Wednesday, March 31, 2010

Clamour for China peg - Need or Greed??

Whenever there is a sustained rupee appreciation against dollar, exporters would quickly join together and clamour for govt intervention and lobby for currency peg as in case of China. Before countering or acceding to their claim, it is necessary to analyse whether such a peg is feasible and if yes, whether such a peg is essential in Indian conditions. It would be educative to find out why the currency peg is being adopted in China.

It is in fact true that a volatile currency will adversely impact the businesses that buy from/sell to foreign entrepreneurs. But the onus is on part of entrepreneurs to evolve mechanisms to mitigate their exposures through derivative instruments and not to lobby the government to intervene and peg the currency. The recent introduction of exchange traded currency derivative products by RBI is a right step in assisting the exporters to hedge their positions against currency volatilities. It is time for entrepreneurs to evolve rather than relying on spoon feed from the government.

China is able to implement and continue with its currency peg withstanding foreign pressure because of its authoritarian governance structure and powerful economic clout. India, with its weak resource base and democratic set-up will find it difficult, first to implement currency peg and then to sustain it. It is also not desirable, not to allow currency appreciation, in a chronic trade deficit country like India where currency appreciation, which narrows the deficit in real terms, should in fact be actively encouraged. It is also curious to know that calls for currency depreciation is louder from industries with significant lobbying power like Software companies rather than textile and leather industries.

Hence, it makes more sense for the government to actively encourage exporters and importers to use hedging mechanisms to mitigate loss rather than getting back to regulated regime of 80s. Having moved to a market economy, short-term currency fluctuations should be accepted by entrepreneurs as part of business.

Tuesday, March 30, 2010

Bombay Bomber

Watching KKR's defeat against double D (As Danny Morrison used to call Delhi Daredevils) last night reminded me of a long forgotten hero. A tall, athletic fast bowler (in fact the fastest in his country of 130k trundlers) who is no mug with the willow. He was the quickest to 50 ODI wickets and scored the fastest ODI fifty for his country. But what happened after those initial feats is the stuff of legend.

"Reincarnation of Kapil Dev", "Bombay Botham", "Imran and Hadlee rolled into one". "Sachin with the bat and Srinath with the ball"(his mindless critics ignorantly blabber the reverse as true). Adjectives abound. Yes you guessed it. We are talking about one and only "Ajit Bhalchandra Agarkar".

Neighbour's pride and Owner's envy. He was already a legend with his 5 ducks in a row and several match-winning bowling performances. Who cares if those bowling performances has only resulted in wins for our opponents. His cult only seem to grow further as he ventures into new vistas. With his IPL exploits, he has earned new adjectives "Kolkata Klusener", "Marathi Morkel". He is the X factor KKR missed in their first two matches en route to their uncharacteristically insipid performance of two wins in two matches. After a hat-trick of losses against the Chennai, Mumbai and Double R, KKR realised who they are missing.

In fact Sourav Ganguly was so impressed with our hero that he argued with SRK to get the team name changed to AAR after he inspired his team to a sensational win against the table toppers from the bottom - KXIP with his two-wicket burst at the top. Sanity returned in the next match against Delhi last night when AAR's assortment of lollipops and full tosses was flayed to all parts of the ground by marauding Warner.

With the chase getting increasingly tougher for KKR, the novice Angelo Matthews was bowled by an excellent yorker. My brother was exclaiming that this is the end of the chase. Sorry bro, you are wrong, no chase is over until the experienced campaigner AAR is done with. I was cheering at my highest decibel much to the surprise of my grandma at the mere sight of my hero stepping into Kotla wielding the bat with the swagger of Sir Viv. When KKR was needing 7o runs in 4 overs, commentators were seen to be exclaiming that they need nothing short of a miracle innings of the sort played by Bhajji 2 nights back. Critics might say such comments are inane, just to infuse some life into a zombie match. As always, critics are wrong. Commentators know what they are talking about, they know there is still one man left in KKR who can play such an innings. Saha and Agarkar were the ones at the crease and I am not referring to the poor Saha who is resigned to play second fiddle.

Live ball-by-ball commentary posted by Cricinfo would illustrate the heroics of AAR better:

Bhatia to Agarkar, FOUR, Bhatia bowls a low ball outside off, Agarkar swings and gets a bottom edge through Karthik's legs for four
Bhatia to Agarkar, no run, Agarkar swings again and this time he doesn't place it between Karthik's legs, he misses it completely

What placement!! What cunning!!!

Oh my dear!! How much India is missing you..!!! Hope Dhoni and Kris Shrikant is watching this blog.
My cousin used to say he is the only batsman who can clear the ropes with a cunningly edged shot since shots off the middle of his bat could only fetch him a boundary. Keep going Ajit!! Long may live your lore!!!

Monday, March 29, 2010

Religion kills and so do drugs!!!

I recently visited a website that is supposed to show live streaming of international cricket matches. It also contained a window for visitors to chat and discuss about the live match.

A cursory look at the chat room revealed plenty of hate mails by people of various nationalities poking fun at other nations/religions with such a hatred and viciousness that you can be forgiven to have forgotten that you have stumbled upon a website glorifying religious fanaticism.

The discussion gave roots to a whirl of thoughts about the usefulness of the religion. If the so-called educated elite possessing access to internet can have such dangerous notions, one wonders where the fault lies - Is it with the religion or with the education? Has religion outlived its utility? Perhaps, should we start thinking of some other mechanism to influence people's behaviour - a Big Brother sort of myth?

Isn't it time to include "Religious Education" in our education curriculum to impart basic understanding of major world religions in young minds on the lines of Sex education?

Its quite difficult to believe that God would lay down a plethora of strict rules and regulations for people (an omni-potent regulator) to follow, punishing even small deviations with severe ordainment. Its even harder to understand a religion's stance that non-adherents shall cease to exist. Do they actually say that? Again no clear answers for religious texts written in ancient language give rise to varied interpretations.

History has been replete with countless instances of men killing each other in the name of religion - Crusades, 100 year war, Jewish persecution, Christian-Muslim wars in many European, Asian countries - Armenia, Albania, Bosnia-Serbia, India-Pakistan, Srilankan crisis, etc and the list is endless. If something can kill people, its bad. Tobacco kill; Alcohol kills; Drugs kill; And so do religions. We have made Tobacco, Alcohol and Drugs illegal.. Should we actually start to get our thoughts rolling on whether we have to illegalise Religion as such?