Uttarayan


India is today celebrating Makar Sankranti and people are wishing each other on this auspicious day. This auspicious day is celebrated in different parts of India in different ways such as Lohri, sankrant, kite festival etc. It is also celebrated as Uttarayan, a six month period considered very auspicious and in which Bhishma Pitamah, a great warrior in the Greater India war (Mahabharata) chose to leave his mortal body. However while it is a fact that Uttarayan was once coninciding with Makar Sankranti (the point in the celestial sphere when earth enters the zodiac sign of capricorn) it is no more true in our times.

Uttarayan is made up of two words – Uttar (North) and Ayan (motion). It can mean one of the two things either movement in north or movement towards north. However the current makar sankranti is none of it and therefore does not qualify to be Uttarayan.

So lets understand it from the motion of Sun as seen from a given point on the equator. From the horizon where when the Sun rises, it can be understood to be in the north and when it sets it goes to the south. However, the direction of Sun’s motion is northward from midnight point (under our feet) to the noon point (zenith) above our head. From noon to midnight the sun starts descending and becomes southward and finally goes into south while it sets on the horizon. This analogy was given only to explain those who are not very familiar with celestial terminologies. In the celestial plain something similar happens. Lets understand it.

Due to the axial tilt of earth celestial equator cuts the ecliptic on two points which are exactly
opposite each other. These points are called as vernal equinox and automnal equinox. Vernal equinox falls near 21st march and automonal equinox falls near 21st september. These are also the times when days and nights are equal on the equator. Both the ecliptic and celestial equator forms an angle which is equal to the tilt of the earth i.e., 23.5 degrees. In the celestial plain the earth is on the north of the celestial plain from 21st march to 21st september with the point near 21st June being the highest altitude. 21st June is also the longest day and is called summer solistice. From Summer solitice the earth starts descending towards south and cuts the celestial plain on 21st september when it enters south of celestial plain.

Now the question is why there is this misconception on Uttarayan. The answer is that the equinoxes are moving clockwise at a rate of 50.8 seconds per year and in 70.8 years they nearly make a difference of a day. So every 70.8 years all the four points mentioned above i.e., vernal equinox, summer solistice, automnal equinox and winter solistice will move a day backward. So nearly 6360 years later the winter solistice that today falls on 21st december will be on 21st June which will become the point of shortest day.

The question therefore is whether Uttarayan is the six month period of northward motion which is between winter solistice of 21st december to summer solistic of 21st June or Uttarayan is the motion in the north which is from vernal equinox when sun actually enters into the northern zone and remains until 21st september which is the point of automnal equinox. Scholars like Bal Gangadhar Tilak have advocated for the later which is the motion in the north. To me while it looks more logical, I leave this artical open ended to elicit more views.

The medieval period or the dark age of India was known for the destruction of vast amount of knowledge base, libraries, scientific research etc. Ancient India was full of astronomical observatories, ruins of which we can still find at various historical places. The purpose of these laboratories was to carefully observe celestial objects and correct the periodical anamolies of time. That however ceased to happen with series of external invasions by barbarians and thousand of years long struggle for the survival of the civilisation. The time has now come when serious research on ancient Indian civilisation must be done for the greater benefit of humanity.

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I was in a dilemma many times to support Arvind or not but given his committment and personal sacrifice I was willing to trust him as a common man. However a series of gaffe, a rigid – ‘my way or highway’ approach,  an unplanned agenda with only one focus i.e, to be in the driving seat, has convinced me that he is not the solution and infact he is at best a roadblock.

When one thinks big and thinks for a holistic change he cannot remain unprepared and without agenda and ask for opportunity to govern. The ideal of Swaraj may have been an worthy goal but without an action plan to achieve it, it is another lolipop like Ramraj. Arvind may have had right intentions (although today I am not fully convinced about it as well) but never had a clear thought process which has lead him to make several U turns. He should have been clear right from the begining on what he had wanted. If it is good governance then he should have executed that when he got oppportunity to govern. If it had been the change in system then he should have done a proper homework. No doubt that he was not having enough powers and he even did not have the status of a full CM that other state’s CM enjoys but the choice was his own. When he choose to make Delhi as his launching pad he should have thought about what will be his delivery milestones and how will he achieve it. He had done no homework. I also found that criticism valid that he had actually leveraged on the movement of Anna and Ramdev.

It must not be forgotten that the founding movement of IAC had Baba Ramdev at its forefront followed by Anna Hazare. Both April and August 2011 by Anna and 9th August 2012 movement of Baba Ramdev were remarkable and had pulled huge number of people on the roads. During August 2012 also Arvind had ensured that Anna and Baba do not jointly launch the protest on same date. I had asked this question in the NRI conference call that when Anna has announced that both Baba Ramdev and IAC will fight for change together then why the protest movement is starting on two different dates. I did not get a convincing answer. When after 4 days they unconditionally stopped the protest without consulting Baba Ramdev they had almost gave government a boost to their morale and put at risk any future movement for change. Had it not been the charisma and committment of Baba Ramdev, his protest was settled before it even started.

True that Arvind has shown an exceptional level of committment. But for what – power ? There were other committed and honest individuals who had the same committment and ability such as Anna, Ramdev, Kiran Bedi etc. They were rather doing a practical planning to bring change by encouraging / pushing the less corrupt establishment. BJP for example was pushed by Kiran Bedi during Aug 2011 to break the deadlock. Khanduri of BJP even accepted to implement Janlokpal in toto in Uttarakhand. BJP had shown a willingness to support the cause and by mobilising public pressure BJP could have been forced to support fundamental path breaking out of the box decisions.

Further while I agree that most of the times political opponents try to slander image by raising unnecessary and irrelevant issues but hasn’t Arvind himself has brought him to that level. What evidences he had before he blamed Modi for Muaffarnagar riots. His ticket selection process is 100% based on same factors that other political parties adopt i.e., cast / relegion based. Further his ticket selection process or direct democracy in his party is just a mockery as all decisions are announced in advance and further only ratified by the party. For example Kumar Vishwas’s announcement to fight from Amethi to several other bigfaces whose names were announced first and ratified later.

What Arvind should have done is to join and help the forces of change and fight the battle together. Argue and adjust with other points of view but stay together. Mobilise public for issues and leverage on the existing setup of less corrupt political parties. Goal should have been to make change in system and not to be in Governance.

My Questions on FDI


Following are some questions that I had asked to Vivean Fernandes in the chat organised by CNN-IBN on its website IBNlive.in.com

http://ibnlive.in.com/chat/economic-policy-editor-cnbctv18/has-manmohan-singh-been-a-weak-prime-minister/1193.html

Q. When FDI comes in they buy rupee and it goes up. So far so good. But what will happen when these companies will cash in profits and take dollar out. What happened to 1997 asian tigers crisis. Do you not think currency will eventually be doomed because of this decision of FDI? Specially because we know this money will be used for consumption and not infrastructure development Asked by: Amitabh Pandey

Ans by Vivean: Foreign discount stores will source locally (so that the products they sell can be affordable). For that, they will have to upgrade the quality of locally-produced stuff. Look at the design and workmanship of Ikea products, and look at the quality of our own furniture. When Ikea comes to India it will help its suppliers to produce higher quality goods. These goods will then also have a chance to find export markets. So by allowing foreign discount stores to sell here, we will be able to sell more abroad! For an analogy, just look at the automobile ancillary sector.

Unanswered follow up Question:  If that had been the case, our exports by now after 20 yrs would have surpassed our imports? Proof the pudding lies in its eating, isn’t it? But on the contrary, we are still looking for debt to finance our imports and our trade deficit is exponentially growing. Regarding technology, how much manufacturing growth has happened due to import of technology as a result of FDI? Instead, unlike China, its only services where bulk of our growth belongs to. In fact the only way we got technology was when we invested in research e.g., cryogenic engine, our space and missile programs etc. And on the automobile and ancillary growth, the consumption has been propped up by easy money policies of government where inflow of new money (to a certain section of society) was actually performing a theft on the purchasing power of real wealth generators (read farmers, workers etc) of the economy.

 

Q. 20 yrs of PMs policy and we are in greater debt, exponentially growing trade deficits, BOP crisis again staring us and lower currency value leaving less room for government intervention through QE / stimulus? Do you not think we have been spending debt money on consumption? And this is a failure of PM and his economic policy? Asked by: AP

Ans by Vivean: 20 years of Manmohanomics have also given us 6 percent to 9 percent annual economic growth rate, the fastest reduction in poverty in our history, well stocked shops, the possibility of owning a house well before one’s retirement and also hope for our youngsters. We need more of Manmohanomics and not less.

Unanswered questions:

Q. 20 years of Manmohanomics have also given us 6 percent to 9 percent annual GDP growth rate but that is propped up by debt. 20 yrs of manmohanomics has given us record number of farmer suicides, Forex equals to external debt, exponentially growing trade deficits, higher inflation, BOP crisis staring us, greater rich and poor divide and greater disparity in the economy. Don’t you think your argument of GDP growth is meaningless with all this and 90% debt to GDP ratio? Does GDP take into account a country’s debt? If I get a natural calamity, will the money I spent for rebuilding not show the GDP up (“broken window fallacy”)?


Some economists have been expressing apprehensions of US and EU using India as an external markets to avoid the debt crisis they are facing. While the possibility of India accepting such a proposal is very high because Indian Government desperately needs more debt to meet its exponentially growing fiscal deficit and falling growth, I am convinced that even such a move will not help US and EU in avoiding the ongoing debt crisis and I also believe the current crisis is unfixable now within the framework of current financial system.

The author of one such post I read a few days back says that if India is used as an external market, even a billion dollar that is sucked out of the country can create 20,000 jobs in US and EU. But that will also mean a contraction of 60 billion dollar in India. This is because the velocity of money (money changing hands from one person to other person) in india for $1 is $60.

However, while the billion dollar per se is not even a peanut in the development plan of the economy of the size of US and EU but the key point that needs to be understood here is that EVEN THIS BILLION DOLLAR WILL NOT CREATE ANY PRODUCTIVE JOBS IN THEIR ECONOMY. The reason is that it is not absence of market or consumption that is preventing job creation but due to debt becoming difficult, the jobs sustained on borrowed money are reducing. US and EU DO NOT NEED ANY EXTERNAL MARKET, THEY ALREADY HAVE A HUGE MARKET IN THEIR OWN COUNTRY and that is why they have such a huge trade deficits. The demand contraction there is NOT due to surplus production which requires external market for consumption and to sustain production and thus employment in the economy. The Demand contraction there is due to debt restriction because it is debt which has enabled most of the jobs in these countries and which are in the service sector. These jobs in service sector are creating more consumers and in the absence of required production, the country in increasingly depending on imports thereby increasing trade deficits.  Infact, in this era of easy money, the only thing governments do is to create money from thin air and flood the economy with cheap money without bothering if there is enough production to meet this propped up demand. Often lack of credit in 1930 depression is cited as an explanation on why credit is required, which is though true yet ignores the fact that the economy was productive at that time and running massive trade surplus. Here the situation is different. The economy is not producing and therefore running massive trade deficits to meet the demands propped up by phony service sector jobs. They started abjuring production after WW2 and eventually (in 80s) manufacturing was outsourced to China and Services to nations like India (remember the “buffalo to banglore” catchwords). By selling there cattles and farms, they have made huge money but who is the beneficiary of this globalisation? It is not the common people but the 1% rich, banking and corporate cartel. It is this greedy 1% that is stealing jobs from US and EU citizens.

All this while, when the citizens of these debt-ridden countries were enjoying debt financed prosperity, their economy was not producing. However because of the past credit worthiness, countries like China, Japan etc have not only been providing them goods but also the proceeds from the sold goods are being invested in buying government bonds. Now the problem is that these debt ridden countries like US and EU do not have enough manufacturing left, so the increase in jobs are only taking place in the service sector which means people consuming more. And this consumption is further increasing trade deficit and in turn debt.

Now the problem is why can’t we maintain a certain level of deficit and avoid a collapse? So it is around 1 trillion USD for US which China and Japan and US bond holders, QE etc all together are able to fulfill then whats the problem? First of all, same deficit each year does not mean same level of debt. Deficit each year gets accumulated and increase total debt and growing debt means growing interest payment. So maintaining same level of deficit means increasing interest payments. Secondly, the greedy corporate cartel has an obsession with growth. And the moment growth stops they start throwing people out starting reverse multiplier effect and a slow down (resulting in mortgage defaults etc). THEREFORE EXTERNAL MARKETS ARE NOT GOING TO HELP THEM. If they at all need market then they should focus on domestic market to reduce their trade deficit.

India, per se however may likely to do all wrong things as far as this UPA2 government is there and I strongly believe they will offer India as a market to US & EU, resulting in an inflation explosion because when foreign companies will start sucking out their profit, rupee will further get devalued and inflation will skyrocket. The Indian government anyway have no option but to seek more debt (to postpone the crisis) else the austerity measures will eventually result in liquidity crisis and bank collapse.

For the readers of this blog I would like to share following two very good videos to watch.

Unfixable by Chrismartenson: http://www.youtube.com/watch?v=8WBiTnBwSWc

Tony Robbins on magnitude of debt: http://www.youtube.com/watch?v=jboTeS9Okak&feature=share


Free-markets capitalism, supported by Austrian school Institutes like Mises and Marx’s communism are two poles apart philosphies, which are basically an extension of individualism and socialism respectively. I stand for socialism because I believe, in individualism human beings compete with each other and in socialism they compliment each other. I believe (and I may be wrong) that individuals in a society are not free to pursue their interest because they are also tied to other people’s interest. So, imagine we all are tied up as in a three-leg kind of race. Imagine 100s people all tied up in their leg with each other. Imagine if you ask them to run and if they all pursue inividual goals (read interests), will they achieve it? The answer is no. Now if these people adopt greatest common good as the target and instead of competing, compliment each other, towards a common goal, it is a win-win situation.

Today, we are neither true socialist nor true capitalist. Infact this dangerous cocktail of socialism and capitalism can be at best called as crony capitalism which is as dishonest as Russia’s authoritarian communism or China’s authoritarian capitalism.

If the true capitalism (free markets) had been adopted, it would have shown its ugly face much earlier as the market dynamics would have unambiguously resulted into a great depression with end of road scenario. The whole credit would have got centralized in the hands of a few people whom marx called as “bourgeoisie” and without new markets (read exploitation and generating poors) created either by an act of war or coercion, capitalism could not have continued.

The capitalism would have died in its naked form as people would have understood the futility of a capitalistic structure which has anti-spiritual (anti-dharma) foundations and as such it is inherently faulty. In marx’s words the seeds of distruction of capitalism is in capitalism itself. No wonder why the great leaders of our independence from Hindustan Socialist Republican army (Chandradekhar azad, Bhagat Singh etc) to Subhash Chandra Bose, all had a vision of true socialism or as pandit Sri Ram Sharma Acharya, a great seer sage and visionary of our era has described, ‘spiritual communism’.

Arvind Kejariwal in a recent interview to “chauthi duniya” very beautifully described how our ancient economic model used to be until 1860 which was a real democracy and which Gandhi ji called as Gram Rajya. It was a decentralised model of ‘society owned means of production’ and ‘local governance’. That I believe will be the economic model in the future after the coming economic collapse and that will pave way for the golden age.


The recent controversy on the Army Chief’s age clearly reflects a failure of bureaucratic system in the country. Going by the evidences and facts in public domain, (Source: Hindustan Times,date 17th Jan 2012, page 10, article: “Error in UPSC record was a clerical error”: quoting the petition of Army Chief) the anamoly first came to light when UPSC sent a clarification letter to army chief’s father who within 9 days submitted correct age and all supporting documents. Whatever an ordinary citizen could do was done at that point itself. Is it reasonable to expect an ordinary citizen to run from pillar to post and owns the responsibility of getting every register changed in every department of which he is not even aware about. Not only this, the Army’s official record keeper AG Branch had also corrected the anomaly and for all his service until 2006, his correct DOB 1951 was used. Therefore this contention that he has not got the DOB changed earlier and have been using it all this while is totally false.

However the babus are a tough-nut to crack and as they always do, fail to correct it even when contested. The question is why when the anamoly was rediscovered in 2005 and when the MS branch was requested to reconcile with AG Branch and correct it, that didn’t happen? Now its being said that he is not an ordinary citizen and therefore should not go to court. First its a matter of principle, second when babus can do such a grave injustice to no other than army chief, a plight of common man is not difficult to understand. Army Chief’s going to court only exposes how babu’s work and how common man suffers in babu-raj.

Further, the decision by Gen VK Singh to  fight for what some believes a minor issue is a matter of principle. Gen VK Singh had also described and called this a personal matter while it is not. This matter is of interest to the society as it highlights how difficult it is for an individual to get things done through the bureaucrats. As it is said, if your neighbors house is burning and you are sleeping then you are next.


One wonders if he should be happy or sad with the govt’s decision of allowing FDI in retail. The decision marks a sad day for the country but happy that it will hasten to conclusion the obituary of reforms and reformists thus paving the way for a new beginning.

FDI is another form of debt that will attempt to temporarily avert the crisis of falling rupee and rising inflation but alas! only at the cost of greater future pains. FDI gives us capital account surplus, which is a liability. It is a debt which has to be paid back. We have been using this money on capital account not to open factories but to pay FOR OUR IMPORT BILLS because we are a trade deficit (Import > exports) nation. Now when FII’s starts cashing in their profits and pull out from markets, we need to pay them back their money. The point now is that how do we do it? Because we are a trade deficit nation (read it as a poor nation) , options available before us are fairly limited.

1) by raising more debt either by selling our assets or interests to FIIs and asking for investments

or

2) by taking loans from IMF, World bank etc which also we have been doing aggressively last few years.

Any 3rd option of meeting this pull out demand from current account, which is possible for a trade surplus country like China has, in not available to us. From the last 2 decades, we have been adopting both methods to pay our rising import bills and enjoying this debt financed prosperity. This exposes how successful these reforms have been all these years. Recently, we saw another example of how hollow and dangerous this debt financed growth has been, when our rupee was in free fall a few days back and have reached all time low and RBI was scared of intervening due to lack of reserves. The reason was that our foreign exchange reserves is close to external debt. So what good FDIs have been doing in last 20 years? It has made us no wealthy a nation but one that is more on debt than it was earlier.

Wallmart is not here for charity. All it will do is to kill our entrepreneurs and create a few slaves with lesser buying power. It will take the profit out thereby increasing the outflow. When it will do that, rupee will fall and our import bills will drastically rise. On top of it, massive unemployment, that it will cause will mean less purchasing power with people therefore low production. And eventually after sucking the nation when these foreign firms will shut their shops and move out, we will face the same consequence as southeast asian countries had faced in 1997 during the asian tigers crisis. Our rupee would have been devalued to a greater extent thereby giving way to rampant inflation marked with low growth, and massive unemployment. This STAGFLATION causing series of unrest, anarchy and chaos will be the order of the day. That surely looks like the trend unless some intervention saves or change the course.

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