A Tale of Two Governments Redux

It wasn’t the best of times, it is the worst of times, it wasn’t the age of wisdom, it is the age of foolishness, it was the epoch of disbelief, it is the epoch of incredulity, it wasn’t the season of Light, it is the season of Darkness, it wasn’t the spring of hope, it is the winter of despair, we had nothing before us, we still have nothing before us, we were all going direct to Hell, we are all getting very close – in short, Modi 2.0 is a neatly linear move from Modi 1.0 (further towards the unavoidable abyss).

A Tale of Two Governments (https://fiscalujval.in/2018/11/30/a-tale-of-two-governments/) compared India’s performance under the Modi government with UPA’s on a broad set of parameters including tax collections, market performance, corporate performance, GDP, foreign trade, etc. till FY2017-18. Barring Central Indirect Tax collections and very marginally GDP growth, the first 4 years of the Modi Era lagged UPA’s 10 years, on some counts by a huge margin.

Many seasons have passed since and it’d help to have another, updated look at the data. More so when the present government is keen to tout the strong ‘V-shaped’ recovery, record-high exports, record-high tax collections, and other imagined achievements.

So here goes (this time with base data sourced directly from equity databases, RBI, and ministries rather than Hindu Business Line data/graphs). Figures are till FY2021-22 except where indicated:


Commerce Minister Piyush Goyal reaches out with record-high numbers for Indian exports numbers as dependably as Mumbai locals. He conveniently omits two facts:

  • Imports are rising even faster, thus worsening the trade deficit 🤕
  • Export value is up thanks largely to high oil prices (India imports crude oil and exports petroleum products)

Here’s the comparison:

In comparison to the Modi Era, UPA 1+2 is characterized by not just higher growth rates in both imports and exports (indicating much greater momentum in the economy) but also a tighter gap between export and import growth rates, thus cushioning the INR. I seriously doubt the Sri Sris and Sadhgurus of the world will read this piece, nor will the celebs who cracked those rib-tickling fuel price jokes. Nonetheless, the abjectly poor all-around performance on this count speaks for itself and this is why the charlatans are not speaking out.

GDP Growth

The recasting of GDP data, the updated methodologies, the changes in base years…all these moves during Modi 1.0 and 2.0 were geared towards pulling down UPA era growth rates below the achieved double digits and showing current economic performance in a better light. Enough and more has already been written about these shenanigans and outright fraud, besides the objections of multiple leading statisticians and economists, so I will not add my amateur take on it. In any case, the post-doctoring numbers scream out the truth without my needing to say more:

COVID-19 cannot be a convenient excuse here because this comparison is till FY2022, which means it accounts for Nirmala Tai’s ‘V-shaped recovery’. Moreover, the previous comparison in A Tale of Two Governments till FY2018 (4 years into the Modi Era and well before COVID-19) on this count wasn’t flattering either. Finally, if the ‘beggar thy neighbor’ argument of “at least we’re growing faster than China” is going to be used then remember that China’s economy is far larger than India’s (6x nominal basis, 2.5x PPP basis) and China has pulled a far greater number of people out of poverty already.

Then again, there’s:


Despite its reactive nature, the equity market is considered a leading indicator of growth prospects. Besides, Modi’s focus on boosting self-reliance and supporting industry (well, a couple of industrialists anyway 🤷🏻‍♂️) even at the cost of all else makes this an important indicator. It also serves as a pact with the middle class who can ignore the carnage around them as long as their savings are growing. The performance?

One may be tempted to argue that end of FY2022 will make the Modi Era look poorer than it is on this count because of the recent global meltdown in equities. A couple of points to consider:

  • The meltdown is more recent. End of FY2022 was a relatively weak period, yes but far from ‘meltdown’ proportions.
  • One can also argue that the starting point for UPA in the above data (FY2005) penalizes it for the high point the economy (and market cap) was at. You can’t have it both ways, you know? 🙄

Corporate Performance

If the economy is doing well, it ought to reflect in corporate revenues. A good benchmark to achieve is annual revenue growth at the nominal rate of GDP growth (real growth + inflation).

Next, corporate profits drive valuations and this number ought to grow alongside revenues, ideally at a higher rate as businesses scale and fixed costs are spread out over a larger base. Profit growth that is out of line with revenue growth indicates either variances in costs, inefficiencies, or interventions.

Third, and most importantly, fast-growing and profitable businesses will invest in capacities only when they believe that growth prospects are favorable. Otherwise, they will payout surpluses to shareholders as dividends or buy back their equity to improve returns for residual shareholders (or simply hoard cash for better times). Hence, capex matters. In the comparison below, I have used ‘Investing Cashflows’ as a proxy for net capex. I know that isn’t ideal but in the absence of any raw capex numbers, this will have to do. All numbers are for NSE 500 stocks and FY2022 has not been considered since a number of companies have still not declared results.


  • While revenue, profit, and capex growth are clearly much higher in the UPA years (all above nominal GDP growth, which was quite high during the UPA era as we’ve already seen), the trend between revenue/profit growth and capex is more noteworthy. Despite “policy paralysis”, all-round pessimism, and allegations of serious corruption, industry seemed to have much greater faith in the economy and policy environment back then!
  • Profits growing at a higher rate than revenues (even if it was at a measly rate of 7.1%) may be touted as a positive for the Modi Era but consider the fact that this was due to the maverick, ill-timed, and completely worthless decision by the Modi government to reduce corporate tax rates besides continued cost-cutting by companies (not a good sign if it persists in the pursuit of maintaining margins)

Tax Collections

Next up, tax collections. This is an area where the Modi government is particularly fond of patting its own back. Continued growth in GST collections is one of the cornerstones of the ‘economy is great’ narrative. So how do the numbers stack up?

The gaps are large and percolate into state-level tax revenues too:

Looking at the overall picture (Central + State):

A 5 percentage point annual difference over 8-9 years makes for a substantial amount. Tax doles to corporates, slower growth rates, and a squeezed MSME/unorganized sector are all reflected in the above gaps.

Bank Credit

Finally coming to bank credit, which may be regarded as a proxy for momentum in the economy – after all, an optimistic set of people will borrow more, in’it?

Stark, to say the least. Growth rates under UPA were 2x that of the Modi Era, even accounting for the post-COVID-19 bounce back in 2022. ‘Heads I Win, Tails You Lose’ Bhakts and Nirmala Tai will of course say that the loose credit growth during UPA-2 damaged balance sheets, increased NPAs, and bestowed a mess to Modi 1.0, conveniently ignoring all the rhetoric they tout about how swell things have been since 2014 itself. Almost criminal!

Other parameters

These are just some indicators that show how starkly poor economic performance has been over the past 8+ years. There are multiple other momentum indicators that can also be used as a proxy. A few of these are:

  • Real estate activity
  • Farm income
  • 2W/4W/CV sales
  • Rail freight
  • Fuel/electricity consumption

There was a time when analysts compiled such data to figure out actual Chinese GDP growth given the legendary unreliability of rosy government growth figures. A cursory analysis of several of these indicators shows that in 2022 we are at levels seen back in 2017 or 2018 – effectively zero growth in 5 years! Unsurprising considering that a large part of India has stagnated since the 2016 and 2017 twin shocks of DeMo and a rushed/irrational GST. Unbelievable considering the official GDP growth numbers? Indeed.

Consider this – Modi’s own former CEA Arvind Subramanian hypothesized that GDP growth is massively overestimated. He compiled 17 indicators that would logically be strongly correlated with GDP growth. Anyone with a semblance of sense would expect that a growing economy will see growth in fuel/electricity/steel/cement consumption, bank credit growth, vehicle sales, air traffic, etc. Well, 16 of these 17 indicators were indeed positively correlated with GDP growth before 2011. After 2011, only 6 of them were – in other words, while GDP was growing, 11 of these 17 important indicators were negative! Modinomics!! Don’t take my word for it, read for yourself at https://growthlab.cid.harvard.edu/files/growthlab/files/2019-06-cid-wp-354.pdf

History is indeed going to be kinder to Manmohan Singh, just as he said. Something else he said is also being proven right on a daily basis:

Belief systems, narratives, and identities at work in Indian elections

March 2022 brought with it yet another ‘against all odds’ win for the BJP in 4 out of 5 state elections, including the monster win in Uttar Pradesh. This time around, opposition supporters were betting on big BJP losses in the high-octane electoral battle given how badly the central and various BJP state governments handled the COVID-19 crisis, especially wave 2 in 2021. Expectations of a BJP rout every year were driven more by wishful thinking but 4/5 against all odds was truly remarkable.

The list of reasons why BJP wins is long: national security concerns, social welfare schemes, reformist image, anti-corruption stance…more propaganda and downright gas but valid issues that resonate. And then there’s money power, of course. Plus there’s the opposition’s own listlessness with its “Modi is terrible and we are Modi’s alternative” narrative, which tells the voter what they are not for but doesn’t tell them what they are for. Yet, maintaining the narrative for over 8 years has to have a framework behind it. Here’s a thought (or rather, 1 thought for each of the last 8 years) on what has kept voters enamoured of the BJP and more specifically Modi:

1. Build & Maintain Association:

Take 2 otherwise unrelated or loosely related concepts, one that people believe in (say, ‘corruption is India’s biggest problem’) and one that BJP wants voters to believe in (‘Congress is entirely and thoroughly corrupt’). Cement the association with regular application of narrative even long after you assume power.

2. Symbolism:

Create symbols of change that pass off as unshackling, reform, and progress. This includes strategic symbols such as the Central Vista project, tactical ones such as Statue of Unity and even the Ayodhya temple as a symbol of deliverance from the decades-long Babri dispute, and even micro-tactical ones wherein the most inane of developments is played up and usurped as a personal achievement of BJP or Modi.

3. Rhetoric (+ve & -ve)

Build support for itself and its ideas by associating them with positive words like clean, secure, growth, development, inclusiveness, etc. and Congress/opposition with negative words like dynast, corrupt, slow, etc. The key here is constant repetition and reinforcement such that if a shrink were to ask you, “what’s the first word that comes to your mind when I say Congress/BJP?”, your instinctive and automatic response will be “corrupt/clean”.

4. Keeping it vague

When talking about opponents, use appropriately vague terms that cannot be pinned down or validated such as Tukde Tukde Gang, Urban Naxals, etc.

The vagueness is just as valid when talking about yourself, the best example of which is ‘Acche Din’.

5. Aspirations

Appeal to people’s aspirations and they will support you even with nothing in sight for 8 long years. Why? Because delivery has indeed been so pathetic that a wait that lasts a generation or 2 is acceptable as long as there is promise. Modi does not have to deliver an LPG connection or a functional toilet to every household to remain popular. In fact, the hedonic treadmill effect means that he SHOULD NOT deliver too well on it. Far more effective to ensure 1/10 households gets a connection – the other 9 will support the BJP in the aspiration that they will score one day. If Congress was about reform by stealth then Modi is about popularity by slow trickles.

6. Endorsement

Use known faces to make your message palatable. Bollywood celebrities, sportspersons, artists, media persons…anyone with a following and a conscience for hire should be used fully, visibly, and continually. This makes it imperative for Modi to physically associate himself with literally every achievement.

A recent example: it wasn’t enough that Modi wanted himself to be seen with the Thomas Cup winning team. The badminton players just had to say they were “proud that they have the backing of our Prime Minister” (presumably this too “never happened for 70 years”). While you’re at it, also vilify those who are not pliant.

7. Empathy

Modi has created an invaluable association with common folk through an emphasis on the poverty his family suffered, his need to start working at an early age as a chaiwala, OBC status, lack of spit n’ polish and advanced education, etc (much of it less real, more imagined). When they see him hobnobbing with world leaders (who apparently revere him 🙄) vicarious pride starts playing up.

8. Belonging & Identification

People have an innate desire to belong, to have common purpose. Show people they are participating in nation-building/growth by supporting the BJP. Understand this with the context that you are giving common purpose to a people who’ve done next to nothing in civic life till now. Network effects do the rest. More on belonging and identification at https://fiscalujval.in/2016/06/16/belonging-and-identification/

RESULT: The collective weight of this narrative setting means “Game, Set, Match, and Championship Mr. Narendra ‘Teflon’ Modi” despite propagating ‘Hindu khatre mein hain’, ‘desh sankat mein hain’, etc. while ruling with an absolute majority since 8 long years, not to mentioned unmitigated and undisputed disasters like DeMo (https://fiscalujval.in/2016/11/16/demonetization-wrong-panacea-for-the-wrong-disease/), botched GST rollout, COVID-19 mismanagement (https://caravanmagazine.in/health/four-men-covid-response), exacerbating already extreme income inequality, and so much else 🤷🏻‍♂️.

The clincher lies neither in any of the above factors or even a combination of them all. It lies in the mental association: each of the above goes towards creating a belief system in the BJP voter’s mind. A carefully, deliberately, and (to the voter’s mind) rationally built belief system in which this voter has not only invested time but has also propagated aggressively. How does such a voter then acknowledge that this belief system was built on fraud? An impossibility exacerbated by the fact that now this belief system is mixed up with personal identity (in part thanks to BJP critics who have forced BJP supporters into binaries). Thus, an attack on this belief system is an attack on the identity itself, which reinforces the bond with the BJP even in the face of personal loss, economic hardship, and more.

Short of a major exposé that leads to a mass rethink, detaching this belief system from the person’s identity is going to be a tough task and till that happens, don’t hold your breath on a BJP stumble.

A floating risk: maturity mismatch in low duration funds

“A rising tide lifts all boats. An ebbing tide tells us who was swimming naked!”

Taking on risk is a core part of investing. The Capital Market Line (CML) suggests, rightly, that the more risk you assume, the greater return you can expect. Hence, a venture capital investment would carry a much higher risk than an equity mutual fund that invests in public equities but would carry a correspondingly higher expected return. Similarly, within equity mutual funds, a small-cap fund would have a higher risk (and return) profile than an index fund tied to, say, the Nifty 50, and so on. Mismatches and wipeouts occur when investors assume greater risk for a given level of expected returns, knowingly or otherwise, and this is the balancing act that investors and fund managers undertake routinely.

Low duration funds (LDFs)

Let us look at an investment option that is way down on the risk (and return scale) – LDFs. Duration, for bonds, refers to a way of measuring how much bond prices can be expected to change when interest rates move either way (remember that interest rates and bond prices are inversely proportional, i.e., bond prices rise when interest rates fall). In this way, a bond’s duration may be understood to be a measurement of interest rate risk. Bond investors typically look at the duration of a debt instrument or a debt portfolio (a portfolio’s duration is nothing but the weighted average duration of all its constituents) to determine the riskiness of the investment. Simply put, a high duration security is high risk since it is more exposed to interest rate risk due to its longer maturity and thus ought to offer a higher return if the CML holds. LDFs invest in shorter duration securities – as per SEBI guidelines, the duration is restricted to between 6-12 months. While some part of the portfolio may be invested into longer duration securities, the portfolio should be within 6-12 months on average. This makes LDFs ideal low-risk options for investors looking to park surplus funds for a few days or weeks (LDFs provide a higher yield than bank FDs and may even be more tax-efficient, depending on the investor category) who cannot afford price volatility.

Debt mutual funds’ love for duration

G-secs (or Government Securities) are important in most debt mutual fund portfolios. In the view of the fund manager, these are risk-free securities held in a proportion that positions the portfolio to gain in response to how interest rates are moving. This is because G-secs are highly liquid and sensitive to yield changes. On Government Floating Rate Bonds (or G-sec floaters), the interest or coupon rate changes periodically (every 6 months), and these have lately been gaining popularity. With their popularity, mutual funds have been loading upon them – in the last year, with the specter of rising interest rates in response to US Fed action and rising inflation, mutual funds thought of G-sec floaters as a way to hedge portfolios against the impending rise in interest rates. How do G-sec floaters help? Since the interest rate resets every 6 months, these floaters do not fall in price as much as fixed-rate G-secs when interest rates go up because the reset will happen at the new and higher benchmark rate. This makes them an ideal offset in the scenario where mark-to-market (MTM) losses mount with increase in yields. So far, so good.

However, even too much of a good thing can be bad, as anyone knows. As is the wont of fund managers, they overindulged to the extent of turning the hedge into a speculative position, thereby ramping up risk. 

Loading up on G-sec floaters

Mutual funds have made two big mistakes in their attempt to hedge (or speculate on) rising interest rates:

1) Loaded up too heavily on G-sec floaters

2) Took exposure to G-sec floaters in LDFs, which typically should not have maturity above 1 year (regulatory requirement of Macaulay Duration less than 1 year). 

Normally fund managers have been very careful in managing LDFs and have refrained from exposure to any security with maturity over 3 years. Lately though, fund managers have gone ahead and loaded up 12-13 year G-sec floaters in their LDFs to position the portfolio for rising interest rates. But didn’t I also say they are not allowed to load up beyond 1-year duration securities, much less 12-13 year G-sec floaters!? The fund managers use a loophole wherein the duration of such G-Sec floaters is construed as 6 months (when the rates reset), making them kosher for LDFs.

Loading up on risk

The price volatility seen in these floaters over the last 15 months is to the tune of Rs 4-6, which suggests that they are being traded in the market very much like the 12-13 year bonds that they are and certainly not as 6-month bonds! To put things in perspective, in these 15 months, actual fixed rate 6-month bonds have traded in a band of 0.25-0.30% yield variation, whereas a Rs 4-6 movement in price (as seen with 12-13 year G-sec floaters) translates into a change in yield of 10-12% for a 6-month bond! Thus, prices of these floaters have traded in a band of Rs 96.5-102.5 in the last 15-18 months, which is a clear reflection of the risk these instruments carry, which in turn is a clear indication of their unsuitability for LDF portfolios.

Under various schemes, mutual funds have invested almost Rs 50,000 Crs in long-term G-sec floaters. One bank promoted fund house’s LDF has more than 30% of its portfolio in G-Sec floaters and of that more than 25% in long-term exposure beyond 5-6 years, up to 13 years. This effectively means that the scheme has more than 5 years of maturity! Similarly, many large fund houses have invested in these long-term G-sec floaters in their LDFs in anticipation of making quick gains, thus adding undue risks and exposing investors to highly volatile instruments. Here is a snapshot of just a few LDFs and their love for long-term G-sec floaters:

As of 31 Dec 2021
Scheme NamePercentage of Total Assets
Aditya Birla SL Low Duration Fund3.70%
Axis Treasury Advantage Fund3.47%
HDFC Low Duration Fund6.56%
ICICI Prudential Savings Fund40.21%
Kotak Low Duration Fund13.51%
SBI Magnum Low Duration Fund8.74%

Source: Fund house portfolio disclosures

This build-up has happened over the last 12 months. As rate hikes loomed in the face of record government borrowings, rising inflation, and expected US Fed actions, funds built exposure to floaters, which then gave MTM gains and thus better returns, which attracted more funds, which meant more flow into floaters to maintain proportions, which pumped up their prices, which…and thus was born an (in)virtuous cycle that looked like it will never end!

Until it ended

NAV gains in such LDFs came from the long maturity of the fund, which had a high spread duration creating MTM gains from spread compression. The CML is the only reality and it says there are no free lunches in the market – the higher returns come from higher risk and no other factor. That too would be fine, except that an LDF investor is NOT looking for such risk, as already stated.

RBI has now indicated a slower pace of rate hikes on the back of improved government receipts, optimism over economic growth, and rising geopolitical uncertainties. This means too many variables are at play, and a high-risk bet on interest rates (especially in LDFs) may prove foolhardy. The spreads have expanded and the cycle will likely reverse. Moreover, corporate floater issuances have climbed significantly lately – the proportion of floaters in total bond issuance has moved from 1% pre-2020 to as much as 5-7% now. These issuers obviously have a strong view that interest rates will fall. Why else would they prefer to issue floaters!?


If the cycle does reverse, then, as explained, LDFs may be staring at large NAV falls. Losses are always bad, but this is most troublesome for four reasons:

  1. LDF investors have no appetite for such losses (I know, I am labouring this point, but it is important to re-emphasise)
  2. More problematically, sophisticated investors who are more attuned to the cycle and are aware of implications will pull out earlier, leaving smaller investors holding the bill
  3. The situation will likely create a run on the fund leading to more forced selling and more losses, which necessitates more selling to meet redemptions, and more losses, and more pull-outs, and more concentration risk, and…this is the same situation we saw with Franklin Templeton’s six schemes in April 2020, which forced the fund house to close down the funds.
  4. Points 2 and 3 above have a larger implication, also referenced to the Franklin Templeton schemes – remember that large institutional investors and even some senior fund executives pulled out significant sums just before the funds closed down.

This goes back to perpetual bonds, which were once a favourite of LDFs until SEBI stepped in to protect investor interest (imagine an LDF with a mandated Macaulay Duration of 1 year happily investing in a 100-year bond!), effectively barring them from holding such bonds in their portfolios.

SEBI did not come out smelling of roses in the Franklin Templeton saga but redeemed itself somewhat in June 2021 with its two orders imposing penalties and restrictions on the fund house, heralding a new direction.

This time, can SEBI please not wait for the ticking time-bomb in LDFs to go off before acting?

52 Weeks : 52 Books 📚

2021: A Year In Books

2021 has drawn to a close. It was a great year for reading, as was 2020. This was despite increasing workload and the continued uncertainty and stress of COVID-19. Reading though was a positive coping strategy and a source of much growth 🙂.

This year, I managed to reach the symbolic target of reading 52 books (one for each week of the year). I can’t say this is a great achievement (I know people who read up to 100 books a year and heard of folks who have touched 200!) or is even the limit of my potential as a reader. Nonetheless, it is a big improvement over the past, and as Ernest Hemingway said,

“There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self.”

This small achievement warranted a short blog on tactics and strategies that helped me get here because I did do a few things differently this year. Here goes 👇🏻:

Cell phones are a major source of productivity drain, this much is well-known. Reading is an activity that is more readily impacted by cell phones because unlike work or conversations, there is nothing to stop us from picking up the phone. There are many tactics to reduce cell phone use, but here are 3 that I found useful:

  1. Notifications: Keeping the phone permanently on DND. All notifications are off except for incoming calls. Messages are checked when needed or while working on the laptop. This takes care of the issue where the impulse to check is curbed, but pings distract and compel phone usage
  2. Access: The phone is kept away at a distance (just out of reach such that I’d have to get up from wherever I am sitting to pick it up, but within earshot). I keep a single-ear Bluetooth headset next to me for incoming calls, always connected.
  3. Lock: The Zen Mode on OnePlus phones is great. For the number of minutes you specify, the phone is locked. It cannot be used for anything other than incoming calls (and taking pictures – useful for when you want to take a shot of a book’s page for sharing later). Otherwise, there is no way to unlock the phone until the set time expires – even restarting the phone will not do it 📵.

And yes, stocking ebooks on your regular phone is a terrible idea. You are not just inviting distractions into your reading time but are celebrating them when they arrive 🙄.

2021 was the year I finally overcame my mental block about digital or ebooks. Turns out, it was a silly pretense about the romanticism of a physical book and its feel, smell, and whatever else. I bought a simple, functional 10.1″ tablet on which to read. It does not have any other apps and is kept in airplane mode at all times. 10.1″ is a great size if you want something close to a large hardback’s size and are not fussy about the portability and single-hand use that a Kindle provides. Digital books helped boost reading in 3 ways:

  • Wider variety: access to many titles I was dying to read but ones that were not easily available pumped the motivation to keep reading.
  • Free: several free ebooks were eagerly gobbled up. Saved tons of money 🤑.
  • Tracking reading: Moonreader Pro on my tablet is a great app not just for organizing ebooks but for boosting productivity too. It provides analytics on the day’s reading measuring the actual reading time and more importantly, the reading speed for the day measured in words per minute. This not only kept pushing me to improve on the reading time each day but also kept me focused on making that reading time tight and productive ⏳.

Another first in 2021: audiobooks. These helped improve the books read count by utilizing various blocks of time that would’ve been underutilized or outright wasted. These are blocks in which cognitively undemanding tasks are performed – tasks like eating, shaving, long walks, etc. Additionally, time spent on routine workouts alone could also be used for books!

Tip: get a good set of bluetooth buds for this. I highly recommend either the Jabra Elite Active 75t for its comfort, great sound, robustness, and aptness for a variety of purposes (audiobooks, workouts, calls, music…) or OnePlus Buds Pro for the kickass sound quality.

Everyone knows what bookmarks are for, duh 🔖! Here’s a hack though – each time you start a reading session, put the bookmark on your target finish page. Marking it out physically gives you a visible finish line for that reading session, rather than keeping it open-ended, which usually is a recipe for distraction or laziness. Get one of those nifty magnetic ones so you can mark the specific start/finish section on a page.

One of the main challenges to reading as much as you want to is time availability and control over your schedule. Being an early riser helped me – getting an hour of reading done first thing in the morning felt great. No one’s around, it is still, quiet, and cool outside, and I couldn’t reach anyone if I wanted to and no one would bother reaching me at that hour. It could be an hour before bedtime for others. Night owls have even more opportunities to set aside a reading hour(s) than early risers.

This one’s obvious but needs to be said. Don’t go anywhere without a book because invariably there will be blocks of time, however short, when you will be waiting on someone or something. Use that time to read rather than while your time away on the phone.

Another first this year – I took a few hours to list out all the books I wanted to read. This was a pretty long list (about 60-70 prospective books), which was sure to last me at least a year. This served 2 purposes:

  • After I finished a book, I did not have to spend time wondering what I should read next, which is a trap for procrastination and indecison.
  • The long list provided an urgency to my reading effort knowing what a long way I still had to go.

Tip: Try and stick to the list as much as possible. Exceptions could be a new book you come across that you want to read right away. For this, write up your list in pencil so you can make edits when needed. Alternatively, leave some space between each entry so that a new title can be inserted when needed.

In the pursuit of “true nobility” 2022’s targets will be stiffer, that goes without saying. That motivation may lead to more hacks, tactics, strategies, and bibliomania, but less tsundoku 😏.

Humility – the inextricable cricketing quality, and its decline

Virat Kohli attracts trolls like a flame does moths. His latest: the interview wherein he shares his disappointment with ‘fans’ who trolled his “love” Anushka Sharma. Valid point on the unfairness of targeting her; the larger issue is what makes him troll-worthy and the even larger one of humility in cricket.

In defending his lover, Kohli invoked the fact (in his opinion) that “I don’t think anyone has helped India win as many matches or performed as consistently as I have in the last five years”. He then goes on to align himself with the reductionist ‘either you are with us or against us’ attitude that is so en vogue these days in all spheres: “After that, to see such reactions after just one poor innings, was very disappointing. What it does is it makes you lose faith in a lot of people. It’s a good thing in a way – you get to know who’s with you and who’s not.”. Finally he ends with a rant that does not make any linguistic or logical sense: “So in my case if I don’t do well in two games it is a dip in form whereas for some of the other players they perform two games out of ten they come back in form. I don’t understand that and I don’t really pay attention to it.” – yes, it doesn’t look like you are really paying attention to it.

Cricketing greats of yore:

When the Gavaskar and Dev era ended, Indians got a chance to align their pride and hopes on Tendulkar. He was joined by genuine greats like Dravid, Ganguly and Laxman and Kumble. Tendulkar, for all his post-retirement bravado, could never have been faulted for arrogance despite his many achievements, a quality that has endeared him to millions. Then there’s Dravid, a person who always let his consistency and technique speak for him. Be it the troll lamenting his inappropriateness for limited overs cricket or an Alan Donald seething at him on field, mouthing expletives about his mother – nothing could ruffle the man. Laxman – well he was never heard save for the crack of willow on leather. Ganguly too saved all his brazenness and aggression for the field. In all their years, none of these legends of the game needed to self-indulge.

For cricket lovers who are put off by the Australian bullies, one of the worst offenders Ricky Ponting too saved his energies for thrashing the opposition on the field and post-match bar brawls rather than telling the world what a great player he is (which he was).

A team sport like cricket has no room for individual brilliance on a sustained basis. Even the Tendulkar era was marked by at least 3-4 other players who could be considered at par with the legend. More recently, then Indian coach Greg Chappel publicly stated that Dhoni is a future Indian captain. This when Dhoni was barely a year or so into the side, had a terrible sense of fashion, could speak barely a couple of sentences of clear English and had no helicopter shot. Since then, despite controversies over conflicts of interest, his inability to establish himself as a Test Captain and accusations of favoritism, Dhoni has not had to reassert his value as a player and captain – his win record speaks for itself.

Trolls are a part of life Virat, accept them or don’t do your bit to nurture them. Much like flies, they get attracted to anything that smells bad. They have been around in various forms – the techniques have changed. Chants of ‘Ravi Shastri Hai Hai’ in Wankhede was trolling. Unimaginably, Tendulkar himself was boo’ed in Bombay once! A match at Eden Gardens is a spectacular gathering of a stadium full of trolls – who can forget Gavaskar’s hate:hate relationship with the venue? The internet and social media have just amplified the voice.

Aggression and talent can get you as far as you have come Virat. Hard work and humility will get you further, with some help from lady luck. Meanwhile, growing up is a good thing despite what many people say.

Should the undersigned now look forward to being targeted at cricket venues for choicest abuse from Virat Kohli? Nah, doing so wouldn’t be humble 🤷🏻‍♂️.

“Nothing happened for 60 years” except “too much democracy”

“A worthy end should have worthy means leading up to it”

Pandit Jawaharlal Nehru
“Philandering Nehru”

When my parents were born (one in the dying moments of the Quit India Movement, the other just a year before independence), Indians could expect to live for under 30 years on average (life expectancy of the poor being much lower) and there was practically no middle class. The literacy rate was 16% (8% for women). A starving, divided, destitute country began its Tryst With Destiny.

By the time I was born some 3 decades of mostly “Nehru misrule” later, life expectancy was 51 years, the literacy rate was ~50% (30% for women), my father was a (rare for that time) post-graduate, and my mother was a (rare for that time) graduate. Secure salaried work, a small but elegant house in a Tier 2 city, a scooter…that was how far a person born in Karachi who migrated to India just before independence and was orphaned in infancy had come. Under “Nehru misrule”. Soon thereafter, we were nestled in leafy and quiet Malleswaram in Bangalore in a neat 3BHK house and owned a 4-wheeler (an elegant Morris Minor bought 2nd hand. Or was it 3rd hand?).

old photos of bangalore
How I remember MG Road, Bangalore

By the time my own kids were born (both at the zenith of India’s growth in the 2003 to 2007 period), I was a triple post-graduate and my wife was a double post-graduate…quite the norm and nothing spectacular, and Malleswaram was neither quiet, nor affordable. Life expectancy was now 64+ years and literacy stood at 76% (55% for women). Not only did a middle class exist, but it was divvied up into the lower-middle, the middle, and the upper-middle so that each consumer class could be appropriately targeted by the plethora of brands that were at our disposal. Till this point, barring 6 years of BJP rule and a couple of years of meandering coalitions (which did not do too badly, mind you), the “cursed and corrupt Nehru-Gandhi family had held sway over the country, robbing India of her dignity, and the people of their right to prosperity!”.

The institution I completed my first post-graduate course from was set up in 1949, immediately after independence through an act of Parliament under Nehru’s plan of developing the workforce that India needed to move forward. This was followed by the setting up of CSIR, IITs, BARC, IIMs, AIIMS, ISRO, and many such institutions under “Nehru misrule”, each of which continue to either serve public interest or build careers, or both.

Apart from my anecdotal story, here are a just a few of the stark macro developments that happened in the period between 1951 and 1969 (period till 5 years after Nehru’s death, which can safely be taken as the period of continued influence):

  • 70% increase in consumer goods industries, which is a respectable for that time Compounded Annual Growth Rate (CAGR) of 3% (for those who say Nehru focused only on capital goods!)
  • 4x growth in intermediate goods production like steel, paint, plywood, pipes, tubes, etc. That’s an 8% CAGR, something even Modi would envy!
  • 10x growth in output of capital goods like like buildings, machinery and tools. That’s a 14% CAGR, something even Modi will not boast he can achieve. No, not even on a nominal basis!
  • The Green Revolution, which was the 1st (and genuine) Aatmanirbhar Bharat initiative (remember, 14mn tons of food had to be imported between 1947 and 1953 to feed the population). Yes there are folks who say Nehru focused on industry, not agriculture. And that the Green Revolution happened after his death. Consider this: the Green Revolution was not a switch thrown by someone. Apart from the specific steps initiated during Nehru’s lifetime, an important contributor to the Green Revolution was the land reform aggressively pursued by Nehru, which ended Zamindari.

Consider that this growth came about from a starting position where 90% of equipment required to make ANYTHING had to be imported. By the time I was born, that percentage had fallen to 8%! By the time my kids were born, India was exporting vehicles and launching satellites for the world!

Apart from this, on the democratic front, universal suffrage was implemented forthwith. In comparison, the US of A, a much larger and older democracy, could or would not implement universal suffrage till the 1960s. Even in 2020, black voters were susceptible to both disenfranchisement and intimidation. More starkly, American women got the right to vote a 130 years after the 1st presidential election! A 130 years! Besides one person one vote, federalism was committed to deeply and truthfully in India. This despite the fact that one giant of a man held sway over every person in the country (long before the Modi wave, all of India was a Nehru tsunami!).

So the starting position was one of disadvantage, to put it mildly. India was already committed to the paths of sovereignty, equality, and democracy. Hence, industrialisation and growth at any cost, needs of the hour though they were, could not be forced down people’s throats like China did. What India attempted – industrial transformation with democracy – was thus unique. So much so that it offered a model to many of the newly independent colonies of the world. This obsession of Nehru’s with ends AND means perhaps came from Gandhi and his commitment to HOW we win freedom. If Mr Amitabh Kant laments that this commitment to democracy came at the cost of growth then we should seriously worry about the intellect of the people heading policy-making bodies (yeah, yeah; I know Niti Aayog is only a PR agency!). Besides, Mr Kant would do well to know that the same democratic principles brought his lord & master to power. Twice.

“Immaturity is the incapacity to use one’s intelligence without the guidance of another” – from Amitabh Kant’s namesake, Immanuel Kant

Here, we hit the argument professed by the ‘nothing happened for 60 years lot’ of why didn’t India grow like Singapore. That such narratives are still held on to is surprisingly in itself – I don’t think that’s an argument worth getting into considering the size, scale, background, and constraints India faced at independence and for years after. All things considered, the statistics and achievements above show we achieved a little more than “nothing”.

Nehru’s biggest mistake was not his commitment to socialism, or China. It was his spawn. Indira was made the president of the INC in 1959, well before Nehru’s death; she was clearly being groomed for a leadership role by him. The fact that she was not made the PM right after his death is a testament to Nehru, his party, and the times he lived in. Indira was authoritarian and is directly responsible for many of the economic ills we face today. Sanjay was even worse. Rajiv was inept and is directly responsible for many of the communal ills we face today. Modi, meanwhile is both authoritarian and inept, a most dangerous combination that perhaps only North Korea would know something about.

Nehru’s spawn

Considering Nehru’s image, the genuine love people had for him, his aura, and his obvious capabilities, would India have been better off with Nehru as a benevolent dictator? I mean, considering the statistics, the lack of any real competition within the Congress, the lack of any competition for the Congress itself, and the passing away of Gandhi soon after independence and Patel soon thereafter, he could have been forgiven for assuming that holding onto as much power as possible and directing policy individually was the best course of action for India. But then, THAT wouldn’t have been Nehru.

The ultimate tribute to Nehru the democrat comes through the bizarre action of Indira Gandhi in ending the Emergency and calling elections in 1977. There was no need for that move when she was well entrenched and was considering (according to some accounts) bringing in a presidential form of government, with her at the helm. While she may have grossly misjudged her popularity by reading what the heavily censored press wrote about her, there are some who believe that Nehru’s genes and his influence on her forced her hand, leading eventually to her defeat. Mock this theory, but before that consider this: after Operation Bluestar, her Sikh bodyguards were removed because they were considered a security threat. So innate was her commitment to secularism, imbibed by her father, that she reinstated them on the basis that someone’s religion cannot be cause for removal. In hindsight, for her, it was a poor decision but one she took knowing the risks.

Nehru’s vision of India was one of enlightenment. Modi’s vision of India is one of obscurantism. We started well, then decided to tear up the user guide and proceeded with our tryst with despondency. I’ll keenly look out for the update that my children and grandchildren put up to this piece.

Aligarh: A reflection of our rotten souls


Aligarh is a 2015 biographical drama film staring Manoj Bajpayee in the lead role of Ramchandra Siras. Siras was a professor of Marathi and the head of the Classical Modern Indian Languages Faculty at the famed Aligarh Muslim University, who was suspended on grounds of morality.

The movie is a poignant and sensitive portrayal of a person’s utter loneliness that follows from what happens when his most basic defining trait (his sexuality) is held against him. Every frame of the movie is about the man’s loneliness.

Bajpayee won critical acclaim and a Filmfare Critics Award for Best Actor for his portrayal of Siras. This actor’s avoidance of stereotyping and continual experimentation probably makes him one of India’s all-time greats. More so because none of the greats have managed to avoid stereotyping the way he has.

The movie was released 3 years before the Supreme Court struck down Section 377 of the Indian Penal Code calling it “clearly unconstitutional”. The historic verdict followed a long struggle to decriminalise homosexuality in India by LGBTQ activists and human rights advocates.

While the 2018 verdict was a cause for celebration, I felt that there was a certain futility in striving for the revocation of Section 377. Watch the movie to realise that homosexuality not being regarded as a crime will only be the start of a long and difficult struggle for acceptance of a people who are otherwise no different from “normal” ones, and the extent to which they do differ is less than harmless once you get over conditioning-fed biases.

As if to prove the extent of the struggle involved, here is the Central Government’s submission to the Supreme Court on 14 September, 2020, two years after the repeal of Section 377:

The bias stems from perceptions of homosexuality being “unnatural” and even “a disease”. Sample what prominent bigots currently in power had to say when P Chidambaram (then Home Minister) and the UPA government pushed for repeal of Section 377:

Needless to say, religion and a need to pander to it for political gains is the source of the bigotry. Section 377’s potential repeal offered a rare opportunity for all religions to come together in an unparalleled show of unity:

And it seems extremely rich for a lot that doesn’t give a damn about nature to label something unnatural. For me drowning a good 18-year old Single Malt Whisky in Duke’s Soda (a very common crime, especially in India) is more unnatural than homosexuality! This despite being a lifelong heterosexual with a wife and two kids, a.k.a. the stereotypical Indian ‘normal’ male.

What that doesn’t make me in any way though is insensitive towards someone who isn’t like me, especially if he/she is an oppressed minority. Periyar said it, only as well as he could:

No description available.

If you aren’t “like that”, give up the despise, the hatred, the bigotry…it will be one less negative emotion in your life.

Coming back to Aligarh, the movie.

The Indian release in February 2016 came nearly 2 years into the term and at the zenith of the right wing led government, which panders to the kind of religious bigotry that opposes homosexuality. Besides this, their supporters are known for strong arm tactics that criminally prevent dissemination of anything they disagree with. Considering this, it was widely expected that the movie will be banned in BJP-ruled states and movie halls screening it anywhere else will be intimidated by party workers. Yet, nothing! The release went off peacefully. As for commercial success, as would be expected, the movie did not fare all that well collecting ₹4.27crs against a budget of ₹11crs.

Spoiler alert follows:

My theory on the absence of any protests by the right wing loonies against Aligarh, despite their public disgust with homosexuality, is that they knew it is a true story in which the protagonist kills himself in the end. ‘The evil of homosexuality is vanquished in the end and not victorious so people can see it’…so went the loony fairy tale ending.

Rather, I feel these blinkered souls who see the world in only 2 shades should be made to watch the movie. Watch how the world comes together to harangue a perfectly harmless and sensitive man into killing himself. Bajpayee’s performance, the gritty shots, and the knowledge that all of it actually happened to a person possibly have the potential to change the train of thought of at least a couple of bigots, surely? If it does then Aligarh deserves the highest accolades.

At the time, Modi’s Teacher’s Day Address was making headlines, mostly for the wrong reasons as over-enthusiastic and pandering school/college principals made attendance compulsory for kids. I’d rather they made Aligarh mandatory viewing in every secondary school, college, and RSS Shakha.

Watch Aligarh if you are sensitive towards LGBTQ rights. Watch Aligarh if you don’t give a damn either way, because you need to give a damn. Watch Aligarh especially if you are a bigot, because you are the one with the “disease” and a watch may just make a tiny difference.

‘Only The Good Die Young’


June, my dearest, passed away 4 days ago. The suddenness (where it all happened within a few hours), the timing of it all (when the world is going to shit), the unfairness of it all (when I need her more than ever), her youth…all of it makes my head spin and my heart break.

She came into our lives almost 5 years ago in, well….June. Hence the name. As amateur first-time dog parents our lives were turned upside-down dealing with a creature that could say so little while saying so much.


She was a gem from the beginning – all the innocence of a puppy, and yet so mature, undemanding, trouble-free, and caring. It was almost like we had got an adult dog in a pocket size.

Over time, she became the center of everyone’s attention, the apple of everyone’s eye, and every other cliche you can think of. To the extent that a person who detested and feared dogs became a full-blown, loving, caring mother to a daughter she never had. The bond between them was something that could be seen in any captured or uncaptured moment between them. I loved June, and June and Arati loved each other 😀


June was a dog who naturally or through perception (and for better or worse) grew to reflect what I am as a person. Someone who did not need validation, someone who didn’t care about stereotypes, someone who didn’t suffer fools, someone with limited priorities and no care for anything beyond, and someone who was happy within the self (and yes, a little happier still when we were with each other). True soul mates in that sense! Despite all her aloofness, anyone (human or canine) who got to know her had nothing but admiration and respect for her. How often do you see that?!


As is human nature, at such a time we look upon the time spent together with a tinge of regret – we could’ve played more, we could’ve headed out more, we could’ve not given as much of a damn about what we ate, we could’ve done more. Then again, we could see every moment as enriching, full of learning, full of satisfaction, full of innocence. June brought us, as a family, out and about to the kind of places that this country – with its limited tolerance for animals – allows animals in. Hills, beaches, forests….all the places that make us, animals and humans, one.

Perhaps three of the most important lessons June had for us were:

The last one is obviously a great quality. However, it can also prove to be one’s undoing especially for someone who could not voice out her pain. In the end, whatever was slowly creeping up on her from within was something she was making her peace with in a manner that we humans with our limited perception cannot fathom.

Despite everything she may have been suffering from, her last few weeks and days were filled with more exercise, more fun meals, and more time with loved ones thanks to the lockdown. If we want to get all philosophical and seek some consolation in the tragic loss, then we would feel good about all this. Yet, there is nothing to feel good about. There is only an emptiness. One that comes from losing not just a family member, but a soul mate. Someone who gave our fickle and boring lives meaning, even by just lying on the floor (and occasionally on the sofas) sleeping 16 hours a day given a choice.

If there is anything to be had from such a heart-breaking event it is that:

  • Don’t take anyone or anything for granted. Live for the here and now because there may be no tomorrow, and the past doesn’t matter as much as you think it does. You may not get a chance to try on that new dress you are saving away, to make that phone call to a friend you’ve been putting off, to say sorry to someone you disappointed, to try something new, to go out and play with your soul mate…..that is what dogs do, and something we ought to do more of.
  • If you have a dog, trust neither your instinct on anything new she suffers from nor prior data on past sufferings. Err on the side of caution because like I said earlier, they won’t let you know till it is too late.
  • Despite everything, and you may not admit or realise this, your life is incomplete without a loving, caring, trusting dog.

Goodbye June….doggy heaven must be full of tennis balls to chase and bowls full of ice-cream.

IMG_20200106_210259_01 (1)

(This was written in a hurry while most of me was still in shock. I have not bothered to rewrite it yet, and may perhaps never. As crude and hurried as it may read, I don’t really care)

A Tale of Two Governments

img_20181130_081650013(Source: Business Standard)

It was the best of times, it is the worst of times, it was the age of wisdom, it is the age of foolishness, it was the epoch of belief, it is the epoch of incredulity, it was the season of Light, it is the season of Darkness, it was the spring of hope, it is the winter of despair, we had everything before us, we have nothing before us, we were all going direct to Heaven, we are all going direct the other way – in short, the period is so far unlike the previous period, that some of its noisiest authorities insist on its being received, for good or for evil, in the superlative degree of comparison only.
(with due apologies to Mr Dickens).

Much is being made of the recasting of GDP data. Conveniently, UPA-1 and UPA-2 period growth rates have come out trending lower than earlier published figures. This puts an end to the claim of double digit growth during the UPA era.

Without getting into the statistical jugglery that has facilitated this downward revision, lets focus on real life indicators that are less easy to juggle (read, fudge/obfuscate/fake/manipulate/doctor/massage), in addition to GDP growth. Growth in:

  • Sensex (presumably growth and growth prospects will eventually reflect in stock market sentiment, and thus performance)
  • Corporate Revenues (if there is growth, companies will sell more, na?)
  • Corporate Profits (if companies are selling more, they will earn more, it follows)
  • Corporate Capex (if they are selling and earning more and they believe growth is secular, companies will invest more),
  • Exports (non-oil) (how competitive the country is globally),
  • Imports (non-oil) (the resources a growing country needs in terms of raw materials, equipment, etc)
  • Central Direct Tax (growth results in earnings, earnings results in taxes),
  • Central Indirect Tax (consumption and investment driven growth leads to higher indirect taxes)
  • States’ Tax Revenues (what is good for the consumer/investor is good for the local government)
  • Bank Credit (a growing economy needs bank credit)

This is a universally acceptable list of real world indicators, perhaps even for blind as bats and bat shit crazy Modi Bhakts. So let us begin.


A 4.5 percentage point difference in returns over a 5 year period means that for every Rs100 that you started with, you were better off with the UPA (Rs198.53) by 22.2% compared to the NDA (Rs162.52). Multiply this difference over the entire market capitalisation of the Indian equity markets (US$ 2.18 tn) and you have a HUGE hole thanks to lower performance.


Over the long term (and assuming things are going well), one would expect corporate revenues to grow at the rate of nominal GDP growth (i.e. real GDP growth rate + inflation). As a thumb-rule, 10% is considered to be a good yardstick given around 6-7% real GDP growth and 3-4% long-term WPI. The 10 year UPA era saw growth that was nearly TWICE that thump-rule while the Modi era has seen growth of half the thumb-rule. If growth rates are indeed higher post UPA then it isn’t clear who is growing.


Revenue is vanity; profit is sanity. Moving beyond topline growth, corporate profits reflect the policy environment, growth prospects, and sentiment even more strongly. Here, the difference is even more stark with 13.2% profit CAGR in 10 years of UPA compared to a -1.8% CAGR (basically, stagnation) in the 5 year Modi era. This is thanks to misadventures like DeMo, a hurried GST, currency volatility, policy ambiguity, inadequate attention to bank recap, belated realisation of the extent of the bank NPA problem, and a host of other governance failures. Absence of profits mutes employment generation, capital investment, R&D spend, CSR, etc.


As expected, the muted growth is resulting in lower corporate capex, forcing the govt to step in with expanded public sector capex. This exacerbates the deficit situation, resulting in higher inflation, a depressed INR, and a classic chicken and egg situation. More so when the public sector capex is directed at wasteful assets (such as statues).


Non-oil Exports growth rate that is a 10th of the UPA era growth rate! Seriously! A 10th!! Despite all the valuable (expensive!?) relationship building through foreign trips! Make in India, Start Up India, Get Up India, Sit Down India, Go to Sleep India! The consumption lever isn’t working, the investment lever isn’t working, and the exports lever clearly isn’t. Perhaps Modi can invent a 4th GDP growth lever!


The story with imports is a similar one. The modest 5.7% growth that is seen here is also largely thanks to consumption oriented imports. This has exacerbated the INR’s fall and worsened the BoP/CAD situation, if nothing else. Cheap and easy consumer credit (apart from data) is the opiate of the masses, clearly.


Direct tax growth is a reflection of growth in personal income and corporate taxes. The difference in growth is stark. Even more so when you consider that ITD scrutiny has increased post DeMo, compliance has gone up, and there are more people filing ITRs. Despite this, there is a 10.7 percentage point difference in direct tax collection growth rates!

Indirect tax growth is the only area where the NDA area outshines the UPA era. No surprises here. a) GST has led to greater compliance; b) excise duty on fuel has been increased to a level where it is burdening the economy, thus increasing collections. Not much for the Modi govt to take credit for here.


State tax revenue growth is lower in the last 5 years than in the 10 before that, though not by much. Given that big ticket items like real estate, fuel, and liquor have been left out of GST, this isn’t surprising. In any case, the stagnation of state revenues also points towards lower growth rates, which is the moot point.


Finally, bank credit. All the moderation in revenues, stagnation/degrowth in profits, lower sentiment, volatility, indebtedness, etc. is reflected in the reluctance to borrow to expand. 9.8% is below nominal GDP growth and is much less than half of the UPA era credit growth rates. Modi/Jaitley in their ‘Heads I Win; Tails You Lose‘ approach will claim that there was profligate lending during the UPA era, which led to the NPA problem. Simultaneously, they will pressure/bully the RBI to relax the PCA restrictions on banks – which have been put in place to control the problems on hand – so as to push credit (push credit on to who? Who wants to borrow?! And for what?!).


Headline GDP and Ease of Doing Business Rankings – the two pet obsessions of the Modi/Jaitley combine – have only led to a reverse goal seek exercise. And this may be what this 5yr period has been all about. Just that much, nothing else.

Ok fine, a couple of statues too.