Thursday, April 29, 2010

The Cost of Higher Education

In the last 4 years, the tuition fees and other costs associated with institutions of higher learning have started shooting through the roof. For example, fees at IIM-Ahmedabad are now reportedly Rs.13.5 Lakhs for two years. I am not commenting about whether the fees charged today by IIM-A reflect the worth of the education or not (that is a separate point for another day). My intent here is to create consciousness of  the indirect, secondary impact of the fee-rise. The primary effect is on the students hoping to get or getting admission at IIM-A. The secondary effect affects the entire sector it operates in.

Fees charged by such iconic institutions are a little like the "Bank Rate" announced by the RBI: while nobody uses that as a benchmark, generally, fees charged by other institutions with lesser reputations tend to cluster around this figure, and use it as a justification. Some charge more (like the ISB) and most charge less, but not much less. Since the IIM-A has raised fees roughly three-fold (I stand to be corrected) in less than 5 years, institutions of much, much lesser repute (ranging from good, low profile institutions to fly-by-night operators with monstrous advertising budgets) have, in the same period, at least doubled their fees without in any way delivering anything substantially better to the student body. It would be fine if the earlier fees were so low that profitability was an issue. They never were. Higher education has become a business in which politicians have dabbled and entered in a big way. This itself is a sure sign  of how lucrative the business was. Now, they are rubbing their hands in glee: Along with a huge increase in the fees, there has most likely been a significant fall experienced in the cost of "managing the environment", what with the regulatore, the AICTE standing totally discredited today.

What's more, the other forces that could have drummed sense into this sector, like the raters, have themselves over the years, opened themselves to charges of being very pliable, though some of them are in all probability pillars of rectitude. Besides, in any case, rating methodology is itself open to question, with its predominant reliance on physical indicators like infrastructure, which is very easy to create and set up in sectors like Management Education -- no equipment, hospitals or labs are needed. Also,.many institutions have learnt many tricks to "game" these ratings. As a result, there is no way for the lay person to figure out which rater is the most honest, or which institution is the best value for money, or even which institution is exceptionally good. B-Schools, especially, have become marketing institutions at two ends -- to attract applicants and students at one end, and to attract employers and push their students into lucrative jobs at the other (which is already becoming too difficult for most institutions to guarantee, so they talk of maximum and average packages, while downplaying the percentage of placement.

Every student must today conduct a RoI exercise for whether it is worth doing an MBA or not. An important element in this RoI calculation has to be opportunity cost -- what you would earn if you were not to do your MBA. The purpose of this exercise is to recognize clearly that for the below-average or average student, today, even doing an MBA from a 50th or 100th rank B-School in most ranking lists, or worse, an unranked B-School, it will never be worthwhile in financial terms. Once this clarity is achieved, one can take a decision about whether it is worth ding an MBA for all the non-financial reasons, like status, prestige, etc.

Wednesday, April 28, 2010

Portfolio Living: A Personal Experience

This is my first "autobiographical" blog entry. So, Dear Reader, you are forewarned!

About a year ago, I gave up what was my fourth job in 7 years, to resume my life as an independent professional.  Each job was radically different from the other. First, I was Director of a KPO/ BPO company with responsibilities mainly restricted to the D in R&D. I dumbed down processes so that both, scale and quality could be managed with lesser experienced or skilled people. I could almost call myself a software professional then. The next job was that of a full-time Professor in a B-School in Mumbai. The third was with the training unit of a large conglomerate, organising and delivering high quality, expensive training programmes in Finance for all levels of finance managers upto the CFO level. The last was as Dean of a B-School, with the job consisting mainly of mentoring and lecturing. My first job came at the end of a long 16-year innings as a practising Chartered Accountant. Here too, I did several things besides the bread-and-butter work of tax advisory and filings. I was, at various times, author, visiting faculty at B-Schools, editor, banker, software product developer, and (on rare occasions) public speaker. 

When I started my second innings as an independent professional, I have not kept myself bound by the shackles of a Certificate of Practice as a Chartered Accountant, as I don't audit, attest or represent anybody before any authority. I landed a near-full-time assignment with an old mentor, and decided to pursue studies in the field of Intellectual Property Rights. I also organised my life such that I spent almost no time on commuting. I therefore get 4 hours extra everyday compare to people who commute to the other end of Mumbai city, all the better to pursue varied interests outside of work, and more intellectual stimulation too.

In scarcely a year, I found myself getting involved in several small as well as long-range assignments or projects, all using spare time outside of a normal working day. Many of these projects have little earning or financial potential, like making mind-maps of various theoretical topics in the CA syllabus for aiding my son's learning, building a family tree, helping create and raise funds for a school alumni network, etc.. They were satisfying, nevertheless. I also did (and still do, whenever I get an opportunity) several small "promotional" or "concept-selling" appearances at various fora, selling the concept of greater awareness of IPR among the community of corporate managers. I am also working simultaneously on two distinct research projects in the field of IPR. As a result, my work content on any day is refreshingly varied though all the variation is during the "after-hours".

Recently, I met a dear friend (and former colleague) who has equally eclectic interests as mine, but has scholastic credentials much better than mine, (Fulbright scholar and all that). In fact, I have such a high opinion of his capabilities that I once told him in all seriousness that he could be the next Vir Sanghvi or Karan Thapar in the world of television news, if only he allowed himself the luxury of a career change. When he asked what I was upto, and I told him all the small and big things that I am engaging in nowadays, he remarked that I had transitioned to a portfolio life. I asked him what he meant by it, and then he told me about a book called The Elephant and the Flea by Charles Handy. The next day, I googled "Portfolio Living Handy" and got this and this. And discovered that my new way of life indeed had a name: Portfolio Living. Apparently, there are many, many people living this way (I am not a freak!) and their tribe is increasing everyday. Have been sleeping well since.:-)

Friday, April 23, 2010

More on ULIPs - esp NAV Guarantee

In this entry, I had done a round-up on the ULIP SBI vs IRDA controversy, quoting a few experts. One of those experts, Jayant Thakur, commented on one aspect of my entry on which entity takes up the downside of the NAV guarantee, and what is its capital adequacy. He pointed out this article to me.  Inter alia, this article points out that the way the guarantee is managed is that if the NAV spikes on any day, enough of the portfolio is transferred to debt to cover the guaranteed NAV on maturity. This struck me as very unfair to the investor.
 Most ULIP brochures (here is an example) include words to this effect:

There will be an additional charge for the cost of investment guarantee of 0.10% per annum. These will be made by adjustment to the NAV.
This actually is the opposite of what advertisements make out implicitly -- that the risk and cost of the guarantee is being borne by the insurance company, whereas they are charging the investor every year. This sentence was what made me think in the first place that perhaps there would be a third party backing up or taking the downside for the guarantee, in return for a fixed charge, similar to bond insurance premia charged by monoline insurers in the US. Till I saw this sentence in the above-referred example ULIP brochure:

If the NAV of Pinnacle Fund falls below allowable limits, assets will be completely reallocated to debt.
If the guarantee is to be implemented by shifting from equity to debt as the article suggests, (and also what the above example brochure suggests) then it is insult added to injury added to dishonesty. Why so?
(a) It means they are charging the investor for what the fund managers already have the right to do, viz. invest any part of the portfolio in debt. That is Insult.
(b) It means that when the going gets tough, switching to debt to contain the fallout of the guarantee is a "poison pill" that the fund manager forcibly makes the investor swallow, because it lowers the expected rate of return dramatically and reduces NAV fluctuation dramatically too. It also means that the fund managers have virtually abdicated their fund management function. That is Injury.
(c) Switching to debt predominantly to de-risk and cap NAV guarantee liability means hardly any equity exposure left.
Why should the investor pay a higher fund management charge on the now specious argument that investing in equity being riskier justifies a higher risk management charge? Worse, the fund reserves the right to increase the fund management charge to 2.5% per annum [being almost double of what they are charging today (1.35% in the example)]. All this when the investment risk is borne by the investor! That is Dishonesty. It is also Unfairness.
If, on the other hand, the guarantee is being implemented by passing on most or all of the guarantee cost to a third party, then the questions raised in my earlier blog entry remain relevant.


Monday, April 19, 2010

More on the Iceland Volcano

This updates my blog entry on Saturday, 17 April.

From the initial announcement of airport closures for 2 days, now the closure has been extended to 21 April -- a full 7 days after the volcano erupted for the second time since March. The real point no one dare ask aloud is, how do they know? The last time the volcano erupted, it continuously erupted for 14 months.  Besides, the neighbouring Katla volcano, being bigger, remains a big threat. It has erupted shortly after the current volcano in both its earlier eruptions in the past 1100 years. The odds are, that it could explode too. Understandably, nobody wants to talk much about this possibility, because the impact is too mind-boggling to consider seriously.

Now, after 5 days of ash spewing, the New York Times is tentatively speculating about how the economic fallout could hurt Greece really bad if the disruption extends into the holiday season, which could affect tourism there. A full three days after I said something similar on my blog, and four days after I actually acted on by apprehensions.

Now people have begun talking about other secondary effects -- on airline profitability, on overnight parcel delivery firms, on floriculture and horticulture product exporters to Europe, on overall productivity because people cannot get to work, and on overall health because of possible rise in respiratory illnesses. People profiting are rail, road, taxi businesses, and the hotel and hospitality industry. However, this is still being seen as a regional issue (Euro region) but it will not be long before analysts and journalists start considering it a global issue, not just because of the global warming potential with so much more CO2 in the atmosphere, but also because of the secondary and tertiary economic fallout that can be felt all over the globe, and in unlikely places. Like the fallout of 9/11 on someone living peacefully in Kirkuk in Northern Iraq.

In one of my earlier posts, I had said that I am an incorrigible optimist, but talking like this could make me sound like a perennial pessimist. This is a risk I am glad to run, for taking a long hard look at what could happen, and taking the only fail-safe option open today to a small investor with limited risk appetite.


Saturday, April 17, 2010

The Icelandic Volcano and its possible fallout

The unpronounceable and unspellable volcano in Iceland has been spewing ash for 3 days, from 5 different plumes, straight into the stratosphere.  The wind is blowing the ash, containing microscopic shards of glass, into the cruising height of all jetliners -- upto 30,000 feet. The airline schedules all over the world have been disrupted already. What are the likely secondary effects?

The closure of airports for 4 days post 9/11 offers a precedent. It created a downward spiral, catalysed US's entry into two wars in two faraway countries, knocking the economy on steroids that the US was, and still is, into a recession that lasted 2 years, and is arguably still in it.

While there are no more wars likely in a world already tired of wars, there are dangers, real ones, for economies on the brink of bankruptcy. Economies like Greece, Spain, the UK -- they are all very fragile today. The UK is going into an election with uncertainty about political outcomes.

If the airline industry reel for over 2 weeks, we might just see a couple of economies in Europe slipping back into a recession that will probably last quite a bit longer than the ash plume from the volcano.  If that happens, count on Europe as a whole being dragged into a recession, with knock-on effects on the currency rates, that will filter across all stock markets in the world.

I am very worried -- if the perception as above is shared by enough persons operating in capital markets worldwide, rcession and stock market crashes will become a self-fulfilling prophecy. I have covered myself -- yesterday I sold all the shares I held. Will wait for a month for the downward spiral to happen -- if it does not, I will re-enter the markets.

Tuesday, April 13, 2010

What is Russia up to?

I am not an expert observer of international politics, but I have a theory: countries behave exactly like individuals, especially when it concerns defence and threat responses. I therefore apply this theorem to today's Russia under Medvedev-Putin.
 Methinks Russia is hungering to get back to its pre-CIS (USSR) size and glory. Witness what it has been up to in the past few years.
  • It has invaded South Osssetia, till then a part of Georgia where Russia had always retained significant influence on the politics of. After scaring the Georgian government by advancing till the very doorstep of its capital, Tbilisi, in disregard of international noises, it retreated, but not before recognising South Ossetia as a country. Europe and US could do nothing but grin and bear it, because they had done the very same thing in Kosovo by having NATO forces "liberate it" over the head of significant international opposition, including Russia, just a few years earlier.This has given it valuable access to the Black Sea.
  • For the past few years, just before the onset of Europe's biting winter, Russia picks up and escalates a fight about gas supply to Ukraine. Ostensibly, the fight is with Ukraine, but it immediately hurts several countries in Europe who are 60-100% dependent on Russian natural gas coming through the same pipeline. Cutting off supplies to Ukraine also cuts off supplies to Europe, and all these countries then exert pressure on Ukraine to compromise with Russia as otherwise, they would have to brave biting cold wintry weather.
  • Most recently, over the last week, I think Russia has virtually "taken over" Kyrgyzstan, a landlocked CIS country that does not even share a border with it. Ostensibly, the President got overthrown by a violent "popular uprising", and a new "popular" interim government took over. Kyrgyzstan is currently in a state of lawless chaos, according to BBC. This transition to the interim government, however, has happened too quickly and smoothly to have been purely spontaneous as is being projected, and I think it was  pre-planned, with Russian involvement. Kyrgyzstan is a poor and resource-poor country, mostly grasslands and a mountain range (Tien Shan) that divides Central Asia from China and South Asia. The strategic importance is that it is mostly highlands, with the fertile, populated Fergana valley being part of South-East Kazakhstan and most of Tajikistan. From one side, the mountains look down on Uzbekistan, from another on Tajikistan, and from a third side, it looks down on China's Uighur province (where recently, Al Qaeda has reportedly made inroads. Thus, Russia's control of Kyrgystan gives them the power to make these three countries uneasy. Especially the huge country, Kazakhstan, whose capital Almaty is just 120 miles from the capital of Kyrgystan's capital, Bishkek. Expect trouble brewing in the next three years in Kazakhstan, covertly fomented by Russia. Further, another key strategic consideration: The US has a Manas air base in Kyrgyzstan that is a supply line to Afghanistan. With Russia in the saddle (albeit covertly), the future of this air base suddenly looks uncertain.
Why is Russia doing what it is doing? As I said at the beginning of this post, Imagine that Russia is a person, with pesky neighbours who earlier used to live in what was its own house. Then (pre-1989-91), it had mostly defendable borders -- which were either mountains, seas, lakes or rivers. Now, after the "partition" of the Soviet "family", they are left with several large sections of vulnerable borders that are flat grasslands. Further, several of the "black sheep" today are sympathetic to the Euro Zone, and are being actively assisted by NATO, controlled by its earlier arch-foe, the United States. This (according to a commonly held Russian belief) is the reason why the fires in Chechnya and Dagestan (both being parts of Russia) refuse to die down. Many of these countries are Muslim, and Russia is afraid of the expanding influence of the Taliban and Al Qaeda in these countries and provinces. It is therefore keen on expanding till it gets access to a natural bulwark against invasion, in the form of sea, river, lake or mountain range. This naturally means annexing rooms of its former house, which are other CIS countries.

This is also the reason it has retained Kaliningrad, a province that is separated by at least two countries' borders, that gives it access to the Baltic Sea, and a border shared with Poland and Lithuania, both part of its former influence base. That its access to Kaliningrad goes through Poland, Latvia, Lithuania and Belarus gives Russia the ability to make these four countries uneasy.
While I do not say the above is the real explanation, events happening around and in Russia seem to be broadly explained by this explanation.

Monday, April 12, 2010

Regulatory Turf Wars: SEBI v IRDA

Generally, turf wars are a bad thing. However, in this case, I am totally on SEBI's side. 

See the SEBI order here.

I have examined ULIP scheme after ULIP scheme, only to find in the fine print that the fees and charges levied by the insurance companies are so high as to be unconscionable. For example, at the end of a three-year lock-in period, even if I assume an average return of 20% per annum on money invested, I find that the NAV of the units the investor is entitled to will be barely equal to what the investor has paid in. In other words, for 3 years, the insurance company effectively confiscates all returns on investments to the extent of the first 20% per annum at least. If the return is lower than that, the investor swallows the loss, even though he has parted with a fat fund management charge every year.  

I was also sure that the commissions paid on these schemes must be very high, because none of the agents I contacted offered me a tax-saving MF scheme (ELSS) instead (mostly, insurance agents also double up as agents for MF schemes) when I expressed my dissatisfaction. Hence, I eventually preferred a bank deposit with a 5-year lock-in at 7.25% per annum compounded assured return, that also gave me the tax benefit I sought. The hook in the ULIPs is that the highest NAV over 7 years is guaranteed. The fine print here is that you have to be locked in for that whole period (at least 7 years) and the premium paid every year to insure the risk of paying out amounts exceeding the NAV on the redemption date are paid for by the investor. No skin off the fund manager's or insurance company's nose! I would like to be enlightened on which entity insures this risk., and what their capital adequacy to cover this risk is.

If MFs can make do with much lower asset management fees, with a better governed (chinese walls between AMC and Trust, separate Boards for both, etc) investment management structure, with more sensible incentive structures (no front-end commission, agency commission paid over the life of the MF deposit) I cannot see why insurance companies should be an exception to this. Especially because the insurance risk is kept to a very low figure -- for example, the insured sum does not exceed, in single payment schemes, twice the premium. In other schemes where premia are paid over several years, the insured sum cannot exceed 5 times the annual premium. In any case, linking it to the premium paid is mere semantics -- because what is being paid is nothing but an instalment of an SIP, with a minuscule proportion of the payment being diverted for insurance cost, the fig-leaf that enabled insurance companies to market ULIPs on flagrantly different terms than an MF is allowed to do. 

The biggest factor helping the insurance companies is the huge size of the market, and the sheer number of investors who would lose money if the ULIPs were banned with immediate effect -- a lot of what they have paid would just disappear, having been paid to cover sales and marketing costs, various upfront and recurring fees and charges, and the costs of unwinding if it becomes necessary. The unfairness of this would have to be balanced against allowing continuance of such hopelessly one-sided schemes. Fait accompli should not be allowed to be a defence or a consideration in the decision arrived at.

Several experts have lauded this order from SEBI. 
  • Jayant Thakur, for example, asks why the ban should not be extended to endowment schemes too, because obviously nearly 90% of the premium paid goes towards the investment corpus, if we compare it with term insurance schemes.  
  • Sandeep Parekh expresses a similar sentiment as I have expressed in an earlier paragraph.  
  • Ajay Shah has acclaimed SEBI's order for breaking the silo-like thinking of regulatory verticals -- where the IRDA regulates insurance companies, though ULIPs are predominantly investment products, and not insurance products. He also writes in today's Financial Express, exposing 3 common fallacious arguments against SEBI's intervention.
  • Vivek Kaul writing in DNA, exposes how less the proportion of insurance really is in different ULIP schemes -- approximately 1.1% of multiple premium schemes, and 0.6% of single premium schemes, if equivalent term insurance policy rates were applied to the amount of insurance cover extended.
  • Suniti Ahuja Kohli, writing in the Indian Express, points out that whatever the decision maybe, at the end of the day, it is the policyholder who stands to gain the most. She also goes on to trace the chequered history of ULIPs.
Keep your eyes peeled on this turf war. While we should regret regulatory turf wars, this kind of a war is far preferable to the kind of war seen a few years back in the US -- where both, the SEC and the CFTC eagerly disowned jurisdiction over derivative instruments like CMOs and CDOs, and the nvestment bankers made merry till the economy and the risk bubble they built up imploded.

Friday, April 09, 2010

Some Scary Statistics: Comparison with india

This has reference to my post yesterday. One reader commented that it would be educative to know comparative statistics of India and the United States to make out the difference. I thought that was a fair request. Hence, I did some quick research from the CIA Factbook and got quite a few comparisons between India and the US. The results are given below. Note especially the Foreign Exchange and Gold Reserves position and the Gini Index that shows income inequality to be more pronounced in the US than in India. Moreover, in India, there is no statistic equivalent to the mountain of $649 Trillion of currency derivatives exposure in the US, because such derivatives are not allowed in India. This is the reason India got off lightly in the credit meltdown, and the US is still struggling to cope with the impact of unwinding of this mountain of exposure.

GDP per capita (PPP) (2009 est)
GDP Real Growth Rate (2009 est)
Unemployment Rate (2009 est)
External Debt (US – 30 Jun 2009; India – 31 Dec 2009 est)
$13.45 Trillion
$223.9 Billion
Public Debt as % of GDP (US: Mar 2010@; India: 2009 est)
Distribution of Family Income (Gini Index: 0=no inequality; lower = less unequal) (US – 2007; India – 2004)
Stock of Money (M1) (US: Dec 2008; India: Dec 2009)
$1,436 Billion
$279 Billion
Stock of Quasi-Money (M2) (US: Dec 2008; India: Dec 2009)
$10,990 Billion
$853 Billion
Stock of Domestic Credit  (US: Dec 2008; India: Dec 2009)
$15,060 Billion
$1,000 Billion
Reserves of Foreign Exchange and Gold # (India - 31 Oct 2009: India’s World Rank: 4th behind China, Russia and Taiwan)
-$3,588 Billion
$287.5 Billion

# Calculated from as sum of US External Debt and US Gold Reserves. 
@ Taken from   
All other data taken from the CIA Factbook.

Thursday, April 08, 2010

Some Scary Financial Statistics about the US


Some scary statistics about the US Government’s financial condition:

US National Debt to GDP (%):                       89.12
US National Debt per citizen ($):                  41,381
US GDP per citizen ($):                               46,381
US Total Debt per citizen ($):                      180,484
US Personal Debt per citizen ($):                 53,787
US Interest Burden per citizen ($):               $1,493
US Total Assets per citizen ($):                    234,181
US Total Liabilities per citizen ($):               350,054
US Personal Savings per citizen ($):             1,558
US Median Income per family ($):                62,013
US Gross Domestic Product ($):                    14.333 Trillion
Currency in circulation within the US ($):      1.993 Trillion
US Debt held by Foreign Countries ($):         3.875 Trillion
US Government Bailout ($):                         6.387 Trillion
Currency and Credit Derivatives ($):       648.975 Trillion

When Lana Turner, famous filmstar of yesteryear was asked her age, she had diplomatically replied:
I really don’t know, because it keeps changing from second to second.

All these figures similarly keep changing from millisecond to millisecond. I had extracted these figures between 6:45 pm and 7 pm today, Indian Standard time, from here. Check out for yourself what these figures are at this very moment. 

Now, think like a banker would: If the US Government was a loan applicant, how much of additional loan would would you trust the man to service? 


Friday, April 02, 2010

Informed Critique of the Right to Education Act

Here's an informed critique of the Right to Education Act. Anyone who wants to comment on it must read this. The author has obviously read all the fine print before writing this piece.

Thursday, April 01, 2010

India: A Remarkable Country!

I recently got an email write-up (which I later googled and found was sourced from the blog authored by Sean Paul Kelley, who calls Austin, Texas his home -- here's the link).

I thought I'd write a response to it on my blog. Please do read Kelley's write-up before you read this entry.
I am an incorrigible optimist. I have a few comments that form a counterpoint to Mr Kelley's comments, that are given below. 
In addition, there has been a rabid, anti-Indian article written by Joel Stein in the once venerated TIME magazine. Here is my riposte to that article.
  • India has, in the last 15 years, pulled more people out of absolute poverty than any other country in the world. This is an amazing achievement, considering that we are a noisy democracy with millions of opinionated people who have to be heard before any decision is taken.
  • The traffic here is different - each driver has to be constantly alert and practice defensive driving, instead of blindly following traffic rules. That is the reason why we have more minor accidents, but less major accidents. Ironically, the major pileups with maximum casualties tend to be on modern expressways, where traffic follows American patterns more closely than in the cities.
  • I know that today, Mumbai is far, far cleaner than it was when I was in college -- about 25 years back. Slums are now few and concentrated in certain pockets. Even there, there are many more toilets, and sanitation facilities than before. We see far less people defecating beside railway tracks and arterial roads than two decades back, in spite of the population pressure having become much worse. 
  • Besides Calicut and Trivandrum, Mysore is probably India's most livable town -- and a town that takes pride in its heritage. It has over 300 buildings that are protected and maintained, being anything from 80 to 400 years old. I have been fortunate to have spent over 2 years there.
  • We may have more particulate matter in the air in our cities, but then that is to be expected  -- India's Top 20 cities are home to over 10% of the massive population of India. that means nearly a quarter of the population of the US is squeezed into India's Top 20 cities. If the US were so densely populated, I don't think things would be much better there. A decongestion and improvement of Tier II city infrastructure through schemes like JNNURM will hopefully change things for the better and make urbanisation less lop-sided.
  • The US mines and burns very little of the world's coal, but consumes more of the refined energy products than the next 6 countries combined, more than all the countries of the EU combined, and as much as the bottom 186 countries (out of 207 countries) put together.  No wonder they have so less SPM in the air. The US also consumes more electricity (in kwh) than the bottom 196 countries (out of 215) consume, and more natural gas (in cu m) than the bottom 187 countries (out of 211) consume. They can easily afford to do it -- they have a currency that they can keep printing and not experience inflation at home, simply because the US Dollar is still the reserve currency of the whole world. Even with this luxury, they are now at the limit of how much extra money they can print, without affecting price levels at home or the external value of the currency. 
  • Getting train and air tickets to 80% of destinations is a breeze -- with online bookings taking minutes. The exception is for foreigners -- to whom slightly different rules apply. So what? Isn't that the same in the US, where different rules apply if you are not an American or a European passport holder? Shah Rukh Khan will second this, surely. Besides, what Sean is describing is his frustration because of ignorance of something every Indian who has booked a train ticket knows -- his train number. If he does not know it, he knows where to find it --this is put up prominently near every booking counter. Or, you simply ask someone else in the queue, and they would be glad to help.
  • Demeaning India's low cost airlines is gratuitously malicious. Anyone who has experienced Indigo, for example,  will vouch for cleanest aircraft, best on-time performance, given choked airports and better service that would give even Southwest a run for their money in all these departments, if they were to operate in India.
  • My childrens' generation will find it very difficult to have domesitc servants to help them -- because the children of today's domestic help are aiming much higher, and will succeed, thanks to education and opportunities.
  • In a land where money is scarce, corruption is admittedly rampant, and is the biggest scourge currently. However, with the world-leading biometric UID project underway, once it is in place, corruption levels and leakages in public spending are likely to fall massively. When the intended beneficiaries start to more fully benefit from the spending in their name, India will experience an effect akin to releasing the handbrake while driving. Give this 4-5 years.
  • In the same 4-5 years, I have a relatively poor prognosis for the First World. They will struggle with stubborn unemployment and rising crime rates and sluggish economic growth rates.
  • In India, we do not discard a thing that works, simply because it is old. We extract all the juice, and more, out of every asset. That explains the old buses still in use. They may not be safe to run at 80kmph, but are quite safe, albeit noisy, at 30 kmph which is nearly the highest speed that they touch on Indian roads 
  • In India, almost nothing is wasted. Not your discarded clothes, nor the junk you threw out. Someone will extract some use or the other. Outdoor flex posters serve as waterproofing or as sleeping bags or blankets for the homeless. We wear warm clothes instead of heating our homes, and very few Indians ever leave water heaters or air-conditioners on throughout the day. A vast majority use two-wheelers and bicycles (for both of which India is the largest market in the world) which leaves minimal carbon footprint, and very, very few gas guzzling SUVs and 4WDs. Planned load shedding is a sign of grid discipline in the light of less supply of electricity than demand for it, and not a sign of failure of the system. Electricity losses due to pilferage are on the wane throughout India, and huge power capacities are being set up that should alleviate power outages in most of the country within the next 5 years. Grid infrastructure is also being upgraded simultaneously.
  • I am now seeing far more non-resident Indians coming back to India and far less Indians dreaming of migrating to the US or Europe than ever before. Of course, some of the recent such returns are with the intention of waiting out the recession in a weaker currency country, so their money goes further. But when they get used to a good life in India, few will have the stomach to return to the First World.
  • India has implemented electronic voting and counting of votes, for free and fair elections time and again, which even the US has been unable to do. Recall the Florida vote recounting shame in which Bush became President, effectively by a single vote after multiple recounts? The US should consider outsourcing the management of their elections to India!
  • Indian companies have gone multinational aggressively in the last 15 years, and today there are as many Indian MNCs operating in the US and Europe, for example, as foreign MNCs operating in India. Many foreign MNCs are operating in India out of strategic necessity -- they risked becoming irrelevant in many markets if they did not set up shop in India. Thus, they need India more than India needs them. Examples: IBM, Intel, Adobe, Accenture.
  • Today, in their handling of the economy, the US and Europe are doing everything that they told India (through their mouthpieces, the IMF and World Bank) not to do. Like bailing out sick companies, instead of letting them die. We now have the hilarious spectacle of European countries like Greece being scared of going to the IMF (HQ in US, headed by a European) as if it is the worst thing that can happen to them. They prefer begging from their neighbours, Germany and France, instead. Whereas, India is now a net lender to the IMF and the World Bank. The US's last two years' fiscal deficits exceed the fiscal deficits of over 125 countries in the world over the same period in nominal terms.
  • In international multilateral fora, the US and to some extent, the UK, is increasingly getting isolated. A vast majority of countries, and a vast majority of people in the countries that went to war with Iraq, did not support the unilateral pre-emptive strike on Iraq which has since been proven to be on basis of lies told to the UN. We haven't heard of any apologies or reparation for such blatant lies and disregard of world opinion that has eventually made Iraq the most dangerous place to live in, on Earth.
  • In the WTO, Brazil has been permitted to retaliate against the US's stubborn refusal to give way on agricultural subsidies by infringing patents of US companies on pharmaceutical products. In successive WTO negotiations, India has emerged as the credible spokesperson for over 120 countries while the US and a few European countries like France and UK continue to stonewall progress by their cussed refusal to remove market-distorting agricultural subsidies. 
  • As a result, almost every Arab or non-Arab Muslim in any part of the world today has no love or sympathy for the US.
  • India has pioneered the science of "frugal engineering", with cars being sold at under $3,000 profitably, whereas American companies cannot sell a car at $10,000 profitably. 
I am proud of living in India, a part of this remarkable country. I pity the Americans, who are burdened with a 2 generations-old habit of profligacy that they need to learn in a hurry to curb. 

India is also remarkable because its Prime Minister is a Sikh; till recently, its President was a Muslim and was succeeded by a Hindu lady; and the leader of the largest political party is a lady of Christian descent, with Italian parentage, married to a person born of a Hindu mother and a Zoroastrian father. Its most populous state has a Dalit lady Chief Minister. Can you imagine such religious and economic tolerance, diversity and respect anywhere in the world? This beats hands down the boast of the average American that its current President is of African-American descent.