Inflation over 10%: India needs a Rajiv Gandhi Inflation Control Yojana

RAJIV_158869fVivek Kaul
But Ma I want to become an economist,” said the son.
An economist?” asked the mother. “Why in the world do you want to do that? You are already a politician.”
“Aren’t they kind of cool?” asked the son.
Care to explain?”
“Look at Rajan at the Reserve Bank, the women are just swooning over him,” said the son. “Mrs De even wrote a column on how hot he is.”
“Yes. But do you remember the one before Rajan? No woman would have fallen for him, even though he did try and learn the salsa dance,” said the mother, puncturing the bubble.
Ah, trust you to spoil the fun as always,” said the son. “I was so looking forward to the women swooning over me.”
“Aren’t they already,” replied the mother, trying to do some damage control. “Look at the number of responses we have got to that advertisement we placed on Wanted a fair, convent educated, homely girl who respects her elders and can cook.”
He He.”
“But why do you suddenly want to become an economist?”
Oh, every other day the media talks about inflation, index of industrial production and what not,” said the son. “And I don’t understand any of it.”
“But you don’t have to understand all that 
beta,” said the mother. “What else do we have mauni baba for?”
“Oh yeah, 
mauni baba is an economist, I had almost forgotten, given that he rarely speaks these days.”
“Yes. Let me just call him for you.”
Five minutes later, 
mauni baba is hurried in through the door.
What happened madam?” he asked. “Hope all is well.”
“Nothing really,” she replied. “My son here just had a few small doubts. I’ll leave the two of you alone to have a man to man talk.”
Saying this, the mother left the room and the son decided to brush up on his economics.
“You know sir, the index of industrial production(IIP) number came in earlier in the day and it rose by 2%.”
“Yes, it did 
beta. What do you want to know about it?” asked mauni baba rather lovingly.
“Why is the number so low?”
“We are going through tough times. You know the IIP essentially measures the level of the industrial activity in the country.”
“But isn’t 2% very low?”
“Yes it is. In fact, if we look at just manufacturing which forms 75% of the IIP, it grew by only 0.6%.”
“Oh, so low?”
“Yes,” said 
mauni baba. “The industrial activity in the country has come to a standstill.”
“But why is that?” asked the son.
People are not buying as many cars as they were. Neither are they buying consumer durables, which fell by 10% during September 2013, in comparison to the same period last year,” said mauni baba, without answering the question.
“But what is the problem?”
“The problem is inflation. The consumer price inflation for the month of October 2013 was at 10.09%.”
“Oh, yes I saw that on television,” said the son. “They keep going on and on about onion and tomato prices going up. I am so bored of watching that.”
“Yes, you should watch Star World Premiere HD.”
“And if they can’t eat onions and tomatoes, why don’t they try pasta and pizza,” said the son. “Or even caviar.”
“Doesn’t go down well with the Indian taste, you know,” said 
mauni baba. “We need our dal, rice and rasam.”
So you were telling me something about inflation.”
“Yes. So inflation is greater than 10%. Food inflation is higher. Consumer price inflation number suggests that food inflation is at 12.56%. As per the wholesale price inflation number, the food inflation is at 18.4%.”
“And what does that mean?”
“Half of the expenditure of an average Indian household goes towards food. Given the rate at which food prices are rising, more and more money is being spent on paying for food and other essentials.”
“Hence, there is very little money left to buy non essential items like consumer durables and cars. And this leads to low industrial activity. When the demand falls, so does the supply.”
“But where does this inflation come from?” asked the son. “Why can’t we just stop it by launching a RGICLY?”
“RGICLY?” asked 
mauni baba. “What is that?”
“Rajiv Gandhi Inflation Control Yojana,” explained the son, very seriously.
“We can try, we can try,” said 
mauni baba going with the flow.
“But where does this inflation come from?”
Well, over the last few years, the government has increased its expenditure. All this money being spent lands up in the hands of people. And they go out and spend that money. When a greater amount of money chases the same amount of goods and services, prices rise. Food prices particularly work along these lines.”
“Ah. So basically we need to grow more onions and tomatoes.”
“Yes, yes,” said 
mauni baba. Its an opportune time to launch IGKTUY.”
“IGKTUY?” asked, the confused son. “What is that?”
“Indira Gandhi Kaandha Tamatar Ugaao Yojana.”
“Kaandha why not just Pyaaz or Pyaaj?” asked the son. “No one understands Kaandha in North India.”
“Oh, I just though IGK comes in a sequence and thus, sounds better,” 
mauni baba explained.
“IGK or IJK?” asked the son.
“Oh, never mind.”
“But now I get it. Basically inflation is killing growth,” said the son.
“Yes, in fact there is even a term for it.”
“And what is that?”
“Stagflation, which is a combination of stagnation and inflation.”
“Ah, stagflation,” said the son. “I quite like the term. Reminds me of all the stag parties I used to attend.”
“So can I go now?” asked 
mauni baba.
Wait, wait, wait,” said the son. “I just understood what you were really trying to say.”
“That, mother is essentially responsible for everything. She was the one who got the government to increase its expenditure and spend much more than it earned, which is what finally led to inflation.”
“But I didn’t say that,” 
mauni baba protested.
You did not. But that was what you meant,” said a confident son. “Mother won’t like listening to this.”
“Ah. You are making the same mistake as other people.”
“They don’t call me 
mauni baba just for nothing,” said mauni baba and walked out confidently from the room.
The mother soon came back into the room and the son told her everything. As he finished, the mother burst out into a hearty laugh.
You know, this is quite unbelievable,” she said. “You want me to believe that for the last half an hour mauni baba was speaking and you were listening?”
The article originally appeared on on November 13, 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.”
“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.
“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.”
“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 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) 

RBI rate hike: When Mauni baba takes onus for economic woes

India's PM Singh speaks during India Economic Summit in New DelhiVivek Kaul
It was one of those rare days when Mauni baba had decided to talk.
“What man Chidu you send these guys to the Reserve Bank and suddenly they decide to have a mind of their own,” he told Chidu, who was busy thinking about new ways to send out income tax notices to tax payers.
“Yes sir. I had great faith in the professor. But the first thing he did was raise the repo rate,” replied Chidu.
“It is the R effect,” explained Mauni baba. “First Reddy, then Rao and now Rajan. All from the South of the Vindhyas. And I thought Sikhs were a rebellious race. You know sadda haq aithe rakh and all that.”
“Yes, the three Rs were so humble and docile while they were in Delhi,” said Chidu. “Wonder what happened to them as soon as they landed in Mumbai.”
“Next time we will appoint my man Monty to the post,” said Mauni baba. “At least he will listen to me and stay silent.”
“Yes sir. That sounds like a great idea,” remarked Chidu. “Madam will also like it.”
“Also, we should move the Reserve Bank to Delhi, then it will be easier to keep the governors under control.”
“Brilliant idea sir ji,” responded Chidu. “There is too much independence in the Mumbai air. ” “But Nana ji hasn’t Rajan done the right thing by raising the repo rate,” said Mauni baba’s granddaughter, who had suddenly entered the room.
Arre beta,” said Mauni baba, looking lovingly at his granddaughter. “What do you know about all this?”
Nana ji, you know na I am studying economics at the University of Chicago.”
“Oh, yeah, your mother told me, but given that I have a country to run, I keep forgetting,” replied Mauni baba.
“Really?” said the granddaughter. “But I just heard Chidu uncle telling someone on the phone that you only do what Madam asks you to do.”
Arre beta. What are you saying? You must be mistaken. I did not say anything like that,” said Chidu, looking very embarrassed, as he got up from his chair.
“ Kya yaar Chidu. Sit down. Don’t worry. I have seen everything. I don’t get upset too easily,” said Mauni baba trying to reassure Chidu.
“So beta why do you think Rajan uncle has done the right thing?” asked Chidu, trying to divert attention from his gaffe.
“Uncle, one of my professors told us about Milton Friedman and his views on inflation. In fact, he quoted a paragraph out of Friedman’s book Money Mischief – Episodes in Monetary History.”
And do you remember that paragraph?” asked Chidu.
“Oh yes I do. Like all good Indian students, I am good at ratta maar.”
So what did Friedman write?” asked Mauni baba. “Tell us about it beta.”
““The recognition that substantial inflation is always and everywhere a monetary phenomenon is only the beginning of an understanding of the cause and cure of inflation…Inflation occurs when the quantity of money rises appreciably more rapidly than output, and the more rapid the rise in the quantity of money per unit of output, the greater the rate of inflation. There is probably no other proposition in economics that is as well established as this one,” is what he wrote,” came a long wielding response from the granddaughter.
“Wooh!” that was fantastic. What memory,” exclaimed Chidu. “Reminded me of Amitabh Bachchan.”
“Bachchan?” asked Mauni baba. “Wo kahan se aa gaya?”
“Sir. The little speech reminded me of what Bachchan once said.”
“What did he say?” asked Mauni baba.
You see the whole country of the system is juxtapositioned by the hemoglobin in the atmosphere
because you are a sophisticated rhetorician intoxicated by the exuberance of your own verbosity
“My name is Antony Gonzalves,” said Chidu, breaking into a jig.
“Shut up. The girl is trying to make a point,” said a rather irritated Mauni baba.
“Sorry sir.”
Haan beta. So what were you saying?”
Nanu, I just said that inflation is a monetary phenomenon, which means as the money going around in the financial system increases, so does inflation.”
“That’s right. And how can we control it?” asked Mauni baba, as the economist in him suddenly woke up.

We can control inflation by raising interest rates.”
“And the Reserve Bank has done the correct thing by raising the repo rate or the rate at which it lends to banks.”
“At higher interest rates people will borrow lesser given the higher EMIs they will have to pay.”
“And how will that make a difference?”
“Since people will borrow lesser, they will spend lesser as well. This will mean that a lower amount of money will chase goods and services, and that will bring inflation under control.”
“Wow!” blurted out Chidu. “Another economist in the family.”
Mauni baba was impressed. But he had to tell her the truth.
“Well beta. This needs a little more explaining,” he told her.
“Please tell me, I am all ears,” said the granddaughter.
“In 2007-08 the government spent Rs 7,12,671 crore. This year the number is expected to be Rs 16,65,297 crore or 133.7% higher. This has led to more money entering the economy and chasing the same amount of goods and services and thus driving up inflation.”
“As Friedman said?”
“Yes. Exactly like that. During the same period, the fiscal deficit of the government has risen by 327% from Rs 1,26,912 crore to Rs 5,42,499 crore. Fiscal deficit, as you would know, is the difference between what a government earns and what it spends.”
“Yes. So?” asked the granddaughter.
“The government makes up for this difference by borrowing money. With the mammoth increase in fiscal deficit, it has had to borrow more and more. This has crowded out the private borrowers.”
“I know where you are getting at,” said the granddaughter with a huge smile on her face.
“Hence, every time Chidu uncle asks banks to cut interest rates on their loans, I have a good laugh, and so should you, from now on. With the government borrowing more, there is a lower pool of money for the private borrowers like banks to borrow from. Hence, they need to offer a higher rate of interest on their deposits. And this means a higher rate of interest on loans.”
“A large part of inflation has been because of food. In fact, half of the inflation over the last five years has been because of a rise in food prices. As per the latest wholesale price inflation numbers, the price of onion has risen by 323% in the last one year. Vegetable prices during the same period went up by 89.37%. Fruits were up at 13.54%. And all in all food prices were up by 18.4% in comparison to the same period last year.”
“So the RBI cannot do anything about inflation. It does not matter if they hike repo rate or not,” explained Mauni baba. “Interest rates will not fall unless the government controls the fiscal deficit. And onion prices won’t fall unless Power Man wants them to.”
“So why don’t you just control the fiscal deficit Nanu?” asked the granddaughter.
“Well, that is for Madam to decide.”
Beta, we are running many programmes for the poor. And that is why our fiscal deficit is high,” said Chidu.
“Yes, I know all about those subsidies. You offer subsidies to those who drive diesel cars and people who use cooking gas cylinders. Since when did they become poor?” asked the granddaughter.
“Not like that beta. We offer food subsidies to the poor.”
“Oh yes, I read about that Chidu uncle. You sell food through the public distribution system where more than 40% of the food gets siphoned off.”
Beta, Madam has a vision for this country. You are too young to understand that, now you should go and let your Nanu and me discuss serious economic matters.” The granddaughter soon left the room.
“She will turn out to be an excellent economist one day,” Mauni baba said proudly with a big smile on his face.
“Well. And what was all that you were telling her?” asked Chidu, a tad irritated.
“All this bit about the government being responsible for inflation and the Reserve Bank not being able to do anything about it.”
“Yes. Isn’t that how it is?”
“Madam, won’t like this.”
“I am going to go and tell her and the shehzada everything.”
Yuvraaj bolo Chidu.
“What you are not afraid if I go and complain to Madam?” asked Chidu, not being able to figure out how Mauni baba continued to be so jovial.
“You might lose your job.”
“Chidu, I thought you were a smart man.”
“As in?”
“Well, what is my name?”
Mauni baba,” said Chidu. “But what’s that got to do with this?”
“Are you really that dumb?” asked Mauni baba. “Well who is going to believe you when you go and tell them that I spoke for as long as I did.”
“I think you have been spending too much time in Delhi. It’s time to go to Mumbai, Chidu,” said Mauni baba, having the last laugh.
The article originally appeared on on October 30, 2013 

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

What Chidambaram learnt from Crime Master Gogo and Andaz Apna Apna

crime master go goVivek Kaul 

All my dreams start with Venkatesh Prasad bowling a slow leg cutter, which lands in the middle of the cricket pitch and takes an eternity to reach the batsman.
I never see the batsman’s face.
But yesterday was different. I saw the batsman’s face and it was P Chidambaram.
Before I could see what Chidambaram was able to do with the slow leg cutter, my dream moved into a large hall (like Vigyan Bhavan) in Delhi.
Chidambaram was seated on the dais with a few mikes in front of him.
I was in the middle of the hall.
Why is there no one else here?” he asked. 
His voice reveberated into my ears.
Oh that’s because it’s my dream,” I replied, matter of factly. 
“Ah, I see. And what am I doing in your dream?”
“I wish I had an answer.” 
“So who will have an answer?”
“Venkatesh Prasad should know because he was one the one who bowled you a leg cutter,” I explained. 
“Venkatesh who?” he asked.
Never mind. But I have a question for you.” 
“Shoot. Now that I am here, let me do something useful.” 
“It’s about the fiscal deficit.” 
“Fiscal deficit?” he said. “You dream about fiscal deficits?”
“Yes, sometimes I do, when Deepika and Katrina are busy somewhere else.” 
“Ah, them. Good girls. So shoot.” 
“But I want an honest answer.”
“You will definitely get one. It’s only a dream after all.” 
“So what is your latest view on the fiscal deficit?” I asked.
Latest view?” 
“Are you worried or not worried about it?”
As I said yesterday, the government will not cross the red line set at 4.8% of the GDP(Gross Domestic Product), when it comes to the fiscal deficit.”
“Yes. And we will rein in spending and cut subsidies to meet this target. I see, food subsidies as one area where spending would need to be addressed in coming months.” 
“Interesting. Has Sonia 
ji cleared this?” 
“Of course. Of course,” replied Chidambaram, not expecting the question. 
“Why should I believe you?”
“Why would I lie to you in a dream?” replied Chidambaram, trying to convince me that Sonia Gandhi would allow the government to rein in her favourite food subsidies.
And what about the yuvraaj?”
What about him?”
“What if, he goes against his mother again?”
“Ah, wasn’t that such a cute thing to do. I loved the way he said, 
main aaj bhi feke hue paise nahi uthata, hain!
“Oh, but when did he say that? That was Amitabh Bachchan in 
Deewar, and the hain was from Agneepath.”
Arre yaar Vivek. We are in a dream. Don’t analyse too much.” 
“But there has got to be some logic even in a dream.” 
“What I meant was that I loved his classic angry young man act. And so did 
mauni baba as he told me later.” 
“Young man?”
“When Amitabh could play 
Lal Badshah at the age of 57, and bowl the maidens over, Rahul baba to is just 43!”
“Yes, still some time to go,” I conceded.
“So are we done yet?” asked Chidambaram. “There are other better dreams that I need to get into.” 
“Let’s get back to the fiscal deficit. Numbers declared by the Controller General of Accounts, which is a part of the ministry you head, show that the government has reached 74.6% of its annual fiscal deficit target of Rs 542,499 crore, or 4.8% of the GDP, in the first five months of the financial year (i.e. A
pril to August 2013).”
“These numbers were declared on September 30, 2013. You dismissed any worries about these numbers when you spoke to reporters the next day i.e. October 1, 2013. “The 74.6% number is irrelevant. We deliberately front-loaded our planned expenditure,” you said.”
“Yes, I did.” 
“So on October 1, you were not worried about the fiscal deficit, but yesterday you were so concerned about it that you even stated that the government will have to control Sonia madam’s favourite food subsidies. What changed in six days time?” I asked. 
“Oh, you can’t hold me responsible for something I said six days back, come on. You know that’s not the way it works,” Chidambaram said, trying to scuttle my question. 
“Oh, and I also checked some numbers. The total planned expenditure between April and August 2013 stood at Rs 1,83,091 crore or around 33% of the Rs 5,55,322 crore that has been budgeted to be spent during the course of the year.”
“The government has spent only 33% of the planned expenditure in the first five months, so where is the front loading you were talking about?” 
Eh. You come so well prepared even in a dream. As I said you can’t hold me responsible for something I said six days back. What is that saying you guys have in Hindi?”
“Yeah, night over, thing over.” 
raat gayee baat gayee.”
“So, it’s not my fault that reporters don’t do their home work well enough and don’t cross question me when they need to,” said Chidambaram. “I say different things in on different days.” 
“Also, on October 3, your ministry put out a press release in which it said that the government plans to infuse capital into public sector banks. In the budget an amount of Rs 14,000 crore had been provided for. But this amount will now be enhanced sufficiently, the release said.” 
“Yes, it did,” replied Chidambaram. 
“And this additional amount is being provided so as to enable banks to give two wheeler and consumer durable loans, with the hope of stimulating consumer demand.” 
“Where is this extra money going to come from?”
“I think its time for me to leave the dream and go to 
mauni baba’s dream. He doesn’t ask so many questions.”
“Isn’t this going to put pressure on the fiscal deficit?”
“Ah, looks like there is no one in Katrina’s dream today, as well. Let me go there.”
“No answer?”
“Let me try and explain this to you in a different way.” 
“Have you seen this movie called 
Andaz Apna Apna?”
“What was your learning from it?”
“I remember reading somewhere that Aamir Khan and Salman Khan did not get along while the movie was being shot.”
“So? What is the learning there?”
“Superstars, often don’t get along.”
“Yes. Isn’t that obvious? Anything else?”
“Oh, and the length of Salman Khan’s hair kept changing throughout the movie. In one scene he had long hair up to his shoulders. In the next scene he had short hair.” 
“I guess the producer would have run out of money and the Salman would have cut his hair meanwhile.”
“So? What is the learning there?”
“Producers, like governments, often run out of money.”
“Arggh..” said Chidambaram, getting slightly irritated. 
“So what do you think is the learning?”I asked.
“Do you remember this character called 
Crime Master Gogo played by Shakti Kapoor?
“Yes, I do.”
“So one of his signature lines in the movie is 
aaya hoon kuch to le kar jaoonga (now that I am here, let me take something as well ).”
“So I have made this line my guiding principle, by replacing one word.”
“One word?”
“Yes and I like to say, 
aaya hoon kuch to keh kar jaoonga (now that I am here, let me say something as well).” 
“And that’s the principle I follow when I meet the press. Everyday is a new day.”

The article originally appeared on on October 8, 2013 

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

Torture of the rupee: Between a red queen, yuvraj and white veshti

Vivek Kaul
A day after the Independence Day, the Queen’s durbar was in session.
To her left sat 
mauni baba with his head down and his eyes looking at his feet.
To her right sat the 
yuvraaj, the man who refused to grow up, fiddling with his new Apple iPhone.
Standing in front of her was the man who always wore the white 
“So why is your veshti not spotlessly white today,” asked the Queen as she started the proceedings for the day.
“Oh, yesterday the wife decided to host an Independence day lunch and asked me to get two kgs of onions,” replied the man who always wore the white 
veshti, rather matter of factly.
“So?” asked the queen.
“Well, after buying two kgs of onion, I did not have enough money left to buy a Surf Excel sachet. You know, to wash one 
veshti properly takes one sachet.”
Oh. I don’t know what this Power Man is upto. He doesn’t seem to understand that many elections have been lost on the price of onions,” lamented the queen.
“Yes madam,” replied the man who always wore the white 
veshti. “But he will win only if the onion prices keep going up.”
Anyway so tell me what are we going about the rupee?” asked the Queen. “I gather this morning it even touched 61.97 to a dollar.”
“Rupee, rupee, rupee,” the 
yuvraaj said before the man who always wore the white veshti could say anything. “Robert keeps talking about them all the time.”
“Shh! Shutup,” said the queen. “Ah. I so wish that my son had married and my daughter had not.”
“Madam we are doing a lot of things to stop the fall of the rupee.”
“Like what?”
“On Wednesday I got the Reserve Bank to put in capital controls.”
“Capital controls”
“Yeah. Like Indian citizens can no longer buy property abroad.”
“That’s good. Anyway there is so much land in the country, why do they need to buy property abroad,” replied the queen. “They can always buy land in Gurgaon.”
“Like Robert, like Robert,” the 
yuvraaj interrupted again.
The man who always wore the white 
veshti ignored the interruption and carried on with his explanations.
We also slashed the amount of money Indian citizens can remit abroad every year to $75,000, from the earlier $200,000. We have raised the import duty on gold and silver to 10%. We have also made it more difficult for Indian companies to invest abroad. All this to make sure that the demand for dollars goes down and the rupee recovers.”
But it doesn’t seem to be helping,” said the queen. “Does it?”
“You know Ma, what this reminds me of?” the 
yuvraaj got into the conversation again.
beta?” asked the Queen lovingly.
I recently read this lovely book called Through the Looking Glass, written by Lewis Carrol.”
beta. You should read more instead of fidgeting around with that phone of yours all day long.”
“And the book had a Queen.”
Really? Like me?”
“Yes, the Red Queen. And there is something that she says in the book that makes immense sense.”
“And what is that 
As the lines from the book go: “”A slow sort of country!” said the (Red) Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!“”
“Ah, smart boy. Now I really know what is happening. We are not running fast enough. Also let the records of the meeting show that I said that. It’s such a smart thing to say.”
“Yes Madam. That’s what I have been trying to tell Subbu of the Reserve Bank,” said the man who always wore the white 
veshti, trying to save himself and pass on the blame.
“Call Subbu here at once,” roared the Queen.
“Yes Madam, in fact he is waiting outside,” said the man who always wore the white 
So within five minutes Subbu was brought in. He looked very happy with not a care in the world.
“So Mr Subbu will you care to explain why are we not running fast enough when it comes to preventing the rupee fall,” asked the Queen.
“Madam, to be honest, there is nothing much we can do. The solution to the crisis is very simple. We need to cut down on our oil imports, our coal imports, our edible oil imports and our fertilizer imports. And I guess you know what will happen if we do that? At the same time we need to increase our exports manifold. And that won’t happen unless the physical infrastructure is improved. We need better ports, better roads and a better rail network. All this is not going to happen overnight, given that it has not happened in years. Also, Indian companies have borrowed too much money in dollars and all that needs to be repaid now. The NRIs are also looking to withdraw all the money they had deposited with Indian banks,” came a long answer from Subbu till he was stopped by the 
In short we are screwed,” exclaimed the yuvraaj.
So the demand for dollars will continue. The rupee will continue to be under pressure. We cannot sell dollars to control the rupee fall because we have just enough dollars to cover around six and a half months of imports. And that is a very low level. So we can only run to keep in the same place. In fact, we may not be able to do even that,” said Subbu, very matter of factly.
“Oh. But you could still do something about it?” asked the Queen.
Madam, my time is up. I am going back to Telangana. I have bought a nice house in Nizamabad. And will spend the next few years watching the mythological movies of the late NT Rama Rao garu. It’s up to the Professor now,” said Subbu as he left the room.
“And why is the stock market down by more than 500 points this morning?” asked the ‘worried’ Queen again.
“Basically the foreign investors have now started to fear that we may not allow them to take their money back.”
“Oh, but why? I know of no such plans.”
“Madam, we have reduced the amount of money that Indians could remit abroad to $75,000 from $200,000. So the belief in the market is that our next step will be not allowing foreign investors to take their money back.”
“So they are selling out of the stock market, converting their rupees into dollars and taking their money back, before we do any such thing. A similar things seems to be happening in the bond market.”
“Ah. All seems to be going wrong for me,” lamented the Queen. “I had such great plans for the 
Que Sera, Sera (Whatever Will Be, Will Be),” played on yuvraaj’s iPhone as the Queen decided to call it a day.
And finally the 
mauni baba woke up and said something.
“When we don’t know where we are going the journey is the reward.”

The article originally appeared on on August 16, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)