Vice President, Ladies and Gentlemen, I am fully conscious of the honour and privilege which is mine to be invited here to address you this evening. The honour is even greater that you should have invited a soldier when you could have invited any number of VVIPs. General Choudhury, I thank you for the very kind words you spoke about me. You have told us all the good things that Field Marshal Cariappa has done. But one big thing that he did, you haven’t mentioned. He taught the Indian Army to be completely apolitical. Ours is one country, where soldiers have kept out of politics. I think that was the biggest achievement of Field Marshal Cariappa, the greatest service to this country.

Some years ago, I was invited to a Rotary club function at Madras. It was stated that the youth of this country had not contributed much to the society and they asked me to speak on the subject. I disagreed violently. I said then, and I say now that the youth of this country is confused. It doesn’t know why this country is facing all these problems. Wherever they look, they find there are shortages. There is shortage of power and power-cuts, they can’t study and they want to know whose fault it is. They want to join colleges and universities and they are told there is a shortage of seats and they want to know whose fault it is. They look around and they see the dissension amongst politicians and they want to know whose fault it is, not theirs. They want to go abroad for studies and they are told that there is no foreign exchange and they want to know whose fault it is. Wherever they look, they find shortages, corruption, bribery, smuggling and they want to know whose fault it is. Here was a country, which was considered the brightest jewel in the British crown and they want to know what’d happened to that bright jewel.

And nobody gave them any answer. They are no longer fooled with the glib answer that we were under British rule for 200 years and that’s why we are in this state. They turn around and say that the British left us four decades ago, what have you done, except making excuses. They say, look at Singapore, look at Malaysia, which too were ruled by the British and look at the progress they have made. They turn around and say look at Japan and look at Germany. They fought a war for four years. Their youth was decimated, they lost, their countries were occupied, their industry was destroyed, portions of the country were taken away, and look what they have achieved. So please stop making excuses and give us an answer. Why?

Ladies and gentlemen, I have decided to open my big mouth and say that the answer and the real problem for all our difficulties, all our shortages, etc. is lack of leadership. Mr Vice President don’t misunderstand me and gentlemen of the Press don’t misquote me. When I turn round and say lack of leadership I do not mean just political leadership.

I mean lack of leadership in every sphere of this country. Whether it is political, administrative, in industry, in trade unions, in educational institutions, in the law and order, personnel, in our sports organisations and even in the Press, it is lack of leadership. And it is on this subject that I wanted to address you this evening. The Director General of Infantry wanted me to talk about leadership in the 21st century. Ladies and gentlemen, leadership does not change. The attributes of leadership have come down the years. All that happens is that greater emphasis is placed on certain attributes of leadership as countries advance and technological developments take place. I do not know whether leaders are born or leaders are made.

There is a school of thought, which, says leaders are born. Ladies and gentlemen, we have a population of nine hundred and thirty million people but there is a dearth of leadership. If leaders are not born, can we make leaders? And my answer is yes. Give me a man or a woman with common sense and who is not an idiot and I assure you, you can make a leader out of him or her.

The primary, the cardinal attribute of leadership is professional knowledge and professional competence. And you will agree with me, ladies and gentlemen, that you cannot be born with professional knowledge or professional competence. Not even if you are the son of the prime minister, an industrialist or a Field Marshal! Professional knowledge has to be acquired the hard way.

It’s a continuous study and you never acquire enough in today’s fast moving, competitive, technological world that we are living in. You’ve got to keep up with your profession, whatever you are in. Doctors, engineers, scientists, all contribute to journals of their profession. They all have contact with their counterparts in other worlds.

The problem in India is that as soon as one of us is put in a position of power, he feels that he has the monopoly of the entire knowledge. Those who are responsible for the defence and security of this country, can they cross their hearts and swear that they have ever read a book on strategy, on tactics? On military campaigns, or weapons? Can they even distinguish between a mortar and a motor, a guerrilla from a gorilla? Professional knowledge and professional competence are the main attributes of leadership. Unless you know, and the men you command know that you know your job, you will never be a leader. Take industry for example. The automobile industry has gone through tremendous technological changes. It’s only recently that our industrialists have started thinking and producing a modern car. I want to tell you that unless you have professional knowledge and professional competence, you will never become a leader.

And that takes me to the next attribute of leadership, the ability to think; to make up your mind, to take a decision and accept full responsibility for that decision. Have you ever wondered, why a man doesn’t take a decision? Very simple, because he lacks professional knowledge and professional competence or he is afraid that if he takes a decision and goes wrong, he will have to carry the can. Ladies and gentlemen, as a law of average, if you take ten decisions, five should be right. And if you have professional competence and professional knowledge, nine should be right. And the one that is wrong will always be put right by a bright colleague, by an intelligent staff officer or by the gallantry of some soldier. I don’t want to give you too many examples of why and when people haven’t taken decisions and what has happened. I will give you just one. If the decision had been taken to ensure that the Sabri Masjid would not be destroyed, a whole community would not have been antagonised.

An act of omission can be corrected but an act of commission cannot be corrected. To do nothing is to do something, which is definitely wrong. When I was the Army Chief, I visited my formation commanders and I asked one of them what he had been doing about some matter. He turned around and said “Sir, I have been thinking, I haven’t made up my mind”. It is absolutely necessary that a leader must be decisive.

The next attribute of the leadership is absolute honesty and impartiality. We all have our likes and dislikes, but, we must never allow our likes or our dislikes to influence our professional judgment. Those of us, who had the good fortune of commanding hundreds and thousands of men, know this. The leader must be absolutely impartial and honest in dealing with personnel. No man likes to be punished and yet a man will take his punishment if he knows that the punishment awarded to him is similar to the one for a similar crime committed by somebody who has influence, who has the ear of an industrialist, of a minister, of a member of parliament, or the Field Marshal. No man likes to be superseded. And yet, they will accept supersession, if they know they have been superseded by someone better, better qualified under the regulations but not by somebody who is a relative of the minister or by somebody for whom a ‘Godman’ intervenes. It is vitally important when you are dealing with men that you should be absolutely impartial. We must possess the courage to withstand these pressures.

Moral and physical courage are the next vital attributes and I do not know which one is more important. While addressing young officers or young policemen, I will put emphasis on physical courage but since I am addressing this gathering, I will lay stress on moral courage. What is moral courage? Moral courage is the ability to distinguish right from wrong and having done so, to say so, irrespective of the consequences to you. A ‘Yes man’ is a dangerous man. He is a menace. He will go very far. He can become a minister, a secretary or a Field Marshal but he can never become a leader nor, ever be respected. He will be used by his superiors, disliked by his colleagues and despised by his subordinates. So discard the ‘Yes man’.

I am going to give you a personal example of moral courage. There is a very thin line between being dismissed and becoming a Field Marshal. In 1971, when Pakistan cracked down in East Pakistan, hundreds and thousands of refugees started pouring into India, into West Bengal, Assam and Tripura. The Prime Minister held a cabinet meeting in her office. The External Affairs Minister, Sardar Swaran Singh, the Agriculture Minister, Mr Fakhruddin Ali Ahmad, the Defence Minister, Babu Jagjivan Ram, and the Finance Minister, Yashwant Rao Chauhan were present. I was then summoned.

A very angry, grim-faced Prime Minister read out the telegrams from the Chief Ministers of West Bengal, Assam and Tripura. She then turned around to me and said, “What are you doing about it?” And I said, “Nothing, it’s got nothing to do with me. You didn’t consult me when you allowed the BSF, the CRP and RAW to encourage the Pakistanis to revolt. Now that you are in trouble, you come to me. I have a long nose. I know what’s happening.” I then asked her what she wanted me to do. She said, “I want you to enter East Pakistan.” And I responded, “That means war!” She said, “I do not mind if it is war. Have you read the Bible?” I queried.

The Foreign Minister, Sardar Swaran Singh asked, “What has the Bible got to do with this?” I explained, that the first book, the first chapter, the first words, the first sentence God said was, “Let there be light” and there was light. Now you say, “Let there be war” and there will be war, but are you prepared? I am certainly not. This is the end of April. The Himalayan passes are opening and there can be an attack from China if China gives us an ultimatum. The Foreign Minister asked, “Will China give an ultimatum?” And I said, “You are the Foreign Minister, you tell me”. I told them that my armoured division and two of my infantry divisions were away. One in the Jhansi/Babina area, the other in Samba and the third one in Andhra Pradesh and Tamil Nadu. I mentioned that I would require all the road space, all the railway wagons, the entire railway system to move these formations to the operational areas and that harvesting was in progress in the Punjab and UP and they would not be able to move the harvest which would rot; and I pointed out to the Agriculture Minister that it wouldn’t be my responsibility if there were a famine.

Then I said, “My armoured division, which is my big striking force is supposed to have one hundred eighty nine tanks operational. I have got only eleven tanks that are fit to fight.” The Finance Minister, who is a friend of mine asked, “Sam why only eleven?” So I told him, “Because you are the Finance Minister. I have been asking you for money for over a year and you say you haven’t got it!” And finally I turned around to the Prime Minister and said that the rains were about to start in East Pakistan and when it rains there, it pours and when it pours, the whole countryside is flooded. The snows are melting, the rivers would become like oceans. If you stand on one bank, you cannot see the other. All my movement would be confined to roads. The Air Force, because of climatic conditions would not be able to support me. Now Prime Minister, give me your orders. The grim Prime Minister with her teeth clenched said, “The Cabinet will meet again at four o-clock”. The members of the Cabinet started walking out. I being the junior most was the last to go and as I was leaving, she said, “Chief, will you stay back?” I turned around and said, “Prime Minister, before you open your mouth, may I send you my resignation on grounds of health, mental or physical?” She said, “Every thing you told me is true”. “Yes! It is my job to tell you the truth” I responded, “and it is my job to fight, it is my job to fight to win and I have told you the truth,” She smiled at me and said, “All right Sam, you know what I want?” I said, “Yes, I know what you want!”

I had the moral courage to tell her the truth. A leader must have moral courage otherwise he will not be respected.

I now come to physical courage. Fear, like hunger and sex, is a natural phenomenon and the man who says he is not frightened is a liar. But to be frightened is one thing and to show fear is something quite different. It is when your knees are knocking and your teeth are chattering – that is when the real leader comes out. If you once show fear to your men, you will never have their respect. I could quote you many examples of my own life. I am not a brave man! Please believe me. You have to have physical courage. Never show your fear. How often has a course of a battle, when everything was going wrong, changed because some young officer has picked up a handful of men and changed the situation by his physical courage? How often a poor old Inspector of Police with nothing but a little swagger stick in his hand quelled a riot by showing physical courage?

The other attribute of leadership is loyalty. We all except loyalty but do we give loyalty? Look at things happening around you. The sons of kings, chief ministers and heads of governments have shown disloyalty. Loyalty you must get from your subordinates and also give loyalty to your superiors, colleagues and subordinates. Men may give you trouble and create problems but a leader must deal with them immediately and sternly. A leader must remember that human beings have human problems, so the leader must have a human touch. Leaders must have the gift of the gab and a sense of humour. And finally, men and women all over the world like their leader to be a man, to have manly qualities. It is not that only a person who has no vices is a good leader. Look at Caesar or Napoleon, they had vices but they were outstanding leaders.

Since I joined the Army, many changes have taken place; the .303 rifle has been replaced by a new weapon. Horses and mules have been replaced by vehicles and tanks. Signal communications have advanced a great deal. Satellites now give the entire information to the Commanders. But for infantry soldiers, one thing has not changed, and that is their job. Their job is to fight and win. If you lose, you would disgrace your country, your village, your home and your wife. Let your motto be, ‘No one provokes me with impunity’. In other words, or in a soldier’s language, if your enemy hits you on the chin, black both his eyes and push his teeth down his throat! If you can instil this quality in your men, you will be a great leader. The leader that this country lacks at all levels, in all walks of life.

I did not wish to iterate leadership traits and qualities from books to this august gathering, but share my perceptions with you in our context. I hope I have been able to do that.

Thank you.

Field Marshal Sam Manekshaw, MC

1853: The first recorded communal clashes over the site date back to this year.

1859: The colonial British administration put a fence around the site, denominating separate areas of worship for Hindus and Muslims. And that is the way it stood for about 90 years.

1949: In December of that year, idols were put inside the mosque. Both sides to the dispute filed civil suits. The government locked the gates, saying the matter was sub-judice and declared the area “disputed”.

1984: The movement to build a temple at the site, which Hindus claimed was the birthplace of Lord Ram, gathered momentum when Hindu groups formed a committee to spearhead the construction of a temple at the Ramjanmabhoomi site.

1986: A district judge ordered the gates of the mosque to be opened after almost five decades and allowed Hindus to worship inside the “disputed structure.”

1986: A Babri Mosque Action Committee was formed as Muslims protested the move to allow Hindu prayers at the site.

1989: The clamour for building a Ram temple was growing. Fronted by organizations like the Vishwa Hindu Parishad, foundations of a temple were laid on land adjacent to the “disputed structure.”

1990: The then BJP president Lal Krishna Advani took out a cross-country rathyatra to garner support for the move to build a Ram temple at the site. VHP volunteers partially damaged the Babri  mosque. Prime Minister Chandrashekhar intervened and tried to negotiate with the various groups. But talks failed.

1991: Riding high on the success of Advani’s rathyatra, the BJP became India’s primary opposition party in Parliament and came to power in Uttar Pradesh.

1991: The movement for building a temple gathered further momentum with Karsevaks or Hindu volunteers pouring into Ayodhya. Bricks were sent from across India.

1992: On December 6, the Babri mosque was demolished by Karsevaks. Communal riots across India followed.

1992: On December 16, ten days after the demolition, the Congress government at the Centre, headed by PV Narasimha Rao, set up a commission of inquiry under Justice Liberhan.

1993: Three months after being constituted, the Liberhan Commission began investigations into who and what led to the demolition of the Barbri mosque.

2001: Tensions rose on the anniversary of the demolition of the mosque as the VHP reaffirmed its resolve to build a temple at the site.

2002: Early that year, as Uttar Pradesh headed for Assembly elections, the BJP did not commit itself to the construction of a Ram temple in Ayodhya in its election manifesto. The VHP, however, remains adamant and set March 15 of that year as the deadline for construction to begin. Hundreds of volunteers start converging on the site.

2002: On February 27, at least 58 people were killed in Godhra, Gujarat, in an attack on a train believed to be carrying Hindu volunteers from Ayodhya. Riots followed in the state and over 1000 people were reported to have died in these.

2002: In April that year, a 3-judge Lucknow bench of the Allahabad High Court began hearings on determining who owned the site.

2003: The court ordered a survey to find out whether a temple to Lord Ram existed on the site.  In August, the survey presented evidence of a temple under the mosque. But Muslim groups disputed the findings.

2003: In September, a court ruled that seven Hindu leaders, including some prominent BJP leaders, should stand trial for inciting the destruction of the Babri Mosque. But no charges were brought against Lal Krishna Advani, by now the Deputy Prime Minister.

2004: A Congress-led government returned to power at the Centre, after the general elections threw up what many saw as a surprise result.

2004: In November, an Uttar Pradesh court ruled that an earlier order which exonerated LK Advani for his role in the destruction of the mosque should be reviewed.

2007: The Supreme Court refused to admit a review petition on the Ayodhya dispute.

2009: The Liberhan Commission, which was instituted ten days after the demolition of the Barbri mosque in 1992, submitted its report on June 30 – almost 17 years after it began its inquiry. Its contents were not made public.

2010: The High Court bench in Lucknow hearing the title suit case, said it would pronounce verdict on September 24, Friday last. Days later, a plea to defer verdict on the Ramjanmabhoomi-Babri Masjid title suit was rejected by the Allahabad High Court.

The petitioner, Ramesh Chandra Tripathi, then approached the Supreme Court, which stayed the High Court verdict on Friday. The two judges who heard the case differed, resulting in the Chief Justice stepping in.

And yet, both these fine representatives of India’s liberal and cosmopolitan traditions find themselves under siege in a political milieu that appears to share an uneasy relationship with the English-speaking professional turned politician.

Tharoor was undone by the seeming impropriety of having acquired sweat equity for his sweetheart without informing the world. Ramesh is being pilloried for having questioned the Home Ministry’s policies towards China. Both are perhaps guilty of forgetting their constitutional responsibilities as union ministers. Tharoor paid for it by being banished from a ministry which could have benefited from his wide experience as a global diplomat. Ramesh may yet pay the price of his indiscretion by being switched from an environment ministry which has acquired a renewed energy and a forward-looking profile under his leadership.

The irony is that the charges against the duo appear trifling when compared with the monumental scandal and corruption that besets the political class. An A Raja gets away with the clamour for his resignation over the spectrum scam because as his leader, M Karunanidhi brazenly told the UPA leadership, “Mr Raja is a Dalit’. A sweat equity worth a few crores appears loose change when compared with the fact that the public exchequer lost a few thousand crores because of a minister’s dishonesty. Again, while Ramesh may have overstepped his brief when commenting on the Home Ministry’s China policy, how do his statements compare with the unabashed criticism of fellow UPA ministers by Mamata Banerjee? While Ramesh has to apologise, Mamata remains unrestrained.

Which brings me to raise the larger question: are English-speaking, upper-class, highly educated professionals soft targets in public life? An A Raja gets the benefit of doubt because no political party can be seen to be anti-Dalit even if it means winking at corruption. A Mamata Banerjee enjoys the protection conferred on her by virtue of being a regional ally and a mass leader.

The problem is that both Tharoor and Ramesh are upper-caste politicians with no mass base. Tharoor is a Nair, Ramesh a Mysore Brahmin. Tharoor was parachuted into the Lok Sabha from Thiruvanthapuram because of his proximity to the Congress leadership. Ramesh was made a Rajya Sabha member from Andhra Pradesh, again because he had a special relationship with the party’s high command. Removing Tharoor as minister was an easy option because while it may have affected the twitterati, it will not affect the existing power equations in Kerala. Ramesh is also a politician who counts his numbers on a laptop, not in a public rally. In other words, both are seen to be easily dispensable netas.

The truth though is that Indian politics needs more of the likes of Tharoor and Ramesh, lateral entrants from the professional world who can add to the quality and intellect of public life. Just contrast a Tharoor as minister of state in South Block with some of his contemporaries. As diplomats from African and Latin American countries have admitted, Tharoor’s experience in the United Nations and linguistic skills made him an impressive ‘interlocutor’ (ah!that dreaded word again) in their engagement with India. Contrast also Ramesh with his predecessors as environment minister, many of whom reduced Pariyavaran Bhavan to a cash and carry ministry. Would you rather have a learned minister representing the country at climate change summits or a bumbling politician who has never heard of greenhouse gas emissions?

Across the western world, there are increasing examples of top-level professionals making a successful switch from the private sector to government. Unfortunately, in India, many of the individuals who aim to make this transition are typecast as English-speaking elitists who are disconnected with ‘real India’. The charge of elitism partly stems from envy of the successful upper class Indian, partly from a certain condescension, even hubris, shown by the anglicised Indian towards his ‘vernacular’ counterparts.

For the traditional, feudal Indian politician, who survives on caste and family loyalties, Tharoor and Ramesh are gatecrashers into a closed system. The duo are a threat to the prevailing political order because they challenge the status quo: neither are they dynasts who are the beneficiaries of being the sons and daughters of politicians nor are they caste chieftains who will nurture their vote banks. They are instead, like millions of others, children of middle class Indians who have become upwardly mobile through scholarship and hard work. Indeed, if politics is to prove aspirational and attract the best talent, then it is important that the likes of Tharoor and Ramesh succeed. Which is also why professionals like them need to be extra careful in their public dealings because the rules for their conduct will always be measured by higher standards than those imposed on the rest of the system.

Post-script: If Tharoor and Ramesh are looking for a role model, maybe they should take a lesson from Nandan Nilekani. The former Infosys chief executive is now shuffling through data in a government office, with the singular focus of providing the country’s citizens with a unique identification card. No twitter accounts, no page three parties, no ego trips, no dramatic statements, it sometimes pays in public life to be a low profile worker ant.

1. Jammu: Hindus in majority after partition in 1947 (prior to 1947, ~ 53% Muslims)
2. Kashmir: Majority consisting of Sunni Muslims (9 out of 10 Muslims in world are Sunni)
3. Ladakh: Predominant by Tibetan Buddhists (Ladakhi activists demand of a UT status)
4. Gilgit: Largely inhabited by Shia Muslims
5. Baltistan: Mixture of many ethnic groups Shins, Yashkuns, Pathans, etc.

Above mentioned 5 regions were brought into as one unit by the Jammu-based Dogra Rajput dynasty in the 1800’s. They conquered Ladakh in the 1830’s, acquired Kashmir from British in 1840’s and moved into Gilgit-Baltistan by end of the nineteenth century.

1925 – Maharaja Hari Singh of the Dogra Rajput dynasty came to power in J & K with Ramachandra Kak as its Prime Minister.

1931 – Sheikh Mohammad Abdullah became an adversary of Maharaja. He was instigated after the arrest of an activist named Abdul Qadir while he has about to meet His Highness regarding the joblessness of Muslim youths. This was the first Hindu-Muslim clash which later on took the face of communal violence.

1932 – All Jammu and Kashmir Muslim Conference was formed by Sheikh Abdullah and Ghulam Abbas (a lawyer from Jammu) to form an organised opposition against Maharaja.

1938 – 1941 – Sheikh Abdullah shared his socialistic ideals with Nehru, as a result of which he had to tailor a split from his own party. Abbas, who lacked secular ideals, moved with his share of party and thus named it as Muslim Conference. At this point in history, National Conference of Abdullah and Nehru’s Congress came closer.

1946 – In May, Sheikh Abdullah launched the Quit Kashmir agitation against the Maharaja and was arrested and sentenced to three years imprisonment (but was released only sixteen months later on 29 September 1947). On 15^th July, Maharaja, on advice of Ramachandra Kak, stated J & K to be independent.

Maharaja Hari Singh was in a quandary as to join India or Pakistan, since he loathed Congress because of its closeness to Abdullah and in the other hand he was worried about his dynastic future if he joined Pakistan. He also considered the choice of aligning with the USSR!

1947 – Mountbatten wanted J & K to accede to either India or Pakistan. Maharaja signed a Standstill Agreement with Pakistan. However the relations with Pakistan deteriorated. The suspension of a goods train plying from Sialkot to Jammu was one amongst many reasons of deterioration. Maharaja sacked two prime ministers in succession namely Ramachandra Kak and Janak Singh. Now, Meher Chand Mahajan, a close friend of Nehru and Patel was appointed as the new PM.

August ‘47 – The people of Poonch, where the economic policies of Hari Singh had taken their toll on the Muslim population, displayed flags of Pakistan on the eve of independence of India. The Maharaja’s rule was being challenged by Abdullah in the Valley and Muslims in Poonch.

September ’47 – Patel was inclined to give J & K to Pakistan but only before 13^th September, the day Pakistan had signed accession to Junagadh (was later given to India). Nehru wrote to Patel about the need to unite Maharaja and Sheikh Abdullah (now freed from sentence) for Kashmir’s union with India.

October ’47 – Thousand of Pathans entered Kashmir from the NWFP of Pakistan on Oct 22. Why they came? Who was helping them? Did they know about the unrest in Poonch? These questions are still a matter of great controversy. They cut through the cities of Muzaffarabad, Uri, Mahuta, and Baramula while looting goods, murdering catholic priests and raping Muslim & Hindu women. Indians believe that they were sent by Pakistan to disrupt peace and unity while Pakistanis believe that they had come to save their co-religionists being persecuted by a Hindu ruler. Maharaja Hari Singh asked for military assistance from India and India in turn got the Instrument of Accession signed by the Maharaja. Indian troops were flown and the Valley was thus secured from the invaders. On hearing this, Jinnah ordered his army to get into Kashmir but the British Army Chief refused to do so. This was the time when peace had prevailed in the Valley.

But unfortunately the ephemeral happiness of October 1947 lost in the gleam of darkness when Mountbatten met Jinnah in Lahore.

November ’47 – Jinnah asked Mountbatten to give him either Kashmir or Junagadh. Later in November, Nehru met Liaquat Ali Khan, the PM of Pakistan. Khan demanded a new impartial government in Kashmir. Nehru wrote to Maharaja, asking him to appoint Abdullah as the new PM of Kashmir and also suggesting him 4 ways to resolve the Kashmir issue, namely:

1. Plebiscite for the whole state to join either India or Pakistan
2. Independent country with defence support both by India & Pakistan
3. Partition: Jammu with India and rest to Pakistan
4. Partition: Jammu & Valley to India, Poonch and beyond to Pakistan

1948 – On January 1^st, India decided to take Kashmir issue in UN on the advice of Mountbatten.

………………….to be continued in a subsequent post.

1. To Sir With Love (E. R. Braithwaite)
2. The Inscrutable Americans (Anurag Mathur)
3. India’s Struggle for Independence (Bipan Chandra)

Currently reading:

1. India After Gandhi (Ramachandra Guha)

Books desperately lined up:

1. Prisoner of the State: The secret journal of Premier Zhao Ziyang
2. The Return of Depression Economics and the Crisis of 2008 (Paul Krugman)

Note that this is the first of its kind – MFI floating an IPO! Sure, its a great news! But it is even greater for ICICI & SBI who are planning to venture big time into this industry. Besides, SKS claims to have garnered support from the QIB’s, which means that the people in this industry are still not very sure about the street investors, but that is again natural, since this is the first time. The presence of QIB’s also implies that there are very little chances of failure.

Talking about faith of urban India in a rural one is like giving a philosophical direction to the IPO but I think at this point of time, when there is an upbeat around, we surely need a broad philosophical perspective than a clinching-between-teeth attitude. The world is looking at this IPO, because the future of the MFI industry lies in it.

The pith of the cement industry i.e. the limestone is one of the most readily available materials in India. The newer technologies are being employed to produce high quality cements. Because of the deregulation of cement industry by the Government of India in 1989, India has seen big private players like ADAG, Jaypee, etc venturing into this field.

Economics of Cement Industry

The all India cement demand is in the vicinity of 190-195 million tonnes and the current installed capacity is around about 200-215 million tonnes. The above figures suggest that the price swings in this industry can be taken care of by the demand-supply balance. In India, the industry is largely driven by individual consumers when compared to markets in the other countries where institutional buying fosters the growth of cement industry.

Another problem with this industry is that cement is a highly taxed product. The indirect taxes constitute about 20 to 25% of the cement cost. To cap it all, the royalty on limestone too has doubled recently.

Challenges

The questions troubling the cement industry are (1) How to maximize the profits? (2) Should retail buying be encouraged? (3) Will institutional demand raise the earnings?

The major challenge that cement industry today faces is that of supply chain and logistics. Cement, being a bulk product demands high transportation costs. 90% of the cement is currently transported by rail or roads. Gujarat based Ambuja cements was the first one to use the commercial sea transportation routes. The absence of intermediate handling facility and containerisation and intermodal transportation makes the transport cost-intensive & do not allow the demand to be fully exploited.

Given these, the growth & profitability of the industry depends on how the logistic-related issues are addressed. It surely requires both foresight and vision from authorities at various levels in the government and industry to meet the above mentioned challenges.

Cyclic nature and economics

Sugar is perhaps one of the most regulated products in India so a slight increase/decrease in its price evokes a strong sentiment from farmers and consumers alike. But before jumping onto the economics of sugar industry, we must understand the cyclic nature of sugar.

One sugar cycle comprises of 3 years of surplus and 2 years of deficit. The next surplus cycle will begin starting from 2010-13. Though the rationale behind this cyclicality is unknown but the general trends in production have been noticed to follow this cycle.

Sugar prices in India fluctuate as often as the level of water in the Ganges. The highest price was recorded as Rs. 44/kg in January 2010. The prices rose to this level in spite of importing 5 million tonnes of sugar in April 2009. The year 2009 saw serious drought-like conditions in India which led to loss in production and thereby enormous fluctuation in prices was recorded. It was Rs. 28 during April-June 2009, Rs. 31 in July-September, Rs. 38 in October-December and a whooping Rs. 44 in January ’10.

Overregulation

The regulation starts right from setting up the Statutory Minimum Price (SMP) for sugarcane. It is the minimum price which the government promises a farmer in case there is a surplus and the market prices go down. Apart from this, producers have to give 20% of their production as levy sugar for sale through the ration shops at less than production cost. So a sugar manufacturer has to compensate the prices in the remaining 80% of the sugar.

Ethanol Diversification

1000 kg of sugarcane produces 100 kg of sugar, 45 kg of molasses and 11 litres of ethanol. Ethanol is an environment friendly automotive tool which has gained currency in many countries particularly Brazil. The ethanol produced in the sugar mills can be put to a very innovative use by doping 5% of ethanol in the fuel. There still are some existing policy decisions in this regard, because of which the technology is not being currently practiced in India.

The future of sugar

According to the experts the future of sugar industry lies in the deregulation of prices. But again we must be critical of the means of the private sector players who will thus try to squeeze the profits of the sugar farmers. Deregulation just like the current petrol prices will necessarily mean increase in the sugar prices. It will surely be a nightmare for the great Indian middle class.

However we can look forward to some partial deregulation like the rules of setting up sugar mills must be eased, SMP should be fixed keeping in mind the agro-monsoon conditions, and the use of ethanol must be encouraged since it provides a solution to the biggest problem of the mankind.

1. KIM JONG IL of North Korea: A personality-cult-cultivating isolationist with a taste for fine French cognac, Kim has pauperized his people, allowed famine to run rampant, and thrown hundreds of thousands in prison camps (where as many as 200,000 languish today) — all while spending his country’s precious few resources on a nuclear program.
Years in power: 16

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2. ROBERT MUGABE of Zimbabwe: A liberation “hero” in the struggle for independence who has since transformed himself into a murderous despot, Mugabe has arrested and tortured the opposition, squeezed his economy into astounding negative growth and billion-percent inflation, and funneled off a juicy cut for himself using currency manipulation and offshore accounts.
Years in power: 30

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3. THAN SHWE of Burma: A heartless military coconut head whose sole consuming preoccupation is power, Shwe has decimated the opposition with arrests and detentions, denied humanitarian aid to his people after 2008′s devastating Cyclone Nargis, and thrived off a black market economy of natural gas exports. This vainglorious general bubbling with swagger sports a uniform festooned with self-awarded medals, but he is too cowardly to face an honest ballot box.
Years in power: 18

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4. OMAR HASSAN AL-BASHIR of Sudan: A megalomaniac zealot who has quashed all opposition, Bashir is responsible for the deaths of millions of Sudanese and has been indicted by the International Criminal Court for war crimes. Bashir’s Arab militias, the janjaweed, may have halted their massacres in Darfur, but they continue to traffic black Sudanese as slaves (Bashir himself has been accused of having had several at one point).
Years in power: 21

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5. GURBANGULY BERDIMUHAMEDOV of Turkmenistan: Succeeding the eccentric tyrant Saparmurat Niyazov (who even renamed the months of the year after himself and his family), this obscure dentist has kept on keeping on with his late predecessor’s repressive policies, explaining that, after all, he bears an “uncanny resemblance to Niyazov.”
Years in power: 4

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6. ISAIAS AFWERKI of Eritrea: A crocodile liberator, Afwerki has turned his country into a national prison in which independent media are shut down, elections are categorically rejected, indefinite military service is mandatory, and the government would rather support Somali militants than its own people.
Years in power: 17

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7. ISLAM KARIMOV of Uzbekistan: A ruthless thug ruling since Soviet times, Karimov has banned opposition parties, tossed as many as 6,500 political prisoners into jail, and labels anyone who challenges him an “Islamic terrorist.” What does he do with “terrorists” once they are in his hands? Torture them: Karimov’s regime earned notoriety for boiling two people alive and torturing many others. Outside the prisons, the president’s troops are equally indiscriminate, massacring hundreds of peaceful demonstrators in 2005 after a minor uprising in the city of Andijan.
Years in power: 20

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8. MAHMOUD AHMADINEJAD of Iran: Inflammatory, obstinate, and a traitor to the liberation philosophy of the Islamic Revolution, Ahmadinejad has pursued a nuclear program in defiance of international law and the West. Responsible for countless injustices during his five years in power, the president’s latest egregious offense was leading his paramilitary goons, the Basij, to violently repress protesters after June 2009′s disputed presidential election, which many believe he firmly lost.
Years in power: 5

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9. MELES ZENAWI of Ethiopia: Worse than the former Marxist dictator he ousted nearly two decades ago, Zenawi has clamped down on the opposition, stifled all dissent, and rigged elections. Like a true Marxist revolutionary, Zenawi has stashed millions in foreign banks and acquired mansions in Maryland and London in his wife’s name, according to the opposition — even as his barbaric regime collects a whopping $1 billion in foreign aid each year.
Years in power: 19

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10. HU JINTAO of China: A chameleon despot who beguiles foreign investors with a smile and a bow, but ferociously crushes political dissent with brutal abandon, Hu has an iron grip on Tibet and is now seeking what can only be described as new colonies in Africa from which to extract the natural resources his growing economy craves.
Years in power: 7

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11. MUAMMAR AL-QADDAFI of Libya: An eccentric egoist infamous for his indecipherably flamboyant speeches and equally erratic politics, Qaddafi runs a police state based on his version of Mao’s Red Book — the Green Book — which includes a solution to “the Problem of Democracy.” Repressive at home, Qaddafi masquerades as Africa’s king of kings abroad (the African Union had to politely insist that he step down as its rotating head).
Years in power: 41

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12. BASHAR AL-ASSAD of Syria: A pretentious despot trying to fit into his father’s shoes (they’re too big for him), Assad has squandered billions on foreign misadventures in such places as Lebanon and Iraq while neglecting the needs of the Syrian people. His extensive security apparatus ensures that the population doesn’t complain.
Years in power: 10

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13. IDRISS DÉBY of Chad: Having led a rebel insurgency against a former dictator, Déby today faces a similar challenge — from one of his own former cabinet officials, among others. To repel would-be coup leaders, Déby has drained social spending accounts to equip the military, co-opted opposition-leader foes, and is now building a moat around the capital, N’Djamena.
Years in power: 20

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14. TEODORO OBIANG NGUEMA MBASOGO of Equatorial Guinea: Obiang and his family literally own the economy, having reportedly amassed a fortune exceeding $600 million while the masses are left in desperate poverty. Equatorial Guinea’s extraordinary oil wealth puts its GDP per capita on par with many European states — if only it were evenly shared. Instead, revenues remain a “state secret.”
Years in power: 31

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15. HOSNI MUBARAK of Egypt: A senile and paranoid autocrat whose sole preoccupation is self-perpetuation in office, Mubarak is suspicious of even his own shadow. He keeps a 30-year-old emergency law in place to squelch any opposition activity and has groomed his son, Gamal, to succeed him. (No wonder only 23 percent of Egyptians bothered to vote in the 2005 presidential election.)
Years in power: 29

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16. YAHYA JAMMEH of Gambia: This eccentric military buffoon has vowed to rule for 40 years and claims to have discovered the cure for HIV/AIDS. (Jammeh also claims he has mystic powers and will turn Gambia into an oil-producing country; no luck yet.) A narcissist at heart, the dictator insists on being addressed as His Excellency Sheikh Professor Alhaji Dr. Yahya Abdul-Azziz Jemus Junkung Jammeh.
Years in power: 16

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17. HUGO CHÁVEZ of Venezuela: The quack leader of the Bolivarian Revolution, Chávez promotes a doctrine of participatory democracy in which he is the sole participant, having jailed opposition leaders, extended term limits indefinitely, and closed independent media.
Years in power: 11

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18. BLAISE COMPAORÉ of Burkina Faso: A tin-pot despot with no vision and no agenda, save self-perpetuation in power by liquidating opponents and stifling dissent, Compaoré has lived up to the low standards of his own rise to power, after murdering his predecessor, Thomas Sankara, in a 1987 coup.
Years in power: 23

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19. YOWERI MUSEVENI of Uganda: After leading a rebel insurgency that took over Uganda in 1986, Museveni declared: “No African head of state should be in power for more than 10 years.” But 24 years later, he is still here, winning one “coconut election” after another in which other political parties are technically legal but a political rally of more than a handful of people is not.
Years in power: 24

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20. PAUL KAGAME of Rwanda: A liberator who saved the Tutsis from complete extermination in 1994, Kagame now practices the same ethnic apartheid he sought to end. His Rwandan Patriotic Front dominates all levers of power: the security forces, the civil service, the judiciary, banks, universities, and state-owned corporations. Those who challenge the president are accused of being a hatemonger or divisionist and arrested.
Years in power: 10

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21. RAÚL CASTRO of Cuba: Afflicted with intellectual astigmatism, the second brother Castro is pitifully unaware that the revolution he leads is obsolete, an abysmal failure, and totally irrelevant to the aspirations of the Cuban people. He blames the failure of the revolution on foreign conspiracies — which he then uses to justify even more brutal clampdowns.
Years in power: 2

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22. ALEKSANDR LUKASHENKO of Belarus: An autocrat and former collective farm chairman, Lukashenko maintains an iron grip on his country, monitoring opposition movements with a secret police distastefully called the KGB. His brutal style of governance has earned him the title “Europe’s last dictator”; he even gave safe haven to Kyrgyzstan’s toppled leader when that country rose up this spring.
Years in power: 16

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23. PAUL BIYA of Cameroon: A suave bandit who has reportedly amassed a personal fortune of more than $200 million and the mansions to go with it, Biya has co-opted the opposition into complete submission. Not that he’s worried about elections; he has rigged the term limit laws twice to make sure the party doesn’t end anytime soon.
Years in power: 28

His mind sees things differently than most of us do. Here are some of his gems:

1. I’d kill for a Nobel Peace Prize.
2. Borrow money from pessimists — they don’t expect it back.
3. Half the people you know are below average.
4. 99% of lawyers give the rest a bad name.
5. 82.7% of all statistics are made up on the spot.
6. A conscience is what hurts when all your other parts feel so good.
7. A clear conscience is usually the sign of a bad memory.
8. If you want the rainbow, you’ve got to put up with the rain.
9. All those who believe in psycho kinesis, raise my hand.
10. The early bird may get the worm, but the second mouse gets the cheese.
11. I almost had a psychic girlfriend…  but she left me before we met.
12. OK, so what’s the speed of dark?
13. How do you tell when you’re out of invisible ink?
14. If everything seems to be going well, you have obviously overlooked something.
15. Depression is merely anger without enthusiasm.
16. When everything is coming your way, you’re in the wrong lane.
17. Ambition is a poor excuse for not having enough sense to be lazy.
18. Hard work pays off in the future; laziness pays off now.
19. I intend to live forever… so far, so good.
20. If Barbie is so popular, why do you have to buy her friends?
21. Eagles may soar, but weasels don’t get sucked into jet engines.
22. What happens if you get scared half to death twice?
23. My mechanic told me, I couldn’t repair your brakes, so I made your horn louder.
24. Why do psychics have to ask you for your name?
25. If at first you don’t succeed, destroy all evidence that you tried.
26. A conclusion is the place where you got tired of thinking.
27. Experience is something you don’t get until just after you need it.
28. The hardness of the butter is proportional to the softness of the bread.
29. To steal ideas from one person is plagiarism; to steal from many is research.
30. The problem with the gene pool is that there is no lifeguard.
31. The sooner you fall behind, the more time you’ll have to catch up.
32. The colder the x-ray table, the more of your body is required to be on it.
33. Everyone has a photographic memory; some just don’t have film.
34. If your car could travel at the speed of light, would your headlights work?