GOLD, THE DECEPTIVE METAL.

Gold has earned its name as the ultimate for excellence. It is a universal metal.

It is sought by both an uncivilized tribal in the jungle to the investment wizard in New York.   It has been hailed as a reliable and all time valuable assets beating the values of Real Estate, shares, and bank deposits. Gold has an instant value all over the world despite having no economic significance like iron, copper or aluminum except for making jewels or as a show of affluence.  

Gold is the king of all metals because of its everlasting quality.  It has the highest density, does not get rusted and not affected by acids and chemicals.  It maintains its shine and quality and remains  un affected by weather or pollution.   Gold is malleable enough for just 1 gram to be hammered into a sheet 1 square meter in size. It can also be made so thin that it appears transparent.   

Economists give merit to gold because it is generally preserved and not consumed like other commodities and are easily encashable in future.

Gold deludes Indians.

 The unveiling of gold ornaments from the Padmanaba Swami temple in Thiruvanathpurm started blowing a storm in the minds of the people.  Media was flooded with opinions and comments on how to make use of the gold. The value was estimated to be a few thousand crores.  Politicians driveled that the gold haul can repay all the debts of the nation and the government of India should take immediate steps in that direction.  Wild estimate reports started pouring about the value of  gold stock in all the temples  and the possession in the hands of individuals.    It is true that the sale proceeds can make India a debt free nation.  Will it solve our economic problems by improving our standard of living? , increase employment opportunities?, reduce the inflation ? and increase our productivity?   These could be possible even without selling the gold if we have a sound system and good governance in place.           

 Gold reserve is not the proof of a nation’s wealth. It is one of the backup values for the currency and its exchange price in the international market.  Prosperity of a nation is judged by the strength of its GDP and per capita income underpinned by an effective and accountable government.  Industrial, technological and agricultural development determines growth and prosperity.   

Gold dominates Indian Economy

The mushroom growth of gold retail outlets all over India is an indication for the   public’s craze for gold.  According to World Gold Council report (2014) India tops the list of consumer demand with 223 tons of gold followed by China 193, USA 67, Russia 47, Europe 90 and Japan 0.7 

Gold and oil cover 70% of India’s current account deficit.  A reduction in gold import by 25% can considerably reduce the deficit, but no one is willing to bell the cat as the gold lobby is strong and influential.  Our gold needs are met by imports only. The gold import has escalated from 688 tons in 1997 to 1020 tons in 2012.

The retail appetite for gold is fast increasing for two reasons 1. The purchasing power of Indians has moved up 2. Gold loan business, provider of easy liquidity for the poor, has steeped from Rs. 2500 crores in 2002 to 50,000 crores in 2011. 

Gold and jewellery   account for 12.5 % of our total foreign trade of US$ 764 billion (2014) and the share of   industrial, technological and agricultural goods are below gold.  Jewellery making seems to be the single large industry of the nation surpassing even the software.  In contrast, the major share of China’s foreign trade is machinery and electro mechanical parts.  While India is starving for infrastructural development we are emerging as the top goldsmith   of the world. The largest gold dealer Rajesh Exports’s turnover of 37000 crores is 75% of the turnover of Infosys or Tata Iron & Steel.

The gold holdings of developed countries are thrice larger than India, however they are stacked to maintain currency value; their retail appetite is very low.  Japan started accumulating gold in the 1990s after it became the second largest economy and a creditor nation.   Developed nations accumulate gold after their successful holistic economic achievement by hard work, innovation, efficient administration of resources and governance, whereas India is putting the cart before the bull/horse.

Conclusion

Though gold, for all practical purposes, considered a luxury is given more importance than other essential commodities due to pressure from social customs and religious sentiments.  Despite having zero utility value, it is sought even by poor people to satisfy their individual or family ego and prestige.   It is surprising that highly educated Indian women prefer gold and jewellery to flaunt their affluence.

Bridling the gold craze is a herculean task.  As long as the strong individualistic feeling and fear of future prevail gold will be the most sought after commodity. NAMO’s drive to popularize bank accounts for the poor is an awakening programme to infuse confidence in the regulated financial market which offers better investment opportunities related to economic growth.  

 

Dr. Krishnan Arunachalam 

Gold in Padmanaba Swami temple www.asialite.com

NRIs (Non Resident Indians)

The Envied Section of the Indian Population.

NRIs are grudged as superior class of citizens enjoying unequal wealth besides having  many fiscal sops and a special prestige with traders, bankers and government. They are liked and disliked citizens of India.   All NRIs are not fortunate, more than 40% struggle and slog in miserable conditions outside India.

The origin of NRIs

Slavery was abolished in Britain in 1833 by the efforts of William Wilberforce. The British planters in Caribbean and  South Africa lost their fortune as slaves became workers with many privileges   and their cost cut into their profits.  The short supply of human labour made the plantations companies sick.  In order to fill this gap British government introduced the indentured labour plan which authorized the planters to recruit and import Asian particularly Indian labour.  The Act XXXII was passed in 1867 by Lord Stanley authorizing the emigration from India into the various colonies of Britain and France.  The 1100 pages Act provides many provisions to safeguard the interest, health and dignity of the Indian labourers, however scant respect was given to them and Indians were treated as slaves. Charles Anderson, wrote to the Colonial Secretary declaring that 'with few exceptions Indians are treated with great and unjust severity, by overwork and by personal chastisement’ The ship load of Indian indentured labourers were referred as “arrival of human cargo or Hill Coolies” This situation has not changed until now.  Relentless campaign by Gopalakrishna Gokale and Mahatma Gandhi forced the British government to stop hiring Indian labour to South Africa and Caribbean.

Resurgence of NRIs

The outflow of NRIs dried up from 1947 to 1975 until Indira Gandhi took some initiative to protect and nurture this golden egg laying goose. She not only encouraged free flow of foreign exchange  but also   unfolded many sops like zero taxation, free repatriation facility, free investment inside India etc.   

India is placed on the top of the list with US $ 70 billion (INR 462,000 crores) in remittance (2013) followed by China US$ 60 billion, Philippines US$ 25 billion, Mexico US$ 22 billion, Nigeria US 22 billion, Egypt US 17 billion Pakistan US$ 15 billion, Bangladesh US $ 14 billion Vietnam US$ 11 billion and Ukraine US$ 10 billion. (TOI Apr/12/2014)  The NRI remittances cover 3.6% of the nominal GDP of India and are more than the total export (US$60 billion) of software products from India. (World Bank Report).   

There are over 22 million NRIs and PIOs (People of Indian Origin but non Indian citizens) spread all over the world in 195 countries.

                              NRIs& PIOs (http://greaterpacificcapital.com/)

The remittance is 31% from Gulf states mostly from semi skilled labourers, 29% from USA contributed mostly by IT professionals/ nurses and 19% from EU contributed by IT professionals/doctors/nurses and small entrepreneurs and the remaining from other parts.  Remittances from PIOs are minimal.

Indian population in USA is the most successful and well respected Diaspora.   A US Congress man in 1908 charged “Indians are weak rice eaters and worshipers of different Gods; they are not fit to be citizens of this tough country”.  Now they comprise high achieving   individuals like US senators, Noble laureates, CEOs of fortune 500 corporations, scientists, IT professionals, prize winning authors and scientists. 

The average income of Indians in USA is US$ 68000 as against $48,000   of general average.  It is estimated that only 6% of the Indians live in poverty as against 15% of the general average. 

Conclusion

Are NRIs a pride of India?  Yes, but the question is “why don’t they help India with what they have achieved abroad”.  They are more than willing to do any help, but do we have a trust- worthy economic/political structure?   Politicians frequently enjoy foreign trips to lure the NRIs for investment.  Many NRIs who  invested in the real estate are in a soup.  They do not expect preferential treatment   but look forward to transparency and genuine business friendly atmosphere.  Foreign investors enjoy the full support of their respective government in the event of any dispute or complication, but where will the NRIs go? The World Bank places India as one among the most difficult countries to do business.    Recalcitrant   bureaucracy   and corrupt politics are the two visible termites in the national system   that scares away ventures into India.   Tall talks on reforms should focus more on reducing the prevailing systemic inertia.  

NRIs and PIOs make less than 2% of the total population but their estimated wealth is around US$ 700 billion (INR 4.4 crores crores) which is twice more than the foreign reserves of India.  They rank as   the sixth wealthiest community in the world with  USA in the first place followed by China, Japan, European Union and Non Resident Chinese.  It is unfortunate that the West benefits more out of the  NRIs  than India due to her own poor governance.  

Dr. Krishnan Arunachalam

Ref: Wikiepedia.com, greater pacific capital.com

       Indian an Ideal Labour or Slave by the author

(Pulbished in Mylapore Club Magazine October 2015)

Edward George Geoffrey Smith Stanley(1799-1869), by Daniel J. Pound

The First promoter of NRIs. National Library of Australia, nla.pic-an9453251

Will India become like Japan ?

“NO” – Swami Vivekananda.

                                       

            

This interview with Swami Vivekananda by a reporter from The Hindu at the  Chengalpattu Railway station  in February 1897 may be a surprise. (Ref: Ramakrishna Vijayam – January 2015, Title: “Learn from Foreigners”- Translated from Tamil)

Excerpts:

Q; What is the secret of Japan’s fast growth in the recent years?

Ans:  The Japanese are basically honest and very patriotic.  They are ready to sacrifice for the sake of their nation.  India will be successful only if Indians are honest like the Japanese.  A nation’s success and prosperity are determined by the valor and integrity of its citizens. People have to develop a nation.   They are ready to do anything for the sake of their country whereas Indians are not.  Indians care more about their own family and their own belongings.

Q: Do you wish India to become like Japan?

Ans:  No!  India will remain as it is. It cannot become like another country. Every nation has its own basic character around which it is built.   The nucleus of India is RELIGION.  All other social and political development s will only have a mild and temporary influence on the deep rooted religious feelings.  Religious and god fearing feelings are all pervading in this nation and they alone can give the citizens peace of mind.   India will remain as India because we are not like the Japanese.

The above interview reveals an important aspect of the Indian culture and psych. Ignorance and apathy still influence the 69 year old national spirit.   Patriotism is demonstrated by waving the national flag and shouting Vandhe Mataram on the streets on August 15th every year.    Indian patriotism is still lingering around on the long gone British rule. The proof is the mass cheering of the recent outburst of Sashi Tharoor in Oxford against British imperialism.  It is similar to the style of Pakistan where its patriotism is measured more by hatred towards India.   Indian rulers did not strive at all to educate the citizens on the true patriotism of caring for the development and security of the nation.  Media is also more reactive than proactive. 

 Swami Vivekananda missed the great fun of the new developments after independence, the cinema culture, political games and religious fervor.   Majority of the Indians, including the well educated have scant knowledge about our army’s importance and achievements, where as they read and discuss a lot about many wars and battles described in the epics. Security consciousness remains at a rock bottom.  Devotees compete to splurge on donating high value jewelleries to the deities while the temples starve for basic infrastructural needs in and around the temple like water, sanitation, pathways and cleanliness. G.K. Chesterton, British writer said “Indians only exist in this world but live in some other world”

The patriotism fire lit by Mahatma Gandhi is running out of fuel mainly due to permeating dynastic rule. Obsolete British customs, practices, rules, regulations and laws are still in force with least interest to revise and indianise them.   The educated youth are disgusted with the corrupt politicians.  One of the comedy TV programs   by   Cyrus Baroacha    mocked about BTBB meaning “Bring the British Back”. Britain will certainly decline any such offer.  Murmurs of the learned are becoming louder concurring with the hate speech of Winston Churchill.  

“All Indian leaders will be of low caliber and men of straw. Indians are not fit to rule, they are fit to be ruled” – Winston Churchill.

"A commercial company enslaved a nation comprising two hundred millions.  What does it mean that thirty thousand men, have subdued two hundred million vigorous, clever, capable, and freedom-loving people? Do not the figures make it clear that it is not the English who have enslaved the Indians, but the Indians who have enslaved themselves?" (Letter of Leo Tolstoy to Mahatma Gandhi)

Crab mentality seems to be a curse on Indians. *The self derogatory remark is “one Indian is equal to 10 Japanese but 10 Indians will be equal to lesser than one Japanese because of politics and infighting among them”.

 Neo Patriotism

 Political and economic experts affirmed in a panel discussion ** (By Mythili Bhushnurmath) that the ambitious Smart City programme of NaMo will be a reality only if Swachh Bharath (SB) becomes a success. YES. SB is a great opportunity and a challenge to the younger generation of India to demonstrate their patriotism.  The success will have tremendous positive and progressive impact on the social, economic and political fabric of India.  It will  bring people together for better understanding and mutual respect.  It is not an easy task but should not be given up.  Boundary of demonstrating patriotism is not limited to fight with  belligerent foreigners. Fighting against our own odds and focusing on national development and security are the needs of our time.  SB had started off very well invoking the national spirit; hopefully it should evolve as a culture. The Japanese and the Chinese were very successful in this experiment. Suggest that it may be made a mandatory part of the Corporate Social Responsibility program.  

Swami Vivekananda will be only happy if his remark is belied.    

Dr. Krishnan Arunachalam

 Ref

*Sujeeth Kumar, Infosys, speech in CTM

** economictimes.indiatimes.com › Experts  Panel discussion on smart cities, its challenges for India in Macros

(published in Mylapore club magazine Sep/2015  titled “ Swachh Bharath- A great opportunity to Demonstrate our Patriotism”

                                 

                            Demonstration of true patriotism (Indiatvnews.com)

HISTORY – a borING and trivial subject

Some light on its INTANGIBLE VALUE

   

            

Present day youth have an aversion to learn history.  They think it is a subject wherein one has to remember a lot of names of kings/queens/dictators/generals, palaces/fort, dates of battles/war and many more. They feel that it is a waste of time to know about the past, a thought of an ignorant and immature mind.

Dictionary defines  history as  “a continuous, systematic narrative of past events as relating to a particular people, country, period, person, etc., usually written as a chronological account; chronicle”.:

Every living being, organization, group, nation scientific development/device product, system, religion, has their own history of origin, development and end or current status giving causes and consequences of various events during their survival period.  Critics of history fail to realize that they have their own history. 

    

Study of History was very primitive in India due to absence of documentation culture.  The “Sthala Puranam” of temples was more mythological than historical.    Sir. William Jones took the initiative in 1781 to explore and bring out the history of India.  The Archaeological survey of India was initiated by Alexander Cunningham and the final shape was given by Lord Curzon in 1902.  Numerous excavations have taken place in the last 100 years to get a good idea about ancient India.  

Concept of Museums, a reminder of the of past history

Western culture is very keen to preserve past history.  All the cities in the West will have a museum to speak about the heritage and past history of the country.    Huge amount of money is spent on preserving the museums.  It is not viewed as a place for pass time.  A few facts about world famous museums:

British Museum, London: Founded: 1753, Visitors: 5.93 million (2008/9), Collection: 8 million objects, Area- 75,000 Sq. mtr

Louvre Museum, Paris: Area: 60600 Sq mtr, Visitors: 9.7 million (2012).No. Objects: 35,000

Smithsonian Museum, Washington: Contains 9 different museums and a zoo. 135 million objects displayed. (It is estimated that to view all of Smithsonian will take a few years)

The US library of Congress established in 1800 has 160 million (16 crores) of books, manuscripts, maps and photographs stacked   on approximately 1340 KM  of  book shelves, the distance between Chennai and Mumbai .  (https://www.loc.gov/about/fascinating-facts/)

Russian Museum, St. Petersburg: Established in 1890, Area: 120 rooms, Objects displayed: 440,000.

National Museum, Delhi was opened in 1949 and has 200,000 objects on display.

The National Library of India, Kolkata is the largest with 2.2 million books.  

The concept of museum is not limited to just exhibition of old sculptures and drawings, it also substantially covers scientific and industrial development. The Natural History Museum of Smithsonian contains 300,000 species of insects collected from all over the world. India has 24 science museums, UK 52, Germany 16 and USA over 100.   

 Patience, perseverance and mining for information are the three important factors for a successful research. Analyses of the past leads to evaluate the progress to the present which will in turn help plan the future. Museums and libraries provide substantially for the above functions.

Conclusion:

Jack Welch, the CEO of General Electric said “do not plan your future based on the past.” He was partially correct, a bitter experience may discourage future ventures but it also prevents repeat of same mistake.

People who think more about future will have only dreams. Those who have looked back will be more pragmatic and be able to develop the acumen for a promising and successful future. 

The planning chapter of the modern management studies starts with “where we were, where we are now, where we want to be in future and how to get there.”  The same principle is to be adopted by a nation and the first step is to understand “how and where it was?

It may be argued that history study will revive the old and forgotten rivalries but in most cases the educated and more civilised descendants of the rivals repent their ancestors’ mistakes. 

 European nations preserve  the record of chronological events of their past for the benefit of the future generations.   Indian Newspapers carry a column called “Today in history” where one can find mostly   European events which is due to their  documentation culture.

Unfortunately, Indians are not only unaware of  their past history but also disinterested to know about it.  We are ignorant about our past therefore we are confused in the present and fear the future. 

The Indian education should project history as an analysis of the past and not just an informative study.  A distorted or inadequately projected history may affect the very character and psyche of the future generation.  There are controversies in drafting the Indian history. The focus  is more on the medieval and European era during which we were subdued. The impact is the still prevailing docility among Indians.  Our contributions like Yoga, Artha Sastra, astronomy and our millennium old cultural influence in the Far East should be highlighted to infuse pride and confidence.   Wealthy businessmen and politicians (!) should   come forward to  establish  modern  and large scale libraries and science museums.  

Dr. Krishnan Arunachalam.

Ref: Author’s speech in Sankara Senior School, 2011

       www.wikipedia.com

(published in Mylapore Club Magazine August 2015)

WILL INDIA SUCCEED IN R & D ? (Research &Development)

DIMINISHING BASIC mindset for Research

Innovation is not a process but a state of mind. Therefore it can’t be learned but felt – Ivonne Kinser

       

When there was a hue and cry about giving posthumous Bharath Ratna, Sri Narayanamurthy of Infosys, in a TV interview asked “why not to Ramanujan, the mathematical genius?” He was expressing his frustration towards the national neglect of Science & Technology (S&T).

The awareness about science and technology in India is still primitive.  The nation’s concentration is towards Politics, Movie mania and Religious fervour.   India had produced more than 100 world renowned scientists until 1980 and its continuity has shifted to the West. Recent Indian Nobel laureates and Fields Medalist are citizens of the West. The root cause is the steady decline in research culture in universities due to faulty educational policy.  The number of PhDs spiked from 10781 in 2008 to 16093 in 2011 (UGC report).  The impact is less impressive.   Imagination and independent thinking, the seeds for innovation, are undermined by the examination/marks culture in the educational system.    

The encouragement to Scientists is basically infantile.  Their discoveries are not taken seriously for further research; instead, they are glorified with titles, awards and functions.  Cash awards to achievers may attract sports persons and artists but cannot develop scientists.  Researchers need  equipped laboratories, libraries, equipment at cheap price, financial support , interactions and support from business world and educational institutions, cooperation from public, encouragement from family and   due recognition  for the efforts.  

There is hardly any public library exclusively for science and technology in metropolitan cities. There are no exclusive TV channels like Discovery Science and Nat Geo for S&T addressing India’s achievements, issues and challenges. Business channels cover mostly finance related affairs.

 There are about 100 institutions funded and run by Central Government for S&T development all over India, yet the result is less promising. They seem to provide employment opportunities to the bureaucrats. The exceptions, probably, are Indian Space Research Organisation, Bahabha Atomic Research Centre, Council of Scientific and Industrial Research and Defence Research & Development Organisation.

. 

Role of Corporate Sector      

http://juneshlam.com/2011/02/12/why-i-quit-my-phd/

When the high tech heavy vehicles of Volvo entered the Indian market, the response from the Indian counterparts was that they are also capable of making similar vehicles.  There was no answer to the following questions. Why did you not make it earlier? Why make this statement only after Volvo arrived? If you had made it earlier, Volvo would not have come to India.  The evasive response is “we are unable to meet the demand for the present vehicles”.  Hindustan Motors (Ambassador Car) that gave the same reason 30 years ago has disappeared from the roads of India crushed by the competition from MNCs. This is the reflection of procrastination and trying to stretch as much as possible with existing products and system.    

IT companies are confined only to service providing and not product development.  Sanjay Pingle reported in Pharmabiz.com (Oct/7/13) that Indian pharmaceutical companies have substantially increased their R&D expenditure but they are focused on new cost effective generic products and not on new discoveries.

The average spending on R&D by the top Indian corporate heavy weights (TCS, Infosys, BHEL,  Sun Pharma, , Tata Group)  is below 2.5% of the total revenue as against IBM 5.9%, Microsoft 12.9%, Merk 17.6%, Siemens 5.3% and Toyota Motors 4.2.%.(Yahoofinance.com) 

 “Within the Tata Group, the ‘innovation’ investment over the last 100 years has been sporadic and it’s only in the last five years that there has been a consistent surge and focus in this area,” said Sunil Sinha, chief, Tata Quality Management Services. (Hindustan Times Oct/27/14)

The   ineffective government control over fake and duplicate products, copying, and pirating that violate patent rights also discourages  innovations. 

India ranks 66 out of 142 in the Innovation index.  Innovation need not be in high technology.  Innovative consumer products from China and Korea have already flooded the Indian market.    

The Indian corporate sector is still embryonic in product development.  The converging point is “lack of mindset for R&D”.  Indian corporate should stop skimping on R&D and think seriously the remark of Bill Gates “You obsolete your own products before your competitor does it.”

 It is self humiliation that despite having large pool of highly qualified scientists, Indian industries are thriving on imported, borrowed, pirated and obsolete technologies from the developed nations.

Conclusion

 Mark F. Schultz (The Hindu 4/11/14) wrote that there is a big a gap between India’s innovative capabilities and results.  The gap is created by the ignorant and aversive public, reluctant corporate sector and Government inaction.

India boasts that it is becoming a hub for research activities of the MNCs.  Approximately 150 MNCs have started their R&D centres across India to take full advantage of the cheap talent pool.  RBI reported that the R&D expenditure of MNCs in India has increased from Rs. 28.6 crores in 2002 to Rs. 288.3 crores in 2010.  Ministry of Science &Technology revealed that India spends 0.87% of its GDP in R&D whereas the figure for developed nations is over 3.3%. During the period 2010/11, 39400 patents were filed in India shared by MNCs 31100 and Indians’ 8300. The Indian government aims only at FDIs from MNCs and never thinks seriously about exploring the  Indian talent and skills for Indian industries. 

           

 NAMO’s “make in India” will succeed only if  R& D is given top priority and its importance is popularized  similar to the Yoga campaign..

Dr. Krishnan Arunachalam

(Published in Mylapore Club Magazine July/2015)