Business

Satyam scam: Ramalinga Raju, the man who knew too much, gets 7 years in jail

Ramalinga_Raju_at_the_2008_Indian_Economic_Summit
A special court in Hyderabad found all the ten accused in the Satyam scam guilty of cheating, forgery, destruction of evidence and criminal breach of trust. This includes the founder and the Chairman of the company B Ramalinga Raju.
The decision came more than six years after the scam first came to light. On January 7, 2009, Raju wrote a letter to the board of directors of Satyam Computer Services, in which he admitted to cooking the books of the company. A copy of the letter was sent to the stock exchanges as well as the Securities and Exchange Board of India.
In this letter Raju admitted to inflating the cash and bank balances of the company by Rs 5,040 crore. The company’s total assets as on September 30, 2008, stood at Rs 8,795 crore. 
Of this cash and bank balances stood at Rs 5,313 crore which was nearly 60% of the total assets.  This was overstated by Rs 5,040 crore. The company basically had cash and bank balances of less than Rs 300 crore.
Raju also admitted to fudging the last financial result that the company had declared, for the period of three months ending September 30, 2008. The company had reported revenues of Rs 2,700 crore, with an operating margin of 24% of revenues or Rs 649 crore. These numbers were made up. The actual revenues were Rs 2,112 crore with an operating margin of Rs 61 crore or 3% of the total revenues.
So, Satyam had made a profit of Rs 61 crore but was declaring a profit of Rs 649 crore. The difference was Rs 588 crore. The operating profit for the quarter was added to the cash and bank balances on the balance sheet. Hence, cash and bank balances went up by an “artificial” Rs 588 crore just for the three month period ending September 30, 2008.
This was a formula that Raju had been using for a while. First Satyam over-declared its operating profit. Once this fudged operating profit was moved to the balance sheet, it ended up over-declaring its cash and bank balances. And this led to a substantially bigger balance sheet than was actually the case.
The company had total assets of Rs 8,795 crore as on September 30, 2008. Once the Rs 5,040 crore of cash and bank balances that were simply not there were removed from this, the “real” total assets fell to a significantly lower Rs 3,755 crore.
Raju went on to say that: “The gap in the Balance Sheet has arisen purely on account of inflated profits over a period of last several years (limited only to Satyam standalone, books of subsidiaries reflecting true performance). What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years.”
What was Raju upto? Raju’s fraud was no Enron, where complicated derivative transactions were used to boost revenues as well as profit. He had been cooking the books since 2003 by simply over-declaring revenues and profits. In the process he ended up boosting his balance sheet as the cash and bank balances kept going up.
So, how did Raju manage to boost revenues? In order to do this Raju created fictitious clients with whom Satyam had entered into business deals. This was again something akin to Enron, which essentially entered into business deals with its subsidiaries. The subsidiaries paid Enron for the deal by borrowing money. While the revenues brought in from the subsidiaries was recorded by Enron, the debt that they had taken on, wasn’t.
Getting back to Raju, in order to record the fake sales he introduced 7000 fake invoices into the computer system of the company. He couldn’t stop at this.
The clients were fake. Fake clients could not make real payments. Given this, the company kept inflating the money due from its clients (or what Raju called debtors position in his letter).
Further, once fake sales had been recorded, fake profits were made. And fake profits brought in fake cash which needed to be invested somewhere. This led to Raju creating fake bank statements(forged fixed deposit receipts) where all the fake cash that the company was throwing up was being invested.
Raju then tried to use this “fake cash” and buy out two real estate companies called Maytas Properties and Maytras Infra (opposite of Satyam and promoted by the family) for a total of $1.6 billion. But this did not work out. As Raju said in his confessional statement: “The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. Maytas’ investors were convinced that this is a good divestment opportunity and a strategic fit. Once Satyam’s problem was solved, it was hoped that Maytas’ payments can be delayed.”
The idea was to have some “real” assets against all the “fake” cash that the company had managed to accumulate. But that did not happen and after this, Raju had no way out but to come clean.
The question is how could Raju run such a big scam for such a long period of time. Satyam’s accounts were audited by Price Waterhouse, a member-firm of PricewaterhouseCoopers International Ltd — since the financial year 2000-2001.
The auditor had no clue that Satyam’s assets were overstated by more than Rs 5,000 crore. When the scam first broke out a middle level executive from a Big 4 consulting firm told me: “All the auditor needed to ask was the bank statements of the various banks in which this (supposed) cash had been deposited or mutual funds it had been invested in. This is overstatement of Rs 5,000 odd crore we are talking about, not Rs 500.” The auditor clearly did not do that.
The auditor is paid to ask questions; in this case it seems to have been paid not to ask any. The company couldn’t have hoodwinked the investors without the auditor being on its side. This was no complicated accounting fraud like Enron was.
The many analysts who covered Satyam also did not have any clue about the fact that the profits as well as revenues of Satyam were fake. Brokerage analysts who follow companies need to keep companies in a good humour. Without that, they run the risk of being given limited or at times no access to the company, at all. This explains why none of the analysts caught on to what was happening at Satyam. It also explains why the number of sell recommendations on stocks put out by brokerage analysts are lower when compared to the number of buy recommendations that brokerages put out.
And finally we come to the media. It had no clue of what was happening at Satyam. One reason for this lies in the fact that the Indian media over the years has been extremely taken in by the IT companies and the people who run them.
The case with Satyam’s Raju was no different. Lot of magazines and newspaper wrote stories on him and painted him as a person who could do no wrong. This blinds investors, media and experts who follow a company. This comes from the need of the media to create a story around the individual.
As Nassim Nicholas Taleb writes in his book Fooled by Randomness on how the Halo effect around a CEO is built up by the media: “We would get very interesting and helpful comments on his remarkable style, his incisive mind, and the influences that helped him achieve that success. Some analysts may attribute his achievement to precise elements among his childhood experiences. His biographer will dwell on the wonderful role models provided by his parents; we would be supplied with black and white pictures in the middle of the book of  great mind in the making.”
Something similar had happened with Satyam as well. And given this the media expected Satyam to do no wrong. The Halo effect was clearly at work in case of Satyam as well. Investors could see Raju doing no wrong. Raju even sold his shares in Satyam to fund social causes. How could such a man be a fraud? When the Halo effect is at work, the ability to ask incisive pointed questions clearly goes down, and that’s what happened in Satyam’s case as well.
So, while Raju ran his fraud, the auditor slept, the analysts slept and so did the media. To be fair, the media did an excellent job of exposing Raju and his many other ‘shenanigans’ after he had confessed.
Now more than six years later, the first decision in the Satyam scam has been made. Of course, we haven’t seen the last of this case, given the slow pace at which our judicial system works.
Stay tuned.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

The column was originally published on Firstpost on Apr 9, 2015

Don’t confuse a great company with a great stock

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Vivek Kaul


“Buy great companies,” is a cliché one often hears from people who make a living out of peddling stock market tips. But what they don’t bother to tell us is “how do you identify a great company?” And even if one has done that, does a great company always make for a great stock? Or is the timing of buying the stock equally important?
Gary Smith, answers a part of this question in his book Standard Deviations—Flawed Assumptions, Tortured Data and Other Ways to Lie With Statistics. He takes the example of an American company called Sears. It was dropped on November 1, 1999, from the Dow Jones Industrial Average (Dow), which is one of America’s premier stock market indices. Stocks which are a part of the Dow are supposed to be “substantial companies—renowned for the quality and wide acceptance of their products or services—with strong histories of successful growth.”
Sears was one of America’s biggest success stories. It sold everything from watches to toys and even ready to assemble houses. It had been a part of the Dow for 75 years before it was dropped. It was replaced by Home Depot.
So why was Sears dropped and replaced with Home Depot? “Sears…was struggling to compete with discount retailers like Walmart, Target and yes, Home Depot. Revenues and profits were falling, and Sears’ stock price had dropped nearly 50 percent in 6 months. Home Depot on the other hand, was booming..and was opening a new store every 56 hours,” writes Smith.
The question is if a stock is dropped from an index and replaced by another stock, which stock gives better returns in the days to come? The stock which is added to the index? Or the one which is dropped?
Common sense tells us that the stock which is added to the index is the one that should give us better returns. But that is not what happened in this case. Sears gave a return of 103% over the next five and a half years, before it was bought out by Kmart. On the other hand Home Depot lost 22%.
Interestingly, in 1999, four substitutions were made to the Dow—Home Depot, Microsoft, Intel and SBC. These stocks became a part of the Dow at the cost of Sears, Goodyear Tire, Union Carbide and Chevron. All the four stocks that became a part of the Dow were great companies. Nevertheless, they performed poorly over the next ten years.
An investment of $ 2,500 each in the four stocks that were added to the Dow would have been worth $6,604 ten years later. An investment of $2,500 each in the four stocks that were deleted from the Dow would have been worth $16,367 ten years later.
The basic point that comes out of this example is inherently simple. As Smith points out: “No matter how good the company, we need to know the stock’s price before deciding whether it’s an attractive investment.”
Another great company that Smith talks about in his book is IBM. In 1978, the earnings of IBM had been growing at about 16 % per year (adjusted for inflation) for more than 50 years. A saying that was popular at that point of time was: “No purchasing manager ever got fired for buying IBM computers, and no portfolio manager ever got fired for buying IBM stock.”
Given this, many portfolio managers recommended IBM stock in 1978 and predicted that its price would triple over the next ten years. Based on the earnings that the company made during the period 1968-1978, it was predicted that by 1988, the earning per share of IBM would be $18.50. The company achieved only half of that.
What went wrong? The analysts were simply projecting that IBM will continue to grow at the same rate as it had in the past, without realizing that it was simply not possible. As Smith points out: “If IBM kept growing at 16 percent annually and the overall US economy continued to grow at its long-run 3 percent, by 2003 half of US output would be IBM products and in 2008 everything would have been made by IBM.”
This example also tells us that IBM may have been a great company in 1978, but it was no longer a great stock—at least not something on which you could earn fantastic returns. Log story short—the point of time at which an investor buys a stock is extremely important.
An excellent example in the Indian case is Infosys in the late 1990s. As Parag Parikh points out in his book Stocks to Riches: “The stock price [of Infosys] shot up from around Rs 2,000 (Rs 10 paid- up) in January 1999 to around Rs 12,000 (Rs 5 paid-up) in March 2000. Nothing spectacular had happened to the company to justify such a steep increase. But by the end of September 2000, the stock was down to Rs 7,000. Nothing had gone drastically wrong with the company either since March when it was quoted around Rs 12,000.”
The analysts justified this increase by saying that Infosys was growing at the rate of 100%. What they did not tell the investors was that Infosys couldn’t keep growing at such a rapid rate. As Parekh points out : “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!” So, Infosys in 2000 was a great company. But it was clearly a bad investment.
The moral of the story at the end of the day being—don’t confuse a great company with a great stock. 

The column originally appeared on The Daily Reckoning on Mar 27, 2015  

Management lessons we can learn from Rahul Gandhi, but he won’t

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Vivek Kaul

Rahul Gandhi, the vice president of the Congress party, is on an extended vacation. This at a point of time when the first half of the budget session was under progress.
The Narendra Modi government has been trying to push a lot of new legislation through the Parliament in the recent past. And the fact that it doesn’t have enough MPs in the Rajya Sabha, it has had problems pushing through legislation. The opposition parties have ganged up together and managed to hold up the land acquisition ordinance, for one.
The point is that Rahul should have been in New Delhi during this time and been leading the opposition against the government. Instead, he is out on a holiday.
The bigger worry for Rahul should be that if he wants to keep his family owned Congress party relevant, he needs to reinvent both himself and his party. A good way to look at the Congress party is as an organization which is failing.
As Cass R. Sunstein and Reid Haste ask in Wiser—Getting Beyond Groupthink to Make Groups Smarter: “Suppose that you are a leader of an organization and that is not doing well, perhaps because it is stuck in old ways of thinking…What can you do?”
After asking this question the authors offer the example of Intel: “Intel Corporation, a large American corporation, faced exactly this problem in the 1980s. After fourteen years of profits it was losing a lot of business in the memory chip market, which it had pioneered. In a dramatic move, the company decided to abandon the entire market,” write the authors.
Why did Intel make this decision? Andrew Grove, who at that point of time was the President of Intel and would later become its CEO as well as Chairman recounts in his book Only the Paranoid Survive: “I remember a time in the middle of 1985, after this aimless wandering had been going on for almost a year. I was in my office with Intel’s chairman and CEO, Gordon Moore, and we were discussing our quandary. Our mood was downbeat. I looked out [of] the window at the Ferris wheel of the Great America amusement park revolving in the distance, then I turned to back to Gordon and I asked, “If we got kicked out and the board brought in a new CEO, what do you think he would do?” Gordon answered without hesitation, “He would get us out of memories.” I stared at him, numb, then said, “Why shouldn’t you and I walk out the door, come back and do it ourselves?””
This a very simple story which has a huge lesson. Organizations which are stuck in the old way of doing things need to get rid of their memories. “For Intel, it initiated a spectacularly successful strategy. The story suggests that when a group is aimlessly wandering or on a path that does not seem so good, it is an excellent idea to ask, “If we brought in new leadership, what would it do? Asking that simple question can break through a host of conceptual traps,” write Sunstein and Haste.
This is something that Rahul and the top leadership of the Congress party need to ask themselves. The party’s core idea of socialism and garibi hatao has been rejected by the voters, for the simple reason that it has been espousing the idea for more than four decades now. And even after four decades the ordinary Indian continues to be poor. So clearly what this tells him is that the Congress party was never serious about eradicating poverty. If it was it would have managed to eradicate poverty by now, given that the party has been in power in each of the decades since independence.
Hence, the party needs a new idea. And that will only come if one of the Gandhis comes up with something given that the party revolves around them. At this point of time this Gandhi has to be Rahul.
Nevertheless, it doesn’t seem likely that Rahul will do anything, if his lackadaisical leadership until now is anything to go by. Gurcharan Das makes a very interesting point in India Unbound about family owned businesses. As he writes: “Pulin Garg, the thoughtful professor at the Indian Institute of Management, Ahmedabad…used to say, “Haweli ki umar saath saal[The life of a family owned business is sixty years.””
The Congress party in its current form was formed when Rahul’s grandmother, Indira Gandhi, split from the original Congress party in 1969. Since then the party became a family run organization and has constantly been run by the Gandhis except for a brief interlude in the 1990s, when Rajiv Gandhi, Rahul’s father, was assassinated and his mother Sonia did not want to enter politics.
Given this, the party since 1969, or for a period of close to 46 years has been a family run organization, and its approaching the 60 year cut off for survival.
Rahul is the third generation of the Gandhi family running the party. And normally family owned businesses shut-down in the third generation. As Das writes: “Thomas Mann expressed…in Buddenbrooks, arguably the finest book ever written about family business. It describes the saga of three generations: in the first generation the scruffy and astute patriarch works hard and makes money. Born into money, the second generation does not want more money. It wants power…Born into money and power, the third generation dedicates itself to art. So the aesthetic but physically weak grandson plays music. There is no one to look after the business and it is the end of the…family.”
Let’s look at the above paragraph in the context of the Congress party. Indira Gandhi built the party in its current form. Rajiv enjoyed the power in the aftermath of her assassination. Sonia entered politics because the Gandhi family was used to power by then. And now Rahul, the weak grandson, is busy driving it into the ground.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)  

The column originally appeared on Firstpost on Mar 24, 2015

Modi’s mann ki baat on land acquisition is the first attempt to explain reform in 25 years

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In a column I wrote on February 27, 2015, I had said that prime minister Narendra Modi should talk to the people of this country directly through his mann ki baat programme on All India Radio. Modi spoke to the people of India directly yesterday on mann ki baat and addressed the contentious issue of land acquisition.
Among other things he criticized the Congress party which has been protesting against The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014.
Modi said that “those projecting themselves as sympathisers of farmers and undertaking protests,” had been using the Land Acquisition Act 1894, a 120 year-old law for 60-65 years after independence. In the process he exposed the hypocrisy of the Congress party, which has been in power in every decade after independence, and had the opportunity to set things right on the land acquisition front. But it never went around to doing this.
The Land Acquisition Act 1894, had been the law of the land until 2013. This Act gave unparalleled powers to the government to acquire land. A 1985 version of this Act stated: “Whenever it appears to the [appropriate Government] the land in any locality [is needed or] is likely to be needed for any public purpose [or for a company], a notification to that effect shall be published in the Official Gazette [and in two daily newspapers circulating in that locality of which at least one shall be in the regional language], and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality.”
This was not surprising given that the law came into being when the British ruled India. This allowed governments all over India to acquire land from the public. Many governments passed on this land to corporates, and in the process both the government and the corporates made money. The only one who did not make money was the individual whose land was being acquired. Of course, this did not go unnoticed. People saw politicians and corporates making a killing in the process. And the trust that is required for any system to work completely broke down. In 2013, the Congress led United Progressive Alliance (UPA) brought in The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013.
One of the major provisions of the Act was that private companies acquiring land would require the prior consent of at least eighty percent of the affected families. In case of public-private partnerships(PPP) the prior consent was required from at least seventy percent of the affected families.
The ordinance brought in the Modi government is essentially the same as the 2013 Act, except for a few changes. The ordinance does away with the requirement of prior consent for land being acquired for affordable housing, defence, defence production, rural infrastructure including electrification, industrial corridors etc. There is nothing wrong with this change.
Also, the 2013 Act stipulated that the land acquisition carried out under 13 Acts of Parliament which dealt with land acquired for the purpose of atomic energy, highways, national highways, mining, railways, metro etc., were exempted from the Act. The 2014 ordinance did away with this distinction, which meant that land being acquired under these Acts will also be compensated at the same rate as promised in the 2013 Act. Doing away with this distinction is a step in the right direction.
Prime minister Modi in his address pointed out that maximum land is acquired under these 13 acts. “If we hadn’t approved this amendment, then the farmer would have continued losing land to projects with low compensation,” he said. He also put a rhetorical question to the people of this country: “Tell me if what we did was wrong?…Can someone tell me if this improvement goes against farmers?”
As per the 2013 Act, for rural areas the minimum compensation promised is anywhere between two to four times the market value of land along with the value of the assets on that land. For urban areas the minimum compensation promised is two times the market value of land along with the value of the assets on that land. So, land acquired under the 13 Acts of Parliament will also be compensated at the same rate as the land acquired for other projects.
Modi in his address clarified that the “ordinance does not change the compensation legislated in the 2013 Act one bit.” He also addressed the genuine concern of people that more than the land that is required for a project is typically taken on. He assured them that in the days to come there would be a proper assessment of how much land will be required for a project and this will ensure that excess land is not acquired.
Indian corporates over the years have acquired land through the government and become lazy in the process. Also, many of them started to see themselves as landlords and wanted land just for the heck of it. This can be said from the inefficient use of industrial land in India. If Modi follows what he has said that will be another step in the right direction. It will also do a lot to rebuilt the trust required for the process of land acquisition to work efficiently.
Agriculture, forestry and fishing form around 18% of the total economic output of the country. Data from the India Brand Equity Foundation, a trust established by the ministry of commerce and industry, points out that agriculture “employs just a little less than 50 per cent of the country’s workforce”.
If nearly 50% of country’s workforce is engaged in an activity which produces only 18% of its economic output, there is something that is not quite right about the entire scenario. What this clearly tells us is that too many Indians are dependent on agriculture and this number needs to come down. The situation gets even worse once you take into account the fact that most people who work on farms don’t totally depend on income from the farm. Only 17 percent of them survive entirely on money from their farm.
Modi addressed this issue as well by saying: “In every household, the farmer wants only one son to stay in farming. But he wants other children to get out there and work because he knows that in order to run a household in this day and age different endeavours need to be made.” He then went to say that given this scenario what is wrong with the government acquiring land for building an industrial corridor and ensuring that jobs are created in the vicinity of where farmers live. This was another important issue that Modi addressed in the programme.
To conclude, economic reforms in this country have also been carried out through stealth. No government in this country has ever made an effort to explain economic reform to people. This was the first time since the process of economic reform started in 1991, when someone has made an effort to explain it in simple layman terms to the people of this country. In fact, what Modi has started needs to continue. Other leaders of the Bhartiya Janata Party now need to take this forward by talking to the people of this country directly.

The column originally appeared on www.firstpost.com on Mar 23, 2015

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

Sonia Gandhi, Congress protesting against land acquisition law is sheer hypocrisy

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Vivek Kaul

Sonia Gandhi, the soon to be replaced president of the Congress party if media reports are to be believed, is leading the charge against the land acquisition bill. And this is very ironical given that it was the Congress party which created the land acquisition mess in the first place.
Until 2013, land acquisition in India was governed by the Land Acquisition Act 1894. This Act came into being during the period of British rule in India and survived for nearly 120 years.
A 1985 version of this Act stated: “Whenever it appears to the [appropriate Government] the land in any locality [is needed or] is likely to be needed for any public purpose [or for a company], a notification to that effect shall be published in the Official Gazette [and in two daily newspapers circulating in that locality of which at least one shall be in the regional language], and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality.”
Given the fact that the Act was a remnant of the British era, it gave enormous powers to the government to seize almost any land that it wanted to. The British were the rulers of India, and not a democratically elected government. They could do what they wanted to.
The surprising bit was that the Land Acquisition Act 1894 managed to survive through 66 years of independence as well. It was abused by almost all governments over the years. The governments seized land from people and handed them over to corporates who made a killing. It would be safe to say that many politicians also benefited in the process.
The humble farmer whose land was being seized saw this happen. The land that was acquired from him at a pittance(if at all anything was paid) by the government was handed over to private parties and everyone except the farmer benefited in the process.
Hence, the trust that is required for any system to work completely broke down. And this will not be easy to repair. Unless this trust is rebuilt land acquisition for business purposes will not be easy at all. The farmer or individuals whose land is being acquired need to start to feel that they are not being taken for a ride.
Further, given that governments acquired land for them, Indian corporates have become lazy over the years. Also, many of them started to see themselves as landlords and wanted land just for the heck of it. This can be said from the inefficient use of industrial land in India.
Let me first share something from personal experience. I grew up in Ranchi, which had many public sector enterprises. The biggest of them all was the Heavy Engineering Corporation (HEC). It was built on land acquired from farmers. But only a small portion of the total amount of land that was acquired was ever put to use. Large portions of land at HEC were simply lying unused.
Professor R Krishna Kumar makes a similar point in a recent column in The Hindu Business Line in a more precise way: “Japan uses a mere 1.9 million hectares for residential and industrial use. This is only 5 per cent of their land; forest cover in Japan is a whopping 67 per cent. Compare this with the 22 million ha of Indian non-agricultural land. That is, Japan uses less than 10 per cent of the non-agricultural land available in India to produce three times more industrial output! The inefficiency of Indian industry in land-use is glaring.”
Hence, those corporates who have acquired land over the years haven’t put it to efficient use, given that they haven’t paid for it or got it an extremely concessional rate. One look at the five-star campuses of Indian IT companies should make this clear as well.
The Congress party was in power for most of these 66 years with only brief interludes where other coalitions came to power in Delhi. And it chose not to do anything about the 1894 Land Acquisition Act, for nearly six decades, even though it was in power in every decade after independence. In 2013, the party put forward The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013, which went to the other extreme and brought all land acquisition to a standstill.
Hence, the party protesting against the The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014, which is nothing but the Congress 2013 Act with a few amendments, is nothing but sheer hypocrisy. After taking the people of this country for ride on more than six decades, the party suddenly seems to have discovered its humane side.
To conclude, for the land acquisition system to start working again the trust that has been lost needs to be rebuilt. For this to happen the government needs to proceed very carefully. As Namita Wahi writes in a column in The Indian Express: “Acquisition of land by the state for private industry must only be done upon the showing of a demonstrable public purpose in each case.” And that is very important.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

The column originally appeared on Firstpost on Mar 18, 2015