process of raids and investigation, the cops had to face a mob of about 600 people, which chased them through open fields saying that they

Hero even after deathCastro died on November 25 at the age of 90. The large gray stone at the Santa Ifigenia cemetery, marked simply “Fidel” under which Castro’s ashes have rested since December 4, is visited by an average of 2,000 Cubans and foreigners daily. To avoid the development of a personality cult and in compliance with the leader’s wishes, the Cuban government approved a law prohibiting the use of his name and/or image by institutions on monuments or for commercial ends.

were trying to kidnap their women. People in the mob were screaming for “public justice” and the women cops had to urge their counterparts in Haryana police to fire shots in the air to save their lives. Piyali Ghosh and her team was at last successful.



at last someone spoke the truth –“The United Nations (UN) has such great potential, but it has become just a club for people to get together, talk and have a good time.

With a warning –“As to the UN, things will be different after January 20, 2017 (after he takes office)”.

“(Marco Rubio) referred to my hands — “if they’re small, something else must be small.” I guarantee you there’s no problem. I guarantee.” – The now-President-elect Donald Trump defended the size of his penis against coy speculation from a Republican opponent that it was small.

But also gave the most outrageous statement of 2016

“[on] events like new year’s … there are women who are harassed or treated badly. These kinds of things do happen. The problem was that the young people who had gathered in the city’s streets were almost like westerners. They tried to copy the westerners, not only in their mindset, but even in their dressing. so some disturbance, some girls are harassed, these kinds of things do happen.”

– g Parmeshwara, the Karnataka’s Home Minister

Responding to a survey by a weekly magazine, carl Paladino, a former Republican nominee for governor of New York and an adviser to president-elect Trump, included the death of President Obama and “return” of first lady Michelle Obama to Africa on his list of things he wanted for 2017. Asked what he would like to happen in 2017, he said he hopes that “Obama catches mad cow disease” and dies after having relations with a Hereford, a type of cow. Asked what he would most like to see go, Paladino responded that Michelle Obama would “return to being male” and be “let loose” in Zimbabwe.

Chicago alderman ameya Pawar has announced he’s running for Illinois governor. He is the first and only Asian American on the Chicago City Council. The 36-year-old son of Indian-American immigrant parents represents a predominantly white North Side ward. After barely winning election in 2011, he won more than 82 percent of the vote there four years later, the largest margin of any alderman in 2015.

The Indian origin-canadian billionaire Prem Watsa, cEo, Fairfax Financial, has in the past 24 months invested over $1 billion in India, across assets.

Forbes has named Balkrishna, founder and mD, Patanjali ayurved Ltd, as India’s 48th richest person in 2016, with a net worth of $2.5 billion. The company is aiming to cross Rs10,000 crore in revenue by march 2017.

soooooooooo disgusting!



With malice toward none; with charity for all

aT this second appearing to take the oath of the presidential office,

there is less occasion for an extended address than there was at the first. Then a statement, somewhat in detail, of a course to be pursued, seemed fitting and proper. Now, at the expiration of four years, during which public declarations have been constantly called forth on every point and phase of the great contest which still absorbs the attention, and engrosses the energies of the nation, little that is new could be presented. The progress of our arms, upon which all else chiefly depends, is as well known to the public as to myself; and it is, I trust, reasonably satisfactory and encouraging to all. With high hope for the future, no prediction in regard to it is ventured.

On the occasion corresponding to this four years ago, all thoughts were anxiously directed to an impending civil war. All dreaded it--all sought to avert it. While the inaugural address was being delivered from this place, devoted altogether to saving the Union without war, insurgent agents were in the city seeking to destroy it without war--seeking to dissolve the Union, and divide effects, by negotiation. Both parties deprecated war; but one of them would make war rather than let the nation survive; and the other would accept war rather than let it perish. And the war came.

One eighth of the whole population were colored slaves, not

distributed generally over the Union, but localized in the Southern part of it. These slaves constituted a peculiar and powerful interest. All knew that this interest was, somehow, the cause of the war. To strengthen, perpetuate, and extend this interest was the object for which the insurgents would rend the Union, even by war; while the government claimed no right to do more than to restrict the territorial enlargement of it. Neither party expected for the war, the magnitude, or the duration, which it has already attained. Neither anticipated that the cause of the conflict might cease with, or even before, the conflict itself should cease. Each looked for an easier triumph and a result less fundamental and astounding. Both read the same Bible, and pray to the same God; and each invokes His aid against the other. It may seem strange that any men should dare to ask a just God’s assistance in wringing their bread from the sweat of other men’s faces; but let us judge not that we be not judged. The prayers of both could not be answered; that of neither has been answered fully.

The Almighty has his own purposes. “Woe unto the world because of offences for it must needs be that offences come; but woe to that man by whom the offence cometh!” If we shall suppose that

American Slavery is one of those offences which, in the providence of God, must needs come, but which, having continued through His appointed time, He now wills to remove, and that He gives to both North and South,

this terrible war, as the woe due to those by whom the offence came, shall we discern therein any departure from those divine attributes which the believers in a Living God always ascribe to Him? Fondly do we hope--fervently do we pray--that this mighty scourge of war may speedily pass away. Yet, if God wills that it continue, until all the wealth piled by the bond-man’s two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash, shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said “the judgments of the Lord, are true and righteous altogether.”

With malice toward none; with charity for all; with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in; to bind up the nation’s wounds; to care for him who shall have borne the battle, and for his widow, and his orphan--to do all which may achieve and cherish a just and lasting peace, among ourselves, and with all nations.

This speech by Abraham Lincoln, delivered in March, 4, 1865 has been acknowledged as one of the remarkable documents in history. Journalist Noah Brooks said that as Lincoln advanced from his seat, “a roar of applause shook the air. Just at that moment the sun, which had been obscured all day, burst forth in its unclouded meridian splendor, and flooded the spectacle with glory. Looking down into the faces of the people, illuminated by the bright rays of the sun, one could see moist eyes and even tearful faces. But chiefly memorable in the mind of those who saw that second inauguration must still remain the tall, pathetic, melancholy figure of the man who, then inducted into office, and illumined by the deceptive brilliance of a March sunburst, was already standing in the shadow of death.” He was referring to Lincoln’s sudden death by assassination only weeks after the speech.


LEISURE ON RECORD

LEST

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January 16, 1991: The war against Iraq began. The air raid on Baghdad was broadcast live to a global audience by CNN as operation Desert shield.

January 1, 1959: Fidel castro seized power in Cuba and established a Communist dictatorship.

January 30, 1948: mahatma gandhi was assassinated in New Delhi.

January 29, 1860: Russian playwright anton chekhov was born.

January 19, 1966: Indira gandhi was elected PM in succession to Lal Bahadur Shastri who had died eight days earlier.

January 30, 1933: adolf Hitler was appointed Chancellor of Germany.

January 8, 1935: Elvis Presley was born in Mississippi.

January 21, 1924: Soviet Russian leader Vladimir Lenin died.

January 15, 1929: martin Luther king was born and stressed nonviolent methods to achieve equality.

January 17, 1942: muhammad ali was born. At age 22 in 1964, he knocked out Sonny Liston to win the world heavyweight boxing championship.

January 23, 1898: Russian film director sergei Eisenstein was born. He developed montages to deliver an emotional impact. His classic films include Potemkin, Alexander Nevsky, and Ivan the Terrible.

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January 28, 1986: us space shuttle challenger exploded 74 seconds into its flight, killing seven persons.

January 14 1892: American film pioneer Hal Roach was born in New York. His output included nearly 1,000 movies of all lengths, including the classic Laurel and Hardy comedies.

January 31, 1943: German troops surrendered, marking the first big defeat of Hitler’s armies in World War II.

January 6, 1412: Joan of arc was born in France. She inspired French troops to break the British siege at Orleans and win several important victories during the Hundred Years’ War (1337-1453) between France and Britain.

January 27, 1756: Wolfgang amadeus mozart was born in Austria. From the age of five, through his untimely death at age 35, this musical genius created over 600 compositions.

January 27, 1832: Best known for Alice’s Adventures in Wonderland and Through the Looking Glass British novelist Lewis carroll (1832-1898) was born.

January 4, 1809: Louis Braille was born in France. Blinded as a boy, he later invented a reading system for the blind.

January 24, 1972: Japanese soldier shoichi yokoi was discovered on Guam after he had spent 28 years hiding out in the jungle not knowing World War II had long since ended.


Printed, published and owned by Krishna Kumar Kesho Ram Mishra and printed at Digwijay Printing Press, Gala No. 9, Saptarshi Bldg., Behind Milan Hotel, Daftary Road, Malad (East), Mumbai – 400 097 and published at 105/4, Ground Floor, Opp Bharat House, Mumbai Samachar Marg, Fort, Mumbai – 400 001. Editor: Krishna Kumar Mishra

Registration No: MAHENG14169 dated 21/4/2016

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