Americans should prefer giving out H1B visas as against Refugee visas

The question is, Is it beneficial to the economy to import people of all ages or just the most productive ones? If americans say let's give out refugee visas they risk being called lazy people letting in lazy ones so that they can easily beat them with just a little work. The problem with letting in people with H1B visas is such people are the cream of the society here in India.

They are hardworking and easily replace the average american.

Message to the future citizen of the world is: BE LAZY AND BE DOOMED.
(There is some amount of self interest in this post as I am a teacher who teaches people, some of whom land in the US for higher studies and subsequently work visa application leading to green card. So my  job security depends on USA letting in some of my students and hence this post.... Ha Ha Ha)

Is it possible to be Jobless and still lead a life in India?

The question is will an educated unemployed be able to lead a life. Several times emergency spending cannot be postponed and they come under the category of needs such as healthcare spending or hospitalization.

Rich people fear this- after taking on lots of loans and making huge commitments, A sudden loss of income.... become overnight JOBLESS- After this catastrophe-Next big "What Next"? We all witnessed heart rending scenes on the suicide of a kingfisher staffer or for that matter farmers killing themselves because they cannot lead a decent life. I feel the government should step in to guarantee life for those who lose jobs, including the rich. How?

Here's how.... 

Universal Basic income(UBI) is being thought at an income supplement of 14000/- per family per year. If multiplied over the whole population, the bill comes to around 4 lakh 20 thousand crore. This is nearly the subsidy spending that the government does every year.

If the money for this is going to come from stopping subsidies of all kinds, Would it be feasible? It looks like... Then why not go ahead? There are several problems associated with poverty eradication that come with UBI. If government withdraws from providing healthcare, education and other services such as public distribution(rations) will not profit minded entrepreneurs take advantage and drive the prices up. Geographically dispersed cities/villages it may be difficult to procure same standard services at similar prices.

Here is a Utopian Dream that I envision for the future...

Anyone(Indian) should be able to access social security(ON DEMAND).

Some of the benefits should be conditional and some unconditional. 

They(benefits) should not be dependent on where the person lives(Geography).

Also there should be portability of benefits and the benefits should travel with the person wherever he/she goes. Benefits should also be accessible from multiple service points each independently run.

This cradle to grave benefit system should take care of most of the needs of the person. If he is disabled he should either be made productive or taken care of. If he is old and has not saved enough he needs to be taken care of. If in childhood his life is harmed he should be protected.

The problem is our welfare delivery system is currently geared up to deliver benefits(subsidies) to those who are already productive or having jobs/work. It assumes that such people do not have the purchasing power to buy goods and hence strives to give such goods at lower price(reflective of pre-green revolution mentality). 

Government gives food subsidy to everyone under the poverty line irrespective of whether he is poor due to disability or due to ill-health or wantonly. It would be better to make such poor able to come out of poverty than to keep giving them low cost food and fuel.

What should we do under such circumstances when the service delivery system is geared up in a haphazard way.

Answer is to re-engineer it.

USA mandates that every person working in the country saves some percentage of his income towards social security and reaps benefits after retirement in old age. Is it possible for the system in India to re-engineer to such a possibility. What every political party in power does when it comes to power is announce a slew of schemes at saving now and using proceeds in looking after people in old age. When a different party comes to power it announces newer schemes with the same goals as those existing ones.
Present(existing) system:
People are saving money into EPF and organizations have upper hand in this scheme of things. NPS and PPF are other savings avenues. There is no holistic approach. Savings are done in fits and starts. People with sudden loss of income stare at starvation. It also does not in any way measure how much each person gets as benefits.
Proposed Migration:
With aadhaar linked benefit transfer measurement, we could map how much of benefits each family and each person, in every family, gets as income support. It would be possible to distill out list of those who do not get any benefits. If such people come forward in claiming unemployment doles they should be provided for. Several companies are now working for enabling cashless transactions in healthcare industry. Government is trying to provide for healthcare rendered in private sector. The catch is all employers should compulsorily register and mention their salary expenses for each employee. It might be challenging to provide security in a country with very few organizations and where majority of people are self-employed.

Questioning the “Phenomenal Success” of Aadhaar-linked Direct Benefit Transfers for LPG

(This article in EPW is reproduced as it is. Not just does this article provide a beautiful analysis of the aadhaar project, it puts all the disadvantages of it in perspective and provides suggestions for improvement)
The Aadhaar-linked Direct Benefit Transfer scheme for reducing leakages in Liquefied Petroleum Gas (LPG) subsidies has been widely advertised as a phenomenal success and has been used to promote Aadhaar and DBT in other spheres by prominent government officials. However, an analyses of various studies and data shows that the government’s tall claims of savings cannot be confirmed and leaves much to be questioned.

Since the 1991 reforms, one of the major objectives of the government’s economic policy has been to rationalize and reduce the expenditure on subsidies. According to the Economic Survey 2015–16, the Indian government spent 4.2% of its gross domestic product (GDP) on subsidies, which it intends to reduce to 1%. This is being done by eliminating certain subsidies, reducing the scope and extent of some, targeting to a narrower population and reducing leakages through better administration.

Direct Benefit Transfer (DBT), or the transfer of subsidies directly to the beneficiary bank accounts, along with using Aadhaar/Unique ID as the identification proof, has been promoted as the silver bullet to reduce leakages in subsidy administration.

The Aadhaar-linked DBT scheme for reducing leakages in liquefied petroleum gas (LPG) subsidies is the first full-scale cash transfer programme via DBT. The flagship program has been widely advertised as a phenomenal success and has been used to promote Aadhaar and DBT in other spheres by various prominent members of the government (Panagariya 2016).

However, the limited evidence of potential savings in LPG does not match these tall claims and leaves several questions unanswered about the extent and mechanism of savings through DBT. Even

if reduction in leakages in LPG subsidies turns out to be substantial, the government should be especially careful about extrapolating this impact to other subsidy programmes like the Public Distribution System (PDS) and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The context and use of DBT differ significantly across different programs for the “success” to carry over.

LPG usage is mostly urban, is centrally administered by a few companies through  a fully computerized list of beneficiaries and does not need bio-metric verification; which makes it more conducive for DBT. On the other hand, PDS and MGNREGA are more rural-based, managed through multiple agencies with only partial computerization of user lists and need repeated bio-metric verification, making the use of DBT far more challenging. The Economic Survey 2015-16 acknowledges some of these issues, but the government has begun the process of extending DBT to kerosene subsidy and PDS without due diligence.

In recent months there has been a vigorous debate on the impact of DBT for LPG (George and Subramanian 2016). The debate is a welcome step, but most analyses have left critical questions unanswered, and the widely quoted estimates of savings do not stand to scrutiny. The estimates of the potential impact vary: from an estimated 24% reduction in subsidies by the Economic Survey to that of less than 3% according to the International Institute for Sustainable Development (IISD).

A recent audit by the Comptroller and Auditor General of India (CAG) of the PAHAL–Direct Benefits Transfer for LPG (DBTL) scheme concludes that more than 90% of decline in subsidies can be accounted for by the fall of crude prices and only ₹1,763 crore out of the total reduction of ₹23,316 crore was due to reduced offtake of cylinders by consumers. To be certain about the level of impact and “phenomenal success” of DBTL and to extend it to other spheres, more research and analysis is needed, along with a transparency in data and methods used.

Evaluating Aadhaar-linked LPG

Over the last few years, subsidies on diesel and petrol have been gradually eliminated, but LPG still remains heavily subsidized. The Economic Survey estimates that the effective subsidy rate on LPG is 86% . According to the Ministry of Petroleum and Natural Gas (MoPNG), the government provided an average subsidy of ₹173 per cylinder in the first six months of 2015–16 (April–September 2015) totaling approximately $1.4 billion.

Differential pricing across sectors leads to leakages as well. In India, public sector oil marketing companies sell LPG to households and to the commercial sector through a distributor network.

Commercial establishments and households consuming more than 12 cylinders in a year have to buy LPG at unsubsidised prices. Commercial establishments have to additionally pay central and state taxes of about 25%–30% on an average. Because different prices exist for the same product, dealers create ghost LPG accounts and divert subsidised LPG cylinders into the black market which are then sold to commercial establishments.

The belief behind Aadhaar-linked DBT is that technology can help states with low administrative capacity to efficiently curb diversion of subsidy. In the DBT scheme, consumers have to register their Aadhaar-linked bank accounts with their LPG distributor. Consumers pay the full cost of LPG to the distributor and the subsidy is transferred directly to their bank accounts (supposedly, before the next refill). This does not restrict or target the subsidy, but only changes the mechanism through which subsidy is delivered to the end user.

Having an Aadhaar-linked bank account is mandatory to access this subsidy. The idea is that this change increases the chances of identifying and eliminating ghost or duplicate LPG accounts. The few studies investigating the effectiveness of DBT for LPG have reached contradictory conclusions and do not clarify important issues. The Economic Survey 2015-16 claims that DBT was responsible for reducing LPG subsidy by 24%, while a study by Prabhat Barnwal (2015) found a more modest impact of 11%–14%. Both these studies evaluate the DBT scheme introduced (and abruptly terminated) by the United Progressive Alliance government from September 2013 to February 2014 by comparing the change in usage of LPG in DBT districts with the change in usage in non-DBT districts.

Based on publically available data, the IISD’s policy briefs claims that the savings for 2015-16 would be ₹120 crore against the ₹14,672 crore estimate mentioned by the finance minister in Parliament (Clarke 2016). These claims have been reported extensively in both national and international media and used as a justification to extend Aadhaar and DBT to other spheres. However, none of these studies help in bringing clarity to the extent and mechanism of savings, leading to unreasonable extrapolation in the political narrative and in the media.

This article aims to bring clarity to the debate by raising questions that are critical to understanding the true impact of DBT on subsidy reduction but which have been insufficiently addressed. After having reviewed all publicly available research and data about the Aadhaar-based DBT scheme, and having communicated with several researchers with different viewpoints on the debate, four major questions surface:

1. Is the recorded impact of Aadhaar-linked DBT due to elimination of ghost accounts or is it because of exclusion of genuine beneficiaries?

Exclusion errors could be an important driver of reduction in subsidised LPG usage. For a household to benefit from LPG subsidy under the DBT scheme, they have to open a bank account, link it with their Aadhaar number and register the same with the LPG distributor. In the initial few months after DBT was made mandatory, some genuine households might have not been able to complete the requirements and thus would have been excluded from receiving LPG subsidy. Both Barnwal (2015) and the Economic Survey find a sharp drop in subsidised LPG sales in the first month after the enforcement of DBT. This fall recovered substantially over the next few months, possibly as exclusion errors declined over time. Barnwal finds that even after DBT was made compulsory, not all genuine households were initially enrolled in the programme. For six months after the start of the programme, about 20% of households complied with DBT requirements.

However, none of these studies quantify the extent of exclusion errors or account for them, without which the true impact of DBT is uncertain. Both Barnwal (2015) and the Economic Survey argue that exclusion errors do not play a big role in the estimates. They argue that households which do not comply with LPG requirements are likely to be rich households or ghost accounts. But this does not quantify the extent of exclusion errors which are bound to exist in a new scheme, especially in the first few months (George and Subramanian 2016).

The claims of no significant exclusion would have been more convincing if the studies provided results which excluded the first few months of data from the analysis—assuming that exclusion is resolved after few months in most cases. Exclusion errors will invariably lead to overestimation of the impact of DBT, and like in other impact evaluation studies, additional parallel household surveys would have helped ascertain the extent of these errors. Without getting a handle on the exclusion errors, it remains unclear whether the reduction in subsidised LPG consumption is due to genuine households being left out or because of elimination of ghost accounts.

2. How much does Aadhaar contribute in reducing subsidy in the DBT programme?

Present analyses of the impact of DBT do not examine the individual effect of each of its mandatory components—the bank account and the Aadhaar requirement—which would help in identifying the mechanisms of impact. Most of the impact could have potentially come only by transferring the subsidy to a non-Aadhaar linked bank account, as it would help in identifying ghost accounts.

Dealers can create ghost accounts and divert LPG cylinders to the black market relatively easily when LPG is provided to households directly at a subsidised price. Introducing the requirement of bank accounts separates the subsidy transfer task from the dealer and hence they cannot directly create ghost accounts. The process of creating ghost accounts now involves a separate set of actors.

LPG dealers can still collude with bank employees on the matter of verifying identity, create ghost bank accounts, and then pocket the subsidy. Aadhaar might be useful in preventing the latter, but Aadhaar itself is not ghost proof. Two individuals living at the same household address with different Aadhaar numbers can collude with the dealer or the delivery person to create one genuine and one ghost LPG account. Aadhaar is not helpful in identifying this type of a fraud. None of the studies mentioned above attempt to decipher the separate impact of bank accounts and Aadhaar.

Identifying the separate impact of bank accounts and Aadhaar is important because the usage of Aadhaar raises other concerns that should be evaluated against its benefits before beginning its widespread usage. These include loss of privacy, increased risk of government surveillance and security risks. While aspects of privacy and surveillance regarding Aadhaar have been discussed in depth (Ramkumar 2010; Drèze 2016), the security risks have received lesser attention. Storing and providing biometric authentication services for over a billion people through a centralised agency increases the risks of malicious hacker attacks. A single successful hack might lead to the theft of the identity information, as shown by several recent international attacks (Khandelwal 2015).

The recent version of DBT introduced by the National Democratic Alliance (NDA) government, called PAHAL, does not make Aadhaar mandatory for subsidy transfer to bank accounts. Studies could include an analysis of the impact of DBT in districts with varying levels of penetration of Aadhaar to help ascertain the marginal effectiveness of using Aadhaar in the DBT scheme.

3. Why do the estimates for savings differ vastly across studies?

The estimates of savings vary substantially across studies and the methodology is not always transparent. Barnwal (2015) and the Economic Survey use similar methodology and data to estimate the impact of Aadhaarlinked DBT on subsidy reduction, but report different levels of savings. Barnwal (2015) estimates a reduction of 11%–14% in domestic subsidised cylinder usage using individual transaction-level data and about 13%–17% using aggregated distributor-level data. The Economic Survey reports a reduction of 24%.

These are substantial differences as it would translate into potential savings between ₹5,820 and ₹9,000 crore using Barnwal’s estimates as opposed to ₹12,700 crore as reported in the Economic Survey. It is difficult to ascertain the exact reason for the differences as the data, method and regression used for the Economic Survey estimates are not reported. One of the potential reasons for the discrepancy might be different sources of data , but the discrepancy is too large to be completely accounted for by this alone. The picture would have been clearer if the authors of the Economic Survey had released a working paper detailing the exact data, method and regressions used in the analysis.

In contrast to other studies, the IISD estimates almost no savings from Aadhaar and raises several pertinent issues, but their analysis is not directly comparable with the other studies. IISD claims that

in the fiscal year of 2015-16, the maximum savings possible due to Aadhaar would only be ₹121 crore while duplicate accounts found due to Aadhaar will be 1%. This is based on data on the number of ghost accounts identified and quarterly LPG subsidy data released by the MoPNG. They attribute a substantial reduction in the number of ghost LPG connections to a simple list-based de-duplication exercise carried out by the public sector oil companies. Based on government-submitted affidavits to the Supreme Court, IISD notes that the number of ghost LPG accounts is less than 2%. But IISD’s analysis cannot be compared with other analyses, since they only use aggregate data and do not use beneficiary- or distributor-level data. Aggregate data might be impacted due to various trends that are difficult to separate. Nonetheless, IISD’s analysis does raise key issues that have not been addressed fully.

4. If diversion is reduced, why have sales to the commercial sector not increased?

Change in subsidised LPG usage in the domestic sector because of reduced leakages should be matched, at least partially, by an increase in commercial sales. This is not observed, raising further questions about the impact of DBT. The Aadhaar-linked DBT programme claims to reduce leakages in subsidised LPG cylinders, which were earlier diverted to the black market and sold to commercial establishments. The reduction in supply of diverted LPG would lead to increase in prices in the black market and some decrease in demand in the commercial sector. But at least part of the decline in leaked cylinders has to be compensated by an increase in commercial sales by the distributors. But over the period of the programme, Barnwal (2015) finds no substantial change in commercial sales, and the Economic Survey finds an increase of only 6% of commercial sales, as opposed to a decrease of 24% in domestic sales.

This discrepancy has been explained by suggesting that stockpiling might have taken place before the start of the DBT scheme. However, the months preceding the policy do not show any evidence of

increase in sales of subsidised cylinders. Another possibility suggested by the Economic Survey is that sales of non-subsidised cylinders to the domestic sector have increased. But this claim would have been more convincing if the Economic Survey had provided evidence to support it. In addition, on abrupt termination of the policy, Barnwal (2014) finds an increase of domestic sales by 6%–7.5% and decline in commercial sales of 6%–9%. These numbers suggest that rather than the 24% subsidy reduction put forth by the Economic Survey, the actual impact might be closer to one-fourth of that (6% or so).

Aggregate data from the MoPNG also raises questions on the extent of impact of DBT. The share of domestic consumption in total LPG consumption in the first six months of 2014–15 and 2015–16 (before and after DBT–PAHAL) remains relatively stable, having changed from 89% to 88%. If DBT was successful in reducing ghost accounts by a quarter, the share of domestic consumption should go down substantially and share of commercial consumption should have increased. It is only if the domestic sector grew at a far higher rate than the commercial sector would it be possible to negate all the decrease in consumption, which might happen partially but not completely. Other Mechanisms to Reduce LPG Subsidy There are several other ways of targeting and reducing the regressive LPG subsidy , which might be administratively easier and less controversial. A proposal which was partly implemented and then withdrawn by the previous government of capping the number of subsidised cylinders is one option. Fifty percent of households use only seven or fewer subsidised cylinders every year (Lahoti, Suchitra and Goutam 2012). Currently, households can receive subsidy on up to 12 cylinders per year. This cap on the number of cylinders could be gradually reduced to 6–7 cylinders, which will go a long way in reducing the subsidy and its regressive nature (similar to the phased elimination of the diesel subsidy).

In addition to reducing leakages because of the reduction of the number of cylinders which can be diverted after genuine usage, this option would lead to efficiency, as overall usage would reduce when consumers have to pay the full price after the lowered cap is breached. Unfortunately, even though this option is the easiest to administratively implement, it has not got much political traction.

Another way to reduce the cost of LPG subsidy is to exclude high-income earners from the LPG subsidy scheme. The government has introduced the “give-it-up” campaign, where people voluntarily decide to give up LPG subsidy. Only 7% (1 crore households among 15.34 crore LPG connections) have voluntarily given up the subsidy, even though most LPG subsidy beneficaries belong to the top 20% of society. Instead of keeping it voluntary, the government should make it compulsory for people above a certain income threshold. A recent step in this direction is the initiative to identify households with income greater than ₹10 lakh and exclude them from the LPG subsidy. This limit could be lowered over time.

One additional step is to reduce or eliminate the tax differential between commercial LPG and nonsubsidised domestic cylinders, which currently averages 25%–30% . This will reduce any diversion of non-subsidised domestic cylinders to the commercial sector.

Conclusion

Studies evaluating the DBT scheme are useful and important. Given the limitations of data and methods, these few studies cannot conclusively provide answers to all relevant questions. Nonetheless, the current sets of estimates are shaky and leave several questions unanswered, preventing any certainty about the extent and mechanism of the impact of the DBT programme. The

level of exclusion errors, marginal impact of Aadhaar in DBT, and various inconsistencies in the results need to be addressed before celebrating the “success” of DBT for LPG. The government should be cautious while extrapolating the uncertain results of DBT in LPG and introducing Aadhaar equirement or even DBT to other schemes.

How to survive when the government KILLS CASH !!!!!

This is such big news that it will go in the annals of Indian Economic history as a turning point. PM has dropped a bomb with a loud dhamaka. Blogosphere has enlivened with the news that 500 and 1000 rupee notes is no longer legal tender. With Pakistan Printing huge amounts of Indian currency the government seems to have woken up.

How do you survive without 500 and 1000 rupee notes? Here are a scenarios that may happen:

Mayhem at the banks..... India is such a huge economy that banks would be in no position to cater to the high demand for 100 rupee notes for a few days.

Later when new currency comes through it may face huge demand. ATM machines may go dysfunctional for a few days.

How to survive the cash thin era?
1) Carry all kinds of cards... You never know when you will need them.
2) Recharge your wallets to the hilt. May be wallets will do brisk business(its good news for them).
3) Pay your servants by NEFT/IMPS/UPI.
4) Don't shop at places where cards are not accepted.
5) Pay by card even at the petrol bunk.
6) Conserve 100 rupee notes.
7) For a few days be extra careful of your expenses.

Update: It is now all Ok after 17 days. Still some areas of the country are facing cash shortage. The coming November salary day may see another crisis. Fingers crossed.

Aadhaar juggernaut rolls on well

Last few months have seen frenetic action on the aadhaar front. UPI commercial launch was followed by the actual end user launch on 25th August. After UPI went live there were several news reports that proclaimed that it is going to be a revolution in cashless transactions. A couple of months later now it has become clear that reaching 15 million users and 1 million daily transactions will take at least six to seven more months.
Somethings that hold significance have occurred in recent past. Aadhaar bill that was voted in parliament has come into force. Even the GST bill is passed by both houses of parliament.

One more important event that indicates the things to come in future was the meeting on 27th july,2016 of tech giants(google,microsoft) with the CEO of UIDAI. In the meeting details of which were all across the papers were that UIDAI is demanding chip level security guarantees of privacy for authentication on their devices. Microsoft has partnered with the government on aadhaar and has announced skype integration with aadhaar auth. Microsoft has got its data centers in India accredited by the government. It has also partnered with the government on skills training.

Google on its part has kept its plans under cover though it has partnered the government and sponsored wifi at a few railway stations. It has tried enhancing access to the internet for the common man. This is something even facebook is doing. One suggestion the government has steadfastly rejected is involvement of telecom companies and and multinational corporations in the NOFN project. I think this is very important as far as increasing access to information is concerned and eventually the success of the Digital India mission.

As far as DBT is concerned FY 2015-2016 saw transfers of 61,000 crore to accounts of nearly 30 crore people. This includes over ₹25,000 crore in MGNREGS and over ₹21,000 crore in PAHAL (for cooking gas). If you calculate, on an average 2k has gone to one aadhaar number or person. It is the goal of the government that benefits of social programs have to reach those in need. Another stated goal is to achieve social security for all. Under fiscal constraints it would be a challenge to strike a balance between social security for all and channeling benefits only to the needy. The government is readying a plan to provide security for the unorganized sector(majorly self employed) which employs more than 80% of those employed in the industry.

Mudra loans meant to be given to the micro units has seen decent success. Mudra loans amounting to 1 lakh 32 thousand crore were disbursed by banks and finance institutions. They come in three varieties, shishu(50k), kishore(5 lakh) and tarun(10 lakh). Mundra agency has made a profit of 66 crore in the first year of operation.

News reports coming in show that government has saved 27k crore or about 4 billion dollars in the last two financial years. Over 1.6 crore bogus ration cards have been deleted, resulting in savings of about ₹10,000 crore. Similarly, 3.5 crore duplicate beneficiaries were weeded out in the PAHAL scheme, resulting in savings of over ₹14,000 crore in 2014-15 alone. In Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) too, a saving of ₹3,000 crore (roughly 10 per cent) has been estimated in 2015-16.

Food, fertilizer and kerosene which form more than 80% of the 3 lakh crore subsidy budget once brought under the DBT fold would lead to savings of more than 40,000 crore a year.

A cautionary note is appropriate here. The recent CAG audit of saving estimate has punctured the government estimate of 14k crore savings in PAHAL and has suggested 2k crore as a plausible number. Even then the convenience with which people have been able to use aadhaar to authenticate say for example to get themselves a Jio connection does indicate its usefulness.

Achievements of the narendra modi government so far(Latest)

This was the situation from which we have started to emerge: We have definitely started to emerge from this pathetic position....

• Chronic electricity short supply and high T&D losses
• Low rural telecom coverage and number of broadband users
• Mal-nourishment and Lack of proper healthcare
• Education sector neglected
• Dirty accident prone trains and running on diesel
• Rickety rail and road bridges prone to collapse
• Open defecation and no toilets in govt schools
• Garbage problems and inadequate sewage treatment
• Aviation sector always in doldrums
• PDS system leakages too high and getting rations tough
• Road network not up-to the mark
• FDI into the country stagnant
• Export growth always lower than imports and BOP crisis
• Electronic goods imports too high-local manufacturing low
• Manufacturing and SSI sector not doing well
• Getting gas connections difficult
• Fertilizer production insufficient
• No proper crop insurance schemes
• Corruption in high places
• Tax processing, passport issuance slow
• Missing children untraceable
• Disabled unfriendly country
• Online train ticket booking difficult
• Real estate companies fleecing customers
• Very high gold and cigarette/alcohol consumption
• Very low general/health insurance penetration
• Indians abroad left to fend for themselves
• Defense procurement corruption prone and not transparent
• Defense manufacturing by private sector not allowed
• No uniform identity document or verification method and difficult KYC formalities
• Cash heavy economy
• Black money problem
• Police stations ill-equipped and not networked- shortage of personnel
• Post offices not networked and inefficient
• Farmers have limited avenues of selling their produce
•  

If in case you want to look at the misses or failures of the current government you can read this.

Aadhaar like biometric system could transform african countries

Governments in African Countries are counting on a technology employed in India in the Aadhaar project to help them climb out of poverty. Aadhaar as everyone knows is the world's largest bio-metric enrollment and authentication system.

The key problem with all pervading illiteracy and corruption is that citizen registration systems fail. This causes undocumented people who do not have any way of proving who they are. Scantily educated people in poverty ridden countries cannot appreciate the importance of having bank accounts as a means of financial security. Finally whenever the governments try to provide relief to them either in terms of monetary benefits or in kind, they are cheated, due to lack of a verifiable identity.

Failures of the Narendra Modi government so far

It is my opinion that even if you like a government, it does not hurt anyone by constructive criticism. I have collated some news posts, esp that from congress spokespersons from various news sites. If these make sense and seem to have a ring of truth then the government does need to act fast.

Jobless growth

It’s causing a lot of consternation in the people but nobody is vociferous about it. Export industries have reduced workforce. Public sector, by far the largest employer, employs only 18 million as compared to 19.5 million two decades back. Software automation has reduced labour requirements of ITES. Slow growth in agriculture has reduced the sheen in farming as a source of livelihood.

Below normal monsoons

Two years of below normal monsoons have caused all reservoirs to go dry. In searing heat people are eagerly awaiting monsoons and if it is not evenly distributed may cause mass migrations within the country.

No GST due to non co-operation with opposition

The center being adamant and not yielding to the demands of the opposition neither trying to reach middle ground in matters of national importance is quite uncharacteristic of a responsible govt.

Fudging of GDP data

It needs no mention that reliability of GDP data is questioned by almost everyone. Discrepancies have reached a level higher than earlier years.

Frequent foreign trips

Pray to god that this year monsoons will be normal or else the traveling PM would need to come back cutting short his multi country trips.

Chest thumping and trumpeting small steps (rai ka pahad)

Jan Dhan Yojana and a slew of other steps were in fact old wine in new bottle.

Lawlessness over beef eating, intolerance, award wapsi

Controversies.. Controversies… controversies…(entirely avoidable)

Abetment of small scale riots

We cannot lay all blame on central government but those states which are facing elections riots seem to be traced to some or the other BJP party functionary

Slowing exports

Centre cannot be blamed for global slowdown and since electricity problems are being addressed we will possibly see a pickup

Increasing taxation of petroleum products/services and milking of telecom firms

A whatsapp joke doing the rounds is “I Ordered service tax….(after some blank pages) Got a pizza free”. This sums up the thoughts of the people. We are overtaxed. Another FB post says “take all my salary give back all taxes I pay”. If all this should not cause electoral losses, something should be done immediately.

Instability in the neighbor countries

Instigating instability in the neighborhood is something not in our foreign policy and this does seem like an accusation without substance. Nepal, Srilanka, Maldives, Bangladesh to name a few seem to have a grouse.

Discontinuation of India’s traditional non-alignment doctrine

It suited the world powers well because they always had someone not in any of the gangs.

Non-starters as slogans such as digital-India, swacch Bharat, clean ganga, smart cities etc

The less said on these things the better… mere slogans they seem.

Increasing farmer distress and suicides

This summer has been the hottest and farmer suicides have hit a high, news of child marriages, village women turning to prostitution to support themselves and other horrendous incidents or stories.

Increasing prices of protein rich foods and grains

Some food items esp dal have reached sky high prices… even sugar seems to have become out of reach of the poor.

Increasing undernourishment of the people esp children

Mal-nourishment increased by 2% in the past five years and calorie intake by people has seen secular slide since three decades.

Unhealthy lifestyle of people, stressed work places, life style diseases

People eating more unhealthy foods, stress in office and chronic diseases are gnawing at peoples happiness.

Pollution, garbage crisis, reducing water table, unclean water

Heritage of the past governments apathy but long term solutions need to be found.

On DBT-F Rollout

I was reading the book "Rebooting India" by Nandan Nilekani and Viral Shah for the past several days. It contains a treasure trove of information on the Aadhaar project as it comes from two of the top people at UIDAI with anecdotes by several others. I would definitely post some excerpts from the book and highlight a few points of importance in my future posts.

For now, I am writing about an idea I have been toying with since a few months which I have expressed in several online forums.

I humbly wish to state that the DBT rollout for fertilizers is not going to work as smoothly as expected. Ground work in terms of steps need to be taken to launch DBT-F, if I may coin the acronym needs to be in place.

Firstly, those fertilizer factories that have been closed down due to losses need to be revived. Secondly, fertilizer production needs to be boosted in order to reassure farmers that adequate quantities of them will be available and that there is no need to hoard them.

Factories producing fertilizers are to be reassured that all due payments would be cleared. In fact these factories have been demanding DBT-F rollout, which would at least make subsidy payments timely for them.

For DBT-F to work farmers need to be on-boarded into the system. It is very obvious that their aadhaar number would need to be made mandatory which could pose problems. An alternative in the form of Voter-ID or PAN card should be thought of. The tracking of fertilizer sales till the retail level would be difficult. May be the factories producing fertilizers should themselves market their produce as fertilizer distribution companies. How to ensure that there is buy-in of the new system and least amount of protest or resistance?

Solution:

Only phosphorous and potassium based fertilizers should be brought under subsidy regime initially. Since these two are deregulated and sold at market rates a one-time KYC documentation/web site based registration to on-board these farmers could be done. Once DBT-F is implemented in deregulated fertilizers farmers will flock to register themselves (they are getting new benefit of reduced prices). Later, the same farmers would definitely buy urea which could be brought under DBT. This rollout of DBT where PK fertilizers are brought under DBT first can progress faster and, well before 2018 end, nationwide rollout can be achieved.
If would be difficult to accurately identify farmers and anyone purchasing fertilizer should be thought of as a farmer. If there are shortages of fertilizers then definitely there will be hoarding. That is why adequate quantities of fertilizers need to be produced and sold. So after a few cropping seasons KYC of these purchasers should be strengthened by linking with land records.

Why Nerpap stopped? Should it restart?

National Electoral Roll Purification and Authentication Programme (NERPAP) was one of the rarest program running successfully till the supreme court pulled the plug on it in Aug,11 2015 when it warned the central government against making aadhaar mandatory for social benefits.

In the drive launched sometime in march,2015 all Voter-IDs were to be linked with aadhaars by Aug,15. But due to the supreme court ruling over 34 Crore VoterID-Aadhaar links will have to be removed....(Read Here)

It is indeed a travesty of justice that getting to vote is considered a lucky event. Migrants and people on the move easily get excluded from voting. What is the solution for all of this?

????

An Ex- Chief Election Commissioner N. Goplaswamy has succintly put forth several ideas which if implemented will lead to higher voting turnouts and a greater say for the non-local population across the country (Read Here)

It has become ample clear that aadhaar solves many problems associated to not able to vote and also duplicate voting.

So the question really is this

SHOULD INDIAN PARLIAMENT AMEND THE CONSTITUTION TO MAKE IT MANDATORY FOR VOTERS TO POSSES AADHAAR CARD?

It is very clear that only Indian citizens should have the right to vote. For ensuring that let us take the first step of ensuring that only Indian Residents get to vote. The next would be to identify citizens among the population and weed out foreign origin people.

It is not easy to amend the constitution as it requires bipartisan support. Also people may raise the bogey of privacy to scuttle any plans of making aadhaar mandatory. What is the alternative before us under such circumstances?

Next question that comes then is

SHOULD INDIAN PARLIAMENT PASS A LAW TO GIVE STATUTORY PROTECTION TO NERPAP?

This is a more viable proposal under the given circumstances. Now that 1 billion people have aadhaar and it is anyhow one of the documents that can be used to vote why not link aadhaar with Voter-ID under a law passed by the parliament. The way in which NERPAP was stopped looked as though Election Commission was scared of the SC.

Let us make 2019 general elections the cleanest and most voted one.

The Stupendous Success of PAHAL(DBTL) and #Giveitup

(All figures are guesstimates)

Estimating the savings due to Pahal or DBTL launched by the Government in India has been a very controversial affair. Some studies have pointed to a figure of just 143 crore in FY 2014-15 while keeping mouth shut for FY 2015-16 causing us to suspect the intentions even though an entirely new financial year has passed by. The estimates by the Government itself(particularly its CEA) of around 12.5k crore are not of any particular year but just an extrapolation of the estimated savings due to cancellation of gas connections.

That brings us to a question of were the savings just notional or in reality tangible. A recent article by teleanalysis.com Here  Mentions a figure of 17360 crore savings in the last 51/2 years in all government schemes put together. Various other estimates are being made and one thing that every one agrees is that LPG consumption by commercial users have increased and that by domestic users has reduced even before DBTL was launched.

Consider a hypothetical situation of news of a nuclear bomb being dropped in a large city with 5 million population. The enemy nation does a silly mistake of announcing the drop of the bomb one month in advance. Every single soul in the city has moved out and when the enemy country does indeed drop the bomb it was found that not a single soul has been killed. 

Conclusion: Nuclear bombs are incapable of killing humans.

Some similar logic is being used here where estimates of savings are tweaked to cast aspersions on the convenience and reform that has happened. That commercial cylinder sales boomed before DBTL was to be launched signified that the city was being evacuated. When indeed the DBTL was launched there was nothing much to show in terms of diversion being reduced.

Adding salt to the injury of the critics, the government launched the #Giveitup campaign. In the initial few days of the launch very few people responded. So about 5 lakh people had given up the subsidy and critics leaped in joy and pointed to the paltry 0.05/16 crore=0.3125% people giving it up.

Since a year later 1.13 crore people have given it up and critics are now a little less vocal.

There is news of nearly 2k new agencies to be established in karnataka alone. Liquified Petroleum Gas(LPG) is a primary heating fuel used in India for cooking purposes. Out of the 270 million households 160 million use LPG. With significant savings in subsidy outgo the government has rightly decided to give free LPG connections to poor people in rural places. Target is 50 million new connections.

While explosions due to gas leakage and consequent loss of lives and property are routine, we should try and make gas cylinders more safer by investing in safety devices. Safety should be the nest goal. Long term goal should be to have piped gas in every household.

India ahead of the curve in digital payments

Reserve Bank of India governor Raghuram Rajan today launched the Unified payment Interface at a function in Mumbai. UPI its acronym, is billed as a giant wave in digital payments and a platform that can potentially take the wind out of cash usage habits of Indians.

The frugal technology around which it is built consists of Bank accounts, Aadhaar and Mobile. While the penetration of these in the population is around 56%, 93% and around 15%(smart phones), Theoretically, Nothing stops these numbers from reaching 100% saturation. That is why Mr. Rajan in his keynote speech emphasized the banks thinking on re-launching this service even on feature phones/basic handsets.

The technology behind this was developed indigenously by Kolkata based R.S Software which was selected by NPCI after technical evaluation.

Mr. Rajan warned that the UPI will need to deal with issues involving customer grievances, security breaches and fraudulent transactions. It would be easier for fraudsters to scam the system and steal money. UIDAI today came out with instructions to people not to share copies of their aadhaar cards with unauthorized people. The UPI is launched today in Phase-I where the users will be a closed group of around 30 banks.

It is expected to be thrown open to the public, in another two months when more banks might offer the service. It was reported that wallets too want to be part of the bandwagon and, as the RBI governor mentioned, it was open to all possibilities. It has become more than clear that if the platform gains wide acceptance, it would be very difficult for any payment platform such as apple pay, samsung pay or android pay, to gain foothold in the Indian market.
Public sector banks considered more traditional and slow adopters of technology have demonstrated that innovation can happen in government sector too. It is hoped that wallets which were presently left out of the UPI would be included pretty soon. Banks may be hesitant to allow other bank apps to link with their bank customers and this feature too might be resisted.

There are reports from other countries too about such services being either launched or developed. In 2015 in US, clearXchange announced the availability of a real-time payments solution. It was reported recently that banks have a short window of about six months to capture the P2P money transfer market before the likes of apple pay take over.

Read more: http://forbesindia.com/article/special/unified-payments-interface-to-revolutionise-mobile-banking-raghuram-rajan/42943/1#ixzz45Wf5mIuo

Will Unified Payment Interface(UPI) stand up to competition

Along with top billing comes added risks or bets. Since, we know that Unified Payment Interface(UPI) is to be launched on 11th April,2016 from Mumbai, what are the chances that it will outsmart other avenues of payment.
National Payments Corporation of India(NPCI) along with RBI has taken a great leap of faith. If they succeed it would herald a new era. Otherwise there would be egg on the face of Mr. Rajan(RBI gov) and Mr. A P Hota(Chairman, NPCI).
As has been seen in history fortune favors the rich. Facebook's success was partly because everyone wanted to be in friendly terms with people of Harvard or in anyway connected to them.

In payments industry this propensity gets turned upside down because we get paid by a rich corporation/government/institution and we pay relatively poorer people/organizations with our hard earned money. This implies that any payment technology accepted by the poor will win over those meant exclusively for the rich.

Apple Inc is now launching cheaper smartphones, probably to capture the rich-rich payment market. Android Pay and Apple Pay are yet to penetrate and will take longer to gain acceptance and would in due course of time be competitors of the UPI.
The landscape has got muddled with the expected launch of payment banks coinciding with the launch of UPI. People get confused with what is what:- like for example what difference exists between payments bank and mobile wallets or what exactly is UPI?

Customer will be the king:
RBI recently took a major step towards reducing non lending activities in branches by giving out licenses to newer kinds of banks. Ten small finance banks and eleven payment bank licenses have been given out. Even predictions about an imminent market shakeup may go astray as no one knows what is in store for the cashless payment industry.

Airtel with more than 250 million customers, Vodafone with 200 million and Idea with 175 million can leverage their customer base and capture a large part of the market.

PayTM has received top billing as a wallet having a payment bank license too. It recently launched online shopping app and has crossed 125 million monthly active users. India Post, a sleeping giant has a payment bank license with current branch network more than that of SBI and potential for 10-12 times higher branch network with very wide rural reach. India Post is currently sitting on as many as twenty proposals of tie up with banks to market their products. It can better serve customers of a bank, who stay near to the post office. The transition from postal payment bank to regular bank should be seamless for such customers.

NPCI has provided the platform for the UPI and other platforms like the apple pay and android pay may take time to gain market share. Such platforms may be useful to the frequent fliers and the upwardly mobile who eventually would want their money to be transferred to an Indian Payment Bank account to pay for domestic services. What matters is the platform and not so much on which service player wins.
Customer convenience and trust in the system would help the platform gain acceptance.

Aadhaar should be only for Indian Residents

There are demands from the Non Resident Indian(NRI,PIO) Community for aadhaar enrollment of themselves abroad. This issue goes beyond national identification systems and has security implications. I feel it should not be allowed due to the following reasons:

1) Venue of enrollment and sharing of biometric details:

Any country which hosts an enrollment center for collecting biometric details would in all likelihood ask for a copy of the biometric measurements taken. This could endanger the program. As not all foreign governments are friendly and trustworthy we cannot take chances.

2) Presence in India:

One of the foremost and indisputable aspects of enrollment into aadhaar is that all enrollments are happening within the country under controlled conditions. If enrollment is taken out of the country it will be impossible to prove that possession of aadhaar numbers implied the person was in India. This loophole could be exploited by illegal immigrants to claim that they were Persons of Indian Origin living in other countries like Bangladesh and have enrolled in their country itself and since returned to India.

3) Spurious enrollment data:

All that is being done currently to check the veracity of enrollment packets is just biometric uniqueness and the responsibility of demographic data accuracy is on the registrars. If foreign origin registrars are taken in and in case some of them for unknown reasons turn to tampering with bio-metric enrollment devices, may be unlimited number of unique bio-metric prints could be generated which when fed into the system over a long term cause it to be overwhelmed with fake and duplicate Unique numbers(Aadhaars).

4) Authentication requests from overseas:

While Aadhaar is a program to identify Indians In India, if overseas Indians are on-boarded then authentication requests from overseas may lead to violation of privacy or crimes responsibility of which could not be put on the criminal alone but also the identification system too and even worse punishment would need government to government cooperation(we already have enough enemies).

OMCs should collaborate with wallet companies and payment banks

Several years ago I remember the government tried to introduce card reading machines at petrol stations and they were not a huge success due to cumbersome procedure. Its probably time to revisit the idea but with slight change in modality.
Oil Marketing Companies can easily convert a major portion of their sales into cashless transactions. I usually go to the nearest petrol station to get change for five hundred or thousand rupee notes. It once occurred to me how much of cash transaction all these petrol/diesel sales generate and the added work of managing the cash. With increasing use of smartphones, a majority of whom have wallets, Is it not good if such people are offered cashless transactions by using their wallet?

A QR code scan would be all that would be needed, to pay to the fuel service station. Some sort of pull transaction may also be made where the vehicle owner/service station personnel enters an email id or mobile number and gets a request for payment in the payer's wallet application. Then on-wards a simple password authentication is all that is needed to drive away.
It should be even possible for people to pay ahead of time for the fuel and just drive away after the fill.

What is the minimum age for legally using mobile wallets?

Mobile phones with wallets entice customers with a strong value proposition. People may have more control over their spending if they use a wallet than if they use cash. Opposite too may be true for some users. Payment banks that will get launched in april / may this year, may want youngsters to use their wallets. Parents usually give their kids a mobile upon reaching a certain age. They may in future also want to give them pocket money via loading the cash onto their son's/daughter's wallet.

The question is how old should a person be in order to legally use wallets on his own(In India). I mentioned in one post that the yet to be launched Unified Payment Interface(UPI) would be so simple that kids would want to use it to pay for their daily dose of kinder joy. This question obviously goes to the very basic issue of a child turning major. My answer would be it depends on the temperament of the child and whether he/she will disclose the password to someone. A very apt topic of research for sociologists. May be someone could write something on "Banking for the toddlers"...(quip)

Since wallet spending is traceable, would it not be more safer for kids to carry cash in a mobile wallet than in cash? If so would it make sense to reduce the age by which a kid can use a wallet legally? The answer is a big Yes, I hope.

So a kid may want to purchase something in his school canteen or stationery and may want to use a wallet for that. He may even pay his fees or exam fees that way provided a secure/special way is found. Now are the wallet companies willing to sell their product to the youngsters is the question. And is the government willing to reduce the legal age by which a person can use a wallet offered by a payment bank? I am sure such questions are being asked only now that we have come across a special situation. The answer needs to be searched pretty soon.
Currently the only check that is done in on boarding a customer by the wallet companies is an email address verification. If aadhaar based authentication is performed then an issue may arise where age of user is known and may be too low to service the request. We all have read news reports of two year olds using apple phones to purchase goods without their parents knowledge.
P.S: I hope i am not wrong on this and that just like a minimum age for banking even wallet use does indeed have a minimum age requirement. I do understand the cash in wallet is meant to be spent and that the entire risk is borne by the user who loads cash into it.

Terrorism takes its toll on pakistan economy

When a country accuses its neighbor of being sadist and itself goes into suspicion and psychosis/paranoia there is something wrong. Every time, Indian defense budget increases are announced the Pakistani war mongers go into a huddle. They routinely poke India by sending a few terrorists to shoot at free will and bomb a few places, all that we do is to not play cricket with them for some time. Pakistanis throw expletives at Indians at the drop of a hat. Major complaint against India being not brave enough("kayar"). Historically Pakistani economy was doing better than India's due to better policy making and American help. Since Indian government launched liberalization and reforms Pakistan has realized that it cannot compete militarily or economy wise.

Since 1993 economic growth every year in Pakistan was lesser than in India. In four of the years Indian growth was twice that of Pakistan. Read More....

This is a sign of danger for the region especially with the rise of fundamentalists. It is the right time for Pakistan, which was traditionally more developed than India, to now stop and think for its own good.

Here is a graph of how the Indian Economy is racing ahead...

 All this despite the fact that Pakistan gets a big lift from the GCC countries in the form of Aid. Even the Chinese give technical and military support. Typical backstabbers as they are, would not mind if people in there, invite Chinese angst by acting like liberating Tibet or something. Here are ideas as to what Pakistan can do in this changing times to catch up. Many of the restive western Chinese cities are populated by the Uighur Muslims who cannot digest the fact that Islam followers are outnumbered by the Buddhists. The Chinese persecution of Uighur's continues as they do that indirectly to the Rohingyas in Myanmar too. Majority of the Chinese do not consider religion as important any how.

According to Pakistani historians India did not exist before 1947(OMG, that means vasco da gama set out to find Pakistan). Several Indian cities according to them have lottaa of child beggars. These views are shared by the Americans who until recently used to ask India? Where? and some of the more racist ones acknowledge that it is still a country of snake charmers.

Much water has flown down the Ganges since the last time visiting American presidents used to be entertained by snake charmers. Some Americans think India was discovered while all the other countries in the world either existed since ages or are yet to be invaded.

After creating problems(think about bombs dropped) in Japan, Vietnam and a variety of other countries the latest being Syria.... we in India are confused who the Americans think as their enemy? Plants and vegetation?

India is the only large country in the world which buys military equipment at full cost without strings attached(Read as alignment). We are non-aligned to any military grouping. The subtle foreign policy that India extends gets it a big intangible in the form of a soft power status. Our philosophy and statecraft are time tested.

All that's happening in the world now has played out ages ago in India and lessons from them are there for all to read and imbibe(at least this is what i know from those who have read the scriptures). Our ancient and revered Bhagavad Gita is nothing but encouragement by the lord to fight a just-war for the good of mankind.
Seeing human history war is nothing new and with evolution into guerrilla tactics and terrorism("the war of shock and awe") this too shall pass.