Ramachandra Guha: The Nehru-Gandhi dynasty is clearly on its last legs

Ramachandra GuhaVivek Kaul  
Ramachandra Guha is one of the foremost Indian historians of this era. In his latest book Gandhi Before India (Allen Lane, Rs 899) he chronicles the early life of Mahatma Gandhi. The book focusses on the years Gandhi spent in London and South Africa and how they shaped his ideology and philosophy. Indians who have grown up watching Richard Attenborough’s Gandhi are largely unaware about this part of his life. Hence, the book is a must read for every Indian who wants to know what turned a lawyer called Mohandas Karamchand Gandhi into Mahatma Gandhi.
Guha feels none of the political parties of today follow the principles of Gandhi, even though they claim so. “Various politicians and political parties claim to speak in the name of Gandhi: the Congress because he was in that party for a very long time, Narendra Modi because he was also a Gujarati, the Aam Admi Party(AAP) because its main leaders were, like Gandhi, professionals who became social activists. All these claims are dubious. The cronyism and corruption of the Congress is worlds removed from Gandhi or Gandhism; as is the megalomania and sectarianism of Mr Modi. As for the AAP, their claims to be Gandhian in inspiration are nullified by the negative nature of their politics, which is based so completely on carping attacks on other parties,” he told Firstpost in an interview. 

Intellectually who are the people who had the foremost impact on Gandhi in the years that he spent in South Africa?
Gandhi’s main mentors were a Gujarati poet and thinker, Raychandbhai; the pioneering Indian nationalist and social reformer, Gopal Krishna Gokhale; and the great Russian writer, Leo Tolstoy. He had an extensive correspondence with all three. Gandhi also spent a great deal of time with Raychand in Bombay in 1891-2, and with Gokhale in Calcutta in 1902 and again in South Africa in 1912. Tolstoy he never met, but perhaps it was the Russian who had the greatest influence on his moral and social philosophy. The idea of religious pluralism was common to all three of Gandhi’s mentors; the idea of ending caste and gender discrimination he got from Gokhale; the practice of abstinence and a simple life from Raychand and Tolstoy. Non-violence was in part an adaptation and refinement of Tolstoy’s pacifist ideals.
You also point out that Rabindranath Tagore was not the first man to call Gandhi a Mahatma. It was his doctor turned jeweller friend Pranjivan Mehta. Can you tell us a little bit about that as well as the kind of relationship Gandhi shared with Mehta?
This remarkable associate of Gandhi has been treated most casually in earlier biographies. But, as I show, their relationship was absolutely fundamental to the making of the Mahatma. Gandhi and Mehta spent time together in London, Rangoon, Durban; and wrote to one another at least once a week all through the period he was in South Africa. Mehta was the Engels to Gandhi’s Marx: that is to say, his closest friend, his most steadfast and consistent patron, and the first man to recognize and proclaim his greatness.
One of the most moving parts of the book is the relationship that Gandhi shared with his sons particularly Harilal, his eldest son . Do you think he failed as a father?
Gandhi had excessively high expectations of both Harilal and his second son Manilal. He wanted them to be perfect satyagrahis, perfect brahmacharis. He can certainly be said to have failed as a father. This is not uncommon—writers, artists, activists obsessed with their calling often their spouses and children very badly indeed.
You write in great detail about the family of Gandhi being a very close part of his struggle in South Africa. Even his wife went to jail for the cause. What intrigues me is that none of his sons or nephews played an active part in Indian politics once Gandhi returned to India. Why did that happen?
Yes, in the context of Indian politics today, Gandhi’s refusal to promote his family to positions of power and authority is remarkable. He even willed all his writings to a Trust of which none of his sons were members, thereby denying them any financial benefits from what he knew could be a very profitable legacy.
Would it be fair to say that Gandhi wasn’t born great, but became great through a series of events and experiences?
Gandhi certainly had great physical and moral courage. He had a tremendous capacity for hard work. He had an unusual ability to cultivate friendships across social boundaries. He was curious about other ways of living and thinking. Even so, had he succeeded as a lawyer in Bombay he would never have become a major political figure. Had he not lived in the diaspora he would not have appreciated the religious and linguistic heterogeneity of India. So, in this sense, it was a series of accidental encounters that helped grow Gandhi as a leader, thinker, and social activist.
Has Gandhi’s concept of satyagraha been abused in independent India (particularly politicians deciding to go on a fast for anything and everything)? How relevant is the philosophy of Gandhi in India of today?
Yes, of course, politicians have made a mockery of Gandhian techniques of protest by their one-day fasts and their dharnas and rasta rokos. However, Gandhi’s ideas do in many ways remain relevant to India and the world. His principled opposition to violence, his promotion of inter-faith harmony, his precocious environmentalism, and his practice of an open and transparent politics are all worth studying, and perhaps emulating in some part, today.
Do you see any political party in India being close to the principles that Gandhi had espoused? Various politicians and political parties claim to speak in the name of Gandhi: the Congress because he was in that party for a very long time, Narendra Modi because he was also a Gujarati, the Aam Admi Party because its main leaders were, like Gandhi, professionals who became social activists. All these claims are dubious. The cronyism and corruption of the Congress is worlds removed from Gandhi or Gandhism; as is the megalomania and sectarianism of Mr Modi. As for the AAP, their claims to be Gandhian in inspiration are nullified by the negative nature of their politics, which is based so completely on carping attacks on other parties.
But there must be some people who still follow Gandhian principles?
The spirit of Gandhi animates many non-party social movements and groups. Remarkable Indians such as Chandi Prasad Bhatt, founder of the Chipko movement, and Ela Bhatt, founder of SEWA, are outstanding exemplars of Gandhian practice. Other activists working away from the media gaze in the spheres of rural health, primary education and similar spheres are also deeply inspired by Gandhi. A flavour of how Gandhi lives on in civil society movements in India is captured in Rajni Bakshi’s excellent book Bapu Kuti.
In a recent interview you said “My fantasy is BJP without the RSS and the Congress without the Gandhis.” Do you see the country getting anywhere close to that fantasy?
Not immediately, but there are some slight signs and indications that my fantasy is perhaps a few small steps closer to being realized. The Nehru-Gandhi dynasty is clearly on its last legs. The charisma of the family is fading: fewer and fewer voters remember Indira or even Rajiv. Rahul Gandhi lacks ideas as well as energy. Many people in the Congress are exasperated with his lack of initiative and his penchant for making howlers. If the Congress does very badly in the next elections, then it will be hard for the family to assert its leadership in the manner it has been accustomed to in the past.
What about the BJP?
In organizational and ideological terms, the BJP remains closely tied to the RSS. But again, young voters have no time for the medievalist mind set of the RSS. Many of them are flocking to the BJP because of their disgust at the corruption of the Congress, not because of any attraction for the idea of a Hindu Rashtra. In my lifetime (I am now 55) I may not see my fantasy being fulfilled. But I hope the Indian experiment with democracy and pluralism extends into the lifetimes of my children, grandchildren, and beyond. So I am not so despairing!
In the first chapter of your book you write that “of all modern politicians and statesmen, only Gandhi is an authentically global figure.” Could you please elaborate on that?
Gandhi’s name is still invoked, often positively and sometimes negatively, all across the world, sixty-five years after his death. His ideas on non-violence, religious harmony, and environmental prudence are actively debated in countries he never even visited. No other 20th century leader, not Churchill, not Roosevelt, not Stalin or Lenin, has had anywhere this kind of salience or influence. That is why I maintain that Gandhi is the most interesting and important political figure of the modern world.
The interview originally appeared on www.firstpost.com on November 6, 2013

(Vivek Kaul is a writer. He tweets @kaul_vivek) 

How exposing corruption in India is different from China

IMG_8757.JPGVivek Kaul

Does exposing corruption work all the time? “(In India) every media outlet seems to have a story about corruption. But in the context of this hyper-transparency, the moral outrage is lost. Additional information on corruption does little to move the needle. So, yes, transparency is a potent tool against corruption particularly when you’re dealing with low aggregate levels of transparency…In high aggregate levels of transparency, the next new story about corruption has to be followed up with real enforcement for it to be effective,” says Karthik Ramanna, Associate Professor of Business Administration at the Harvard Business School. Ramanna is also the faculty for the Leadership and Corporate Accountability-India (LCAI) programme being offered by Harvard Business School in India, later this month. In this interview he speaks to Firstpost about various online attempts around the world to tackle corruption. 
What impact does corruption have on economic growth in a country? Can you give us some numbers that research in economics has thrown up?
Corruption has emerged over the last five to ten years as a big issue both in the public discourse as well as among corporate managers, particularly in emerging markets. A 2012 World Economic Forum survey of corporate managers and senior leaders from China, Russia, and India identified corruption as one of the top five issues in each of these countries. However, it’s hard to directly measure , the impact of corruption because you can only observe corruption when it is surfaced in a legal context. But, of course, not all cases of corruption will be prosecuted to the extent that there are limits to legal resources and that prosecutors themselves or the judicial system itself is corrupt. So it’s hard to estimate this beyond surveys.
How much does corruption impact the amount of foreign direct investment and foreign portfolio investments coming into any country?
It is in the long-term interest of any free-market society to have an independent judiciary, an effective legal system, and strong democratic institutions that promote an accountable and trustworthy government. Corruption detracts from those long-term objectives and thus compromises the basis of a free-market system. Corruption might help a foreign investor seek short-term recourse to a problem, but, in the long-run, it destroys the foundation for capitalism and negatively impacts foreign investment. This has been shown in the context of several emerging-market nations.
You have written that “corruption is the top issue in emerging market economies — and transparency is the most potent tool available to combat corruption.” Could you explain that in some detail through some examples?
One of the things I’ve been exploring over the last two to three years is the role of transparency as an instrument of accountability against corruption in different emerging-market contexts. In Russia, where I’ve studied the work of Alexey Navalny and his web platform RosPil.info, transparency seems to have quite a large impact on instances of corruption. In part, I think this is because the aggregate level of transparency in this context is low. In Russia, you’re dealing with a mainstream media environment that generally does not report on public corruption and that is pro-government. In that context, even small amounts of information can have a profound impact. So when RosPil.info releases information about a potentially corrupt government tender, it seems to have an impact in how that tender is re-evaluated or reassessed.
What about a country like India?
Switching to a country like India, where you encounter a hyper-transparent environment, and you have, for all practical purposes, a vibrant, free press, in this context reporting on corruption has almost become a national sport. Every media outlet seems to have a story about corruption. But in the context of this hyper-transparency, the moral outrage is lost. Additional information on corruption does little to move the needle. So, yes, transparency is a potent tool against corruption particularly when you’re dealing with low aggregate levels of transparency. But there seems to be a nonlinearity associated with the way transparency is effective against corruption. In high aggregate levels of transparency, the next new story about corruption has to be followed up with real enforcement for it to be effective.
In a HBR article you wrote that “Private Citizens are also joining the fight against corruption. Some are making the effort via for-profit ventures.” Could you discuss this in some detail with global examples?
Caijing is an example of a for-profit venture that is fighting corruption in China. It is a magazine that is about 15 years old, and was established by a gentleman called Wang Boming who is a very central figure in the development of capital markets in China. Mr. Wang was asked by the State Council, which is one of the highest organs of the state in China, to develop a financial press in the country in the late 90s. And with that charge, he established Caijing. Mr. Wang was educated in the United States and has worked in the media environment in the West. He is committed to a long-term vision of a free and transparent press in China. That being said, he has built his magazine very much on the principle of working with the state rather than opposed to it. The strategy of an organization such as Caijing, which embeds itself as a long-term ally of the government, working to create conditions that make markets work, might be, in fact, the approach that works best.
Could you elaborate on that?
Over the last 15 years Caijing has built a reputation for breaking stories about corruption and corporate governance malfeasance in China, including those involving very senior officials in the country, but has done so in a very deliberate and measured way. It has earned international respect and recognition for its coverage, but at the same time doubts remain about how closely aligned it is with the state. Mr. Wang has in part pursued this strategy because he’s running a for-profit business, which is listed on the Hong Kong Stock Exchange. He very much needs to turn a profit and needs to survive to tell another story another day. This is not a one-shot game for him, this is a long-term game. And in part it’s that sustainability aspect that gets him to work with rather than opposed to state institutions.
That’s interesting…
One could argue that the long-term profit motive is what has built that sustainability into the organization. The interesting thing about this long-term approach is that Caijing has over time been able to push the limits of subjects that it can acceptably cover. Fifteen years ago when Boming started the magazine, it was hard even to touch local government officials or report on local government officials. Today he can report on corruption at the local government level without much concern about censorship. It’s only if he’s dealing with top national officials that there is some concern around those issues. Thus, there’s been a gradual evolution in a way which Boming would consider progress.
Are there any such examples in India where for profit ventures are fighting corruption?
IPaidABribe is a not-for-profit organization leveraging transparency and both the ubiquity and the anonymity of the internet to bring greater light to petty bribery or what is called “retail corruption.” This is the corruption necessary to turn on your water supply or to turn on your electric supply or to pay your property tax bill. In some ways retail corruption is more dangerous that “wholesale corruption,” the massive bribes paid for public licenses. Retail corruption corrodes not just a few; it corrodes the ethic of an entire nation. Then when in fact citizens do observe instances of wholesale corruption, they appear less egregious. Part of what the website ipaidabribe.com does is to leverage the anonymity of the internet to bring back some shame, if you must, to corruption or to the payment of bribes.
Could you tell us a little more about it?
The purpose of something like ipaidabribe.com is to restore a national consciousness to the idea that bribe-paying is unusual, it is ethically wrong, as opposed to something that is a common and necessary for day-to-day existence. The next challenge for reformers in this area is how to close the loop. What happens after you report your bribe? As I said earlier, when we are in the context of hyper transparency, if you’re dealing with an environment where reporting on corruption is widespread, it’s important to have institutions to close the loop around corruption. It’s important to be able to give people some sense of closure. It’s not simply about saying, “Yes, I paid a bribe,” it’s about how is justice in fact being meted out to the corrupt.
What do you think about the New Companies Bill? Is it fair for a government to mandate that businesses spend an ‘X’ amount of money on corporate social responsibility?
Milton Friedman famously said that the social responsibility of business is to increase its profits. I think that the general spirit of the New Companies Bill is the idea that companies have responsibilities beyond delivering on shareholder profits. This idea is broadly consistent with a lot of the research that has been done since Professor Friedman wrote that article in 1970. In particular, we’ve come to see that there are at times “negative externalities” associated with corporate profit-seeking activity, which is to say that there are costs imposed on labour, on customers, and on local communities from profit-seeing activity. This is especially true in the presence of what we recognize as “institutional voids,” that is when the institutional architecture of the market system is underdeveloped.
Can you give us an example on this? 
For example, in India, where courts are clogged and access to justice is notoriously slow, customers and employees often rely on corporate responsibility – rather than legal recourse – for their well being. In this context, unbridled profit-seeking activity could impose significant costs on society. So, it is in the long-term interests of corporations to take a more nuanced view of what their objective function should be. It is not viewed as a distraction or as a luxury, but as something very core to the business. As managers start taking a long-term view on their business, they recognize that incorporating corporate responsibility into corporate strategy is good business and good leadership.
Anything else you would like to add to that?
All this said, the idea of mandating a 2% of net profit expenditure on CSR, as the new law does, strikes me as aggressive in that it’s not clear that every company has tightly developed a way to integrate corporate responsibility into its strategy. It’s not clear that every company has the right ideas and the right vehicles to invest this money on behalf of their shareholders and society. I think about this Act as, on the one hand, recognizing a moral imperative for companies to take their social responsibility seriously, but, on the other hand, potentially opening the door to considerable value destruction by mandating such activity.
Do you think companies are seriously following this or will they find accounting tricks to get around it?
I wouldn’t be surprised if some companies found ways to circumvent this mandate, by pursuing activities that ostensibly seek to serve the public interest, but in practice only serve the interests of, say, family members of founders and managers. I could also see ways in which this sort of mandate could become an avenue to bribe politicians by, for example, contributing to the charities of powerful ministers. There are many ways in which this law could be misused. Again, I think we don’t want to lose sight of the ethical principle behind the law, but we must also recognize that mandating corporate expenditure to this effect might be stepping too far.
The interview originally appeared on www.firstpost.com on November 5, 2013.
(Vivek Kaul is a writer. He tweets @kaul_vivek

 

Cong needs to study 1936 US Election before seeking ban on opinion poll

digvijay-singh-313-devilsVivek Kaul  
A few days back the Congress party wrote to the Election Commission that lotuses in full bloom in various regions of Madhya Pradesh should be hidden, so that voters aren’t drawn towards the Bhartiya Janata Party (BJP). The state goes to the polls later this month. Lotus is the electoral symbol of the BJP.
If one were to extend the argument a little further, other parties could demand that Indians hide their hands when in public, before elections are due to happen. Hand is the electoral symbol of the Congress party.
Also, when elections are due, elephants should be hidden, given that they are the electoral symbol of the Bahujan Samaj Party and Asom Gana Parishad. People should not be allowed to move around in cycles because they are the electoral symbol of Samajwadi Party. Large parts of India where electricity is non existent should not be using the lantern because it is the electoral symbol of the Rashtriya Janata Dal. People should stop looking at their clocks because it is the electoral symbol of the Nationalst Congress Party. And this list can go on.
The Election Commission rejected the unreasonable demand of the Madhya Pradesh unit of the Congress party to hide lotuses. It termed the demand “absurd” and “an insult to the intelligence of the voter”.
After this, the Congress party has made another such absurd demand. It wants opinion polls to be banned. The position of the party is well summarised 
in a statement made by the party general secretary Digvijay Singh. As he put it “These have become a farce. They should be banned altogether. The kind of complaints, information that I have got, show that anybody can pay and get a survey as desired…Wondering how a few thousand people could predict election trends for a country of 1.2 billion people…It has become a racket. So many groups have sprung up.”
This statement needs to be examined threadbare.
A straightforward reason for the Congress party wanting opinion polls to be banned is the fact that all the opinion polls expect the party to perform badly in the forthcoming state assembly elections, as well as the Lok Sabha elections, due next year. 
Other parties like BSP and JD(U), which are similarly on a weak wicket, want the opinion polls to be banned as well.
A part of Singh’s statement was that “ The kind of complaints, information that I have got, show that anybody can pay and get a survey as desired.” This is a very serious charge. If Singh has any such information he should bring it to the attention of the nation, instead of just making vague statements. If there is any truth to the accusations, the Election Commission can investigate it and then make a reasonable decision.
Singh further wondered how “how a few thousand people could predict election trends for a country of 1.2 billion people.” Even the most sophisticated opinion polls do not have a sample size more than a few thousand people.
Take the case of opinion polls which happen in the United States before a Presidential election to predict to who is likely to be the next President. The sample size of most such surveys is less than 1500. This can be clearly seen 
from the following link.
Also, there is a great story from the 1936 US Presidential elections which is very relevant in the context what Singh said. The election had the incumbent President Franklin D Roosevelt, belonging to the Democratic Party, facing Alfred Landon of the Republican Party, who was also the governor of the state of Kansas.
Literary Digest one of the most well respected magazines of that era predicted that Landon would get 57% of the vote whereas Roosevelt would get 43%. Roosevelt got 62% of the vote whereas Landon got only 38%. The survey was way off the mark. Roosevelt got 19% more vote than the survey had predicted. This is believed to the largest ever sampling error in a major opinion poll.
The Literary Digest poll had a sample size of around 2.4 million people. At the same point of time George Gallup predicted a victory for Roosevelt using a much smaller sample size of 50,000 people.
There were problems with the way Literary Digest had chosen its sample. The sample was not a representation of the population. 
As a University of Pennsylvania Case Study on the issue points out “The first major problem with the poll was in the selection process for the names on the mailing list, which were taken from telephone directories, club membership lists, lists of magazine subscibers, etc. Such a list is guaranteed to be slanted toward middle- and upper-class voters, and by default to exclude lower-income voters. One must remember that in 1936, telephones were much more of a luxury than they are today. Furthermore, at a time when there were still 9 million people unemployed, the names of a significant segment of the population would not show up on lists of club memberships and magazine subscribers.”
Hence, the sample was skewed towards Republicans. In the United States, the upper class typically tends to support the Republican Party, whereas the poor largely go with the Democratic Party. Given this, it predicted a victory for the Republican candidate Landon.
Thus, it is important to ensure that the chosen sample is a good representation of the population as a whole. Small samples can be very effective as long as they are not riddled with sampling errors. “A badly chosen big sample is much worse than a well-chosen small sample,” concludes the University of Pennsylvania cited earlier.
Another article 
on the website of Constitution Rights Foundation makes a similar point “It is important to point out that large, national polling organizations have small national samples of under 2,000 that predict quite accurately for the entire electorate.” As statistical techniques have evolved samples much smaller than the sample of 50,000 people used by Gallup, to predict the 1936 elections, can give good results. The moral of the story is that bigger is not necessarily better. Something that Digivijay Singh needs to understand.
Opinion polls are also a very important part of the democratic process. People have a right to know what a state, a region or the nation as a whole is thinking on a particular issue, at a given point of time.
But Congress and democracy do not go together. In 1959, the then Congress prime minister Jawahar Lal Nehru dismissed the government of Kerala led by the communist chief minister EMS Namboodiripad, by invoking the controversial article 356. Namboodiripad’s government was the first democratically elected Communist government anywhere in the world.
This set the precedence for Nehru’s daughter Indira Gandhi and she turned dismissing democratically elected non Congress governments into an art form. Estimates suggest that she dismissed nearly 59 state governments during her several tenures as the Prime Minister of the nation.
She, egged by her younger son, Sanjay, declared a state of internal emergency on June 26, 1975. It stayed till March 21, 1977. During this period the leaders of opposition parties were put into jail and the fundamental rights of the citizens of this country remained suspended. The newspapers were heavily censored. Democracy came to a standstill during the period of nearly 19 months the country was in a state of emergency.
The senior most posts in the Congress party have been perpetually reserved for the Gandhi family and there have been no elections for the same. Given this, it is hardly surprising that the leaders of the Congress party are making demands for opinion polls to be suspended. They go against the party’s idea of democracy.
The article originally appeared on www.firstpost.com on November 5, 2013

(Vivek Kaul is a writer. He tweets @kaul_vivek) 

Sensex record high: When the bull met an old-time investor

bullfightingVivek Kaul  
So your horns are shining,” he said.
“Yes,” said the bull “with the BSE Sensex at an all time high and all that.”
“You must be really happy today?”
“Yes. Its taken me nearly six years to get there,” replied the bull. “The last time the Sensex reached these levels was in early January 2008.”
“Yes, I know. Its been a tough ride.”
“But why are you so sad?” asked the bull. “I don’t see any champagne bottles lying around.”
“You know the first time I invested in the stock market was in late 1991.”
“Ah, seems like you are old timer,” said the bull. “Your white hair should have told me that.”
“And I made a few good gains. Got my friends and family to invest as well.”
“Yes, yes. That’s a good thing to do. If there is a good deal going, no harm in friends and family also benefiting a little.”
“Then on April 23, 1992, it all came crashing.”
“Oh, what happened?” asked the bull.
Arre Harshad bhai‘s game came to an end.”
“Harshad who?”
“Ah. You are a bull. How come you have never heard of him?” he asked.
“So tell me then.”
“Harshad Mehta.”
“Ah. Now I remember. My father used to tell me about him. He was the Big Bull among us small bulls.”
“Yes. That’s what they called him when he drove around in his Lexus. He was the Amitabh Bachchan of stock brokers.”
“Oh, really?” asked the bull.
“But then his luck ran out. All he had been doing was siphoning off money from the banking system and investing it into the stock market.”
“And that drove up the market?”
“It sure did. The system finally caught up with him. And a huge number of cases were filed against him. He died on December 31, 2001, in a jail in Thane. At that time a decision had been made in only in one of the many cases that had been filed against him.”
“You must have lost a lot of money?”
“Yes, I did. But then I told myself, only if I had got out at the right time I would have made a lot of money.”
“Yes, that is the trick,” said the bull.
“And then in 1994, a lot of new companies started hitting the stock market with their initial public offerings (IPOs). And my brother-in-law had become a broker by then.”
“That’s cool.”
“And he asked me to put some money in these companies and I did.”
“You must have surely made money there. IPOs are a sure shot way of making money,” said the bull.
“Actually I did not. These companies simply took the money and disappeared. I guess no one ever made a proper estimate of how much money was looted. But it must have run into thousands of crores,” he said.
“Oh, so you have been bitten by the stock market, twice.”
“Then I took a break from the stock market and decided to go back to the good old fixed deposit.”
“But fixed deposits are boring,” jeered the bull.
“Oh, sure they are,” he replied. “But they ensure safety of capital.”
“And you never invested in the stock market after that?”
“Well I held out till 2000.”
“Then what happened?”
“I saw everyone around me making money in what came to be known as K-10 stocks.”
“Yes, I have heard of K-10,” said the bull. “Some of those stocks are still around.”
“So K-10 stocks were stocks which were a favourite with the broker Ketan Mehta.”
“Yes, another Big Bull.”
“These included stocks were Aftek Infosys, DSQ Software, Global Telesystems (GTL), Himachal Futuristic Communiations Ltd (HFCL), Ranbaxy Labs, SSI, Silverline, Satyam Computers, Pentamedia Graphics and Zee Telefilms.”
“Some of these names are still around.”
“Yes, they are. Also, around the same time the dotcom boom was also on. Hence, the price of information technology stocks was also going through the roof.”
“Yes, I remember that. I was just starting my innings in the stock market then,” said the bull.
“So someone told me there is this company called Infosys, you should invest in that.”
“And you did?”
“Yes I did. And this time I decided to do some research.”
“Yes, research is a must before investing in the stock market,” said the bull, making another motherhood statement.
“The stock price had shot up from around Rs 2000 (Rs 10 paid up) in January 1999 to Rs 12,000 (Rs 5 paid up) in March 2000.”
“Massive returns.”
“Yes. I knew that the stock was overpriced.”
“But you still bought?”
“Yes. Well I thought I was smarter than the others and would be able to find a greater fool to unload my shares on.”
“And that did not happen?” asked the bull.
“No, it did not. And I was stuck with huge positions in IT stocks. In fact, I found a beautiful explanation of how big a fool I was in a book called Stocks to Riches written by stock broker Paragh Parikh. Parikh wrote “In the financial year 2000, Infosys reported revenues of Rs 882 crore. If we were to compound this figure at 85% annually for 10 years (as some people believed the growth would continue), then in 2010, Infosys would report revenues of a staggering Rs 4,14,176 crore. At that time, assuming a market capitalisation of 100 times revenues (similar to what Infosys was quoting at its peak), it would put Infosys’ value at $9.2 trillion. The GDP of the US was around the same figure!””
“Oh, freak.”
“That was how stupid the Infosys trade was at that point of time.”
“True.”
“The system also caught up with Ketan 
bhai. He was also siphoning off money from banks and investing it into the stock market. So after this I decided enough is enough, and retired from the stock market. I placed all my money in fixed deposits, post office savings schemes and some of it went into real estate.”
“And you lived happily ever after?” asked the bull.
“Only bulls can do that,” he replied.
“Then?”
“Well the market started to rally again sometime in 2003. But I managed to resist for a few years. Then one day, my brother in law, who had become an insurance agent by then, came to me.”
“And then?”
“He told me, 
ke boss, forget stock market, too much risk. You should try this new product called unit linked insurance plan (Ulip).”
“And you invested?”
“Not immediately. I resisted for a while. But finally I took the plunge in January 2008.”
“Ah, not the best time to invest.”
“Yes.”
“But now with the Sensex crossing its previous all time high, your investment must be in positive territory again.”
“Nah. It took me two years to figure out the Ulip structure, it was so complicated. My brother in law was paid a huge commission for selling me the Ulip. That commission was recovered from me as a premium allocation charge. Then there were other charges like policy administration charge, and what not. So my investment is still in the red.. Only insurance agents made money of Ulips.”
“That’s sad,” said the bull.
“Yes, it is,” he replied. “Hopefully, I should be able to stay away from the market from now on.”
“But who are you?”
“Oh, I didn’t tell you,” he replied. “I am the Indian retail investor who lives in perpetual hope. 
Wo subah kabhi to aayegi.
This article originally appeared on www.firstpost.com on November 1, 2013
(Vivek Kaul is a retail investor who has been religiously continuing with his SIPs since 2006 in the hope that he will make money one day. He tweets @kaul_vivek)