Needed - some Simple Answers !

This is with reference to the controversy surrounding the pricing of KG-6 gas of Reliance , which started with $ 2.4 , is currently $ 4.2 and slated to rise to $ 8.4 / unit , from April 2014

Writing in yesterday's Times of India , ( Swaminomics ) , eminent economist , Swaminathan Anklesaria Aiyar , made following points  :

>   Reliance ( KG - 6 ) accounts for only 10 % of the gas production in our

     country . Balance 90 % is by Public Sector Companies such as ONGC etc

>   Hence , any increase in selling price will mostly benefit government itself

     ( Any idea , what will government do with this windfall  ? )

>   Price - hike envisaged is recommended by a committee headed by Mr C

     Rangrajan  ( - implying , infallible / sacrosanct  ?  )

>   By introducing price control on gas , " India's name is mud globally , and

     top exploration companies now avoid India "

>   An economic rule of thumb is that " traded Commodities " should be

     priced on par with the import price ( my question : irrespective of the

     actual cost of production in India ? )

     The Rangrajan price of $ 8 / unit , is well below the import price

Not being an economist , I am confused  !

May be Mr Aiyar can dispel my following doubts  :

#   By taking out of our own soil ( or sea ) , does gas become a " traded

      commodity "  ? - even if entirely sold in India ?

#    Is KG-6 gas a " Natural Resource " which belongs to the Nation - and

       not to Reliance  ?

#    Is Reliance the " Owner " of the gas or a mere " Contractor "  ?

#    Would Mr Aiyar , want the Central Government to extend the same logic

      to other " Natural Resources " ( belonging to the country ) , being dug

      out from the earth ( by private companies ) , such as :

      *   Oil / Coal / Shale Gas etc  (  Fossil Fuels )

      *   Ores of Iron / Copper / Zinc / Aluminum etc

      *   Trees ( timber ) that grow in our jungles

      *   Any number of minor minerals / chemicals

      Should these too , be treated as " Traded Commodities " , whose local

      selling prices must be same as Imported prices ?

#    What about the air / wind that blows freely over our land  ?

      Does it belong to the Nation or not  ?

      Or , does it belong to the Companies setting up  WIND FARMS  , to

      generate electricity  ?

      Should such power be " Price Controlled " or not  ?

#    What about the Sunlight that falls on our vast land  ?

      Who does it belong to  ? To our government or to the companies setting

      up mega Solar Power Projects  ?

     Should there be a price control on such power - produced , using a  National Resource  ?

#    What about the hydro - power generated by private sector companies

     from the water flowing in our Country's rivers  ?

     Does - or does not - that water belong to the Nation  ?

     Should not such power be price - controlled  ?

#   Tomorrow , if a private sector company ( or a consortium of Indian

      Companies , in joint venture with foreign companies ) , invest Rs 1 Lakh

      Crores , to build the 22 Km long Kalpsar Dam across the Bay of Cambay

      in Gujarat , and generate 10,000 MW of power from Oceanic Tides  , -

     can they be allowed to set any selling price  ? At International price  ?

     I suppose , it would be next to impossible for them to " Export " such

     power beyond the shores of India  !

#   Incidentally , what about the Airwaves ( the 2G / 3G Spectrum )  ?

     Is that also a Natural Resource which belongs to the Nation ?

     Having " licensed " it from the Central Government  , can Mobile

     Phone companies , set any selling prices for their services  ?

Even with a combined debt of around Rs 2 Lakh Crores , how are these

    Mobile companies , able to deliver ( nearly ? ) cheapest mobile phone

    services in the entire World ? May be at 10 % of international price  ?

#   In ALL of the above - mentioned cases , should Central Government

     carefully calculate / frequently audit , the " Cost of Production "  ? Then

    link the " Local / Domestic , Selling Prices "  to such " Cost of Production "

    allowing certain  pre-determined " Return on Investment "  ?

#   Even as we agree that " Export prices " of gas are governed by prevailing   

     international prices , how come the " Domestic Prices " of gas are vastly

     different in different countries , ranging from under $ 1 to $ 5 / unit  ?

     Does this itself , not prove that , in each country , domestic prices are

    linked to their own local " Cost of Production "  ?

#  Very often , have we not exported , food grains , at " Below the Cost " ?

Mr  AIYAR ,

You will be doing a great service to millions of ignoramus like me , by offering your own " Views " on the points raised above

And , I suppose , since the fall in production from KG - 6 , is purely and entirely , due to " Technically Sound " reasons , raising of the selling price to

$ 8 ( or even $ 16 / - ! ) , won't result in any increase in production !

Time alone will tell  !

*   hemen  parekh  (  17  Feb  2014  /  Mumbai  )  

A Tale of Two Houses

*   DELHI  VIDHAAN  SABHA  :

Even though, with their combined strength of 42 ( in a house of 70 MLAs ), Congress + BJP could have easily defeated the Jan LokPal Bill after debate , they did not allow the bill to be tabled

These MLAs shouted , broke mike , tore up papers - nor allowed Kejriwal to speak for past 2 days

As promised earlier , Kejriwal resigned as CM and said

 ,

" I did not become CM to hold onto my chair at the cost of my promises to people  "

*   LOK  SABHA  :

Even though,

-  UPA government had numerical majority 

-  BJP claimed to be supporting a separate state of Telangana ,

Congress MPs ( both , pro-Telengana and anti-Telengana ), did not allow Telengana Bill to be discussed

They shouted , broke mike , tore up papers , sprayed black pepper powder and did not allow anyone else to speak , for past 3 days

Pretending helplessness , PM Man Mohan Singh watched the tamasha of his own MPs in silence , muttering , " I am pained " !

But he would not resign

What did he leave unsaid ?

"  I will hold onto my chair. Who cares for principles  ! "

PEOPLE  OF  INDIA  :

Again and again , you have watched in silence , the moral depravation of UPA , over the past 5 years

These people claim to be " Moral Successors " of late Railway Minister Lal Bahadur Shastri , who resigned , taking moral responsibility for a train accident  !

Oh , what a fall was there , my Countrymen  !

Again and again , you have watched with sheer , silent disgust , the shameless collusion of BJP , desperately trying to come back to power , using means , fair or foul  !

These people claim to be moral heirs to the legacy of stalwarts like Pandit Deen Dayal , Jai Prakash Narayan and Morarji Desai , for whom principles were more important than power !

But , now at least , it is no more a question of having to choose  between the " lesser of the two evils "  !

In April , at many polling booths , you will have an alternative in  a  AAP candidate

When you look at those names - and party symbols - on that EVM ( Electronic Voting Machine ) , two months from now , remember ,

-  YOU  WILL  GET WHO  YOU  DESERVE  TO  GET  !

Before pushing that button , ask yourself ,

"  Who  ( which candidate )  do I deserve  ?  "

And , if you find none , push that NOTA button ( None of the above )

For another 5 years , this will be your only chance to express your ANGER , in a manner that will count  !

*   hemen   parekh  (  15  Feb  2014  /  Mumbai  )

Gastro - nomics ?

May be India is suffering from Gastro-nomics

Or , from , Gas - to - Economics

Call what you may , the disease seems deadly  !

Minister Veerappa Moily , responding to Arvind Kejriwal's FIR , said :

" I sympathize with Arvind's ignorance. Gas pricing is a very complex issue "

What he would NOT say , is :

"  How dare you , Aam Aadmi , try to unravel in a few weeks , what took us years of hard work to complicate  ?

   To increase gas price from $ 2.34 to $ 4.20 to $ 8.40 , involves complicated calculations , - worse than sending a man to moon

   Couldn't you appreciate that all the odds were stacked against us  ?  "

Moily , Murli and Mukesh , would like us to leave it to the lawyers , the experts and the Supreme Court to decide what ought to be the FAIR and REASONABLE ( - please , don't ask , " to whom ? " ) , price of KG gas

But Aam Aadmi would like these experts to compile - and publish - some statistics re: the prices at which , companies around the World , produce and sell gas

As a aam aadmi , I would like to see a COMPARATIVE TABULATION of gas selling prices being charged all over the World , under following scenarios :

#   A

Domestic Companies which " extract " gas from the " Domestic Fields " of their own countries on a " Contract " basis ( deploying labor / management / technology / capital ) , on a " Production Sharing " basis

   At what prices do they sell that gas to ,

*   Their own local government / local companies

*   Overseas governments and companies

#   B

Companies which extract gas from " Foreign Fields " under a license from each foreign government or thru outright " Owning " of those fields

At what price do they sell gas to ,

*  Other companies of the host country

*  other companies world - wide

*  Companies in India

#   C

Purely " Trading " companies ( which do not engage in drilling / exploring / production )

At what price do they sell gas world - wide  ?  To India  ?

How much do their selling price to India differ from their prices world-wide ?

Experts will , no doubt , come up with other permutations / combinations

And they must

Because , we must try and get , as much of  " An Apple for an Apple " comparison , as possible , to arrive at meaningful conclusions

Other important questions that the Supreme Court will , no doubt ask , are :

>  World over , is there a definite co-relation between the " Cost of Production " and the " Selling Price " ?

    Or , is it just in India ?

>  What role does " World Market Price " play in determining the local selling price , all over the World ?

    Do gas selling prices in most of the countries , get determined by the world market prices ?  Or , is that a myth  ?

>  World over , what is the range of the " Rate of Return on Capital Employed " for companies like Reliance's " Petroleum business " ?

>  Would Reliance suffer massive losses if current price of $ 4.2 were to continue for a few more years ?

>  Will price of $ 4.2 , fail to attract foreign investments ?

>  Are  there sufficient grounds to suspect that the past - including recent past - decisions in regard to gas selling prices , were dishonest ?

>  Is there a clear case of collusion between Reliance and individuals occupying high positions in Central government  ?

>  Is there a clear case of corruption  ?

Don't expect answers to these questions , any time soon

There is no doubt , at least some answers are bound to embarrass some people  !

In any case , the mouse has dared to roar  !

And Aam Aadmi is cheering  !

*   hemen  parekh  (  12  Feb  2014  /  Mumbai )

Run Out of Issues , Rajat Sharma ?

Dear Rajat Sharma ,

Last evening , on your India TV show , you spent quite a few minutes talking about the refrigerator , the air-conditioner , the micro-wave oven , the sofa set etc

You normally don't talk about such mundane things  !

So , why this sudden importance to items of necessity  ?

Surely , India TV was not airing a " Commercial "  !

Only because , some 3 ministers of AAP government had asked these items to be installed in their homes  ?

From the tone of your voice , it seemed you had stumbled upon some dark , corrupt practice of AAP ministers  !

A " corruption " of some Rs 10 lakhs in all , between 3 ministers  !

Items that belonged to the Delhi Government and which , these ministers will need to leave behind when they vacate their government-owned flats in the next 3 days  !

(  Since , AAP government is most likely to resign in next 3 days )

Now , you don't want to waste your time telling the viewers about

>  Dozens of Ministers / MPs / MLAs , who continue to occupy their official

     residences , months / years after their tenure - without paying rent

>  Scores of Ministers who owe various agencies , crores of rupees for use of

    water / electricity / telephone etc , after demitting office

>  Equal number of ex-Ministers / MPs / MLAs , who enjoy one or other kind

     of perks / benefits from State coffers  ( and of course ,from  Air India )

>  Ministers ( including some ex-presidents ) who travelled abroad on what

    was described as " Official Visits " - with friends and family vacationing

>  Planning Commission spending a few crores of rupees to renovate toilets

>  Ministers spending crores of rupees to re-furbish their bungalows

>  Ministers / MPs / MLAs who " forget " to declare all of their assets while

    filing their nomination for elections

>  Ministers who " forget " to file their Income Tax returns for a few years

     ( Babu Jagjivan Ram forgot to file , for 10 years in a row ! )

>  MPs / MLAs who spend ( of course , on government expenses ) 15 days ,

    holidaying at exotic foreign locations , to study " Empowerment of Poor "

RAJAT ,

That you are anti-AAP , does not stop me from remaining glued to your 9pm

show every evening - and I urge , all AAP ministers to do so  !

It is only critiques like you who can keep reminding them of the lofty

principles that they stand for

By and large , you have conducted yourself without bias towards any political party

You have been balanced and respectful of the people you interview

And the best part is ,

You allow the participants to speak , without interrupting them or trying to put words in their mouth - a rare virtue amongst TV anchors / editors  !

Don't make a mountain out of a mole hill  !

In future , please ignore non-issues

After all , India TV is ,  " Aap ki Awaz "  !

*   hemen  parekh  (  11  Feb  2014  /  Mumbai  )

The Facebook Generation

When I booked my phone ( landline ) with Telephone Department in 1959 , delivery was 7 years

Ditto with FIAT car

After making full payment in advance

(  Premier Automobile made more money from interest on advances , than by selling cars !  )

Now my granddaughter walks into a corner store and gets her new smart phone in 7 minutes  !

(  She does not even remember my landline number , anymore  !  )

And , today , you can have a brand new car delivered at your residence in ONE day , after making online payment on Company's web site !

( That is because , car dealer needs one day , for RTO registration )

How did this revolution ( or , evolution ? ) happen  ?

One word answer  :

COMPETITION

Two word answer  :

DESTROY  MONOPOLY

Three word answer  :

SUPPLY EXCEEDS DEMAND

But , even today , what happens when you want ,

>  Ration Card

>  Passport / Visa

>  Driving License

>  Building Construction Permit

>  Factory License

>  Shop and Establishment License

>  Water / Electricity connections

>  Layoff of surplus workers when demand goes down

>  Environment Clearance for industries

>  Auctioning of Airwaves ( Spectrum )

>  Starting new banks

>  Constructing new roads / bridges / airports

>  Enacting new laws

>  Changing Business Transaction Rules ( ala Delhi JanLokpal Bill )...etc

Why do delivery of these services still take weeks / months / years  ?

One word answer  :

MONOPOLY

When it comes to these services , municipalities / state governments / central government , have  no competition  !

India's Facebook Generation of 285 million ( between the age of 15 - 29 ) is saying :

Like you old timers , we are not prepared to wait for these services endlessly

We want things done fast , today , NOW  !

Even if that requires introduction of Competition to existing establishments ( municipalities / governments )

And , if our constitution do not permit creation of " Parallel / Competing " governments , then we will change those governments  !

Or,

We will come up with some " Out of Box " solutions for " Delivery by Alternate Means "  !

We couldn't care less for your rules / regulations / laws

We will change everything that obstructs our right to a fast service

Our Neta is Bill Gates , who re-wrote the rules of service - delivery in the 21st Century, in his seminal book ,

"  Business @ The Speed of Thoughts "

Read it or Parish !

Choice is yours  !

*  hemen  parekh  (  10  Feb  2014  /  Mumbai  )

A Ticking Time-Bomb ?

Consider the following  :

*  India's population is 1220 million

*  Annual net increase is 15 + million

*  285 million are in the age group of 15-29

*  When GDP was growing at 8 %, we added 5 million jobs / year

*  Now that GDP is down to 4.9 % , we are adding 1 million jobs / year

*  Jobs in India can grow at 15 million / year if GDP grows at 12 % / year  !

*  41 million unemployed are registered with 900+ Employment Exchanges

*  Employment Exchanges find jobs for a mere 3 lakh / year  !

*  Annually , 14 million ( 15 - 1 ) get added to the ranks of jobless !

*  It takes Rs 1 million by way of Capital Investment , to create ONE job

*  National economies around the world are slowing down or shrinking

*  Unemployment among youth has become universal problem

*  All around the World , governments are cutting back on Welfare expenses

*  Root cause of ALL protests / riots / demos everywhere , is JOBLESSNESS

*  Don't be fooled by experts who describe India's Youth as Demographic

    Dividend !

*  Despite being a " Low Cost Economy " ( meaning wages / salaries at 10%

    of those in developed countries ) , jobs are NOT flowing to India . Why ?

    Our youth lack the necessary " Skills " - making them unemployable

*   UPA-2 Government is trying to fool us by saying NSDC ( National Skills

     Development Corporation ) will train 500 million youth in next 5 years !

*   On the other hand , there is NO incentive to Private Sector Industries , to

     come forward to invest in training these 500 million - something that

     would require an investment of Rs 250 Million Million

*   Private Sector has ,  required Money / Expertise / Organizational setup

     to impart such training

*   But that money is in the form of BLACK MONEY  !

*   So , what is the ANSWER  ?

*   Introduce a AMNESTY SCHEME , under which no questions will be asked

     as to the source of funds ( ie Black Money ) , if these are invested by

     the Private Sector in training of India's Youth , in prescribed Skills

*   Private Sector should be allowed to charge a reasonable fee from each

     trainee , 50 % of which should be subsidized by State Governments

*   Income earned  ( from Fees ) shall be tax-free for 10 years

If UPA -2 gets wiped out in 2014 , it won't be because of corruption  !

It will be because of JOBLESSNESS amongst the FIRST-TIME voters  !

And , if NDA comes to power but fails to defuse the ticking TIME BOMB of

UNEMPLOYMENT , it will meet with the same fate in 2019 !

Are our NETAS willing to think " Out of Box "  ?

It is still not too late  !

*   hemen  parekh  ( 09  Feb  2014  /  Mumbai )