Wednesday, July 25, 2012

Scrutiny-SALARIES: IT OFFICIALS AND JUDGES

Salaries of Income Tax Officers and Judges Should be Decided by an Independent Panel and should be made at par with Other Nations

The same goes for judges in India. A recent bill passed by the Parliament had increased the salary of the Chief Justice of India (CJI) from Rs.33,000 to Rs.1 lakh month (equivalent to $2200), while for apex court judges, the salary has been increased to Rs.90,000 (equivalent to $2000) per month. However, a US district judge gets nothing less than $174,000 (as of 2009). The current salary for the Chief Justice in US is $18,625 per month, while the Associate Justices each make $17,825 per month. On an average, an American counterpart earns 8-9 times what an India judge earns!
The same goes for judges in India. A recent bill passed by the Parliament had increased the salary of the Chief Justice of India (CJI) from Rs.33,000 to Rs.1 lakh month (equivalent to $2200), while for apex court judges, the salary has been increased to Rs.90,000 (equivalent to $2000) per month. However, a US district judge gets nothing less than $174,000 (as of 2009). The current salary for the Chief Justice in US is $18,625 per month, while the Associate Justices each make $17,825 per month. On an average, an American counterpart earns 8-9 times what an India judge earns!

In UK, a judge earns £239,845 ($380865). UK spends around €27.4 million ($40.6 million) each year as judges’ salaries. Judges of the Supreme Court earn €257,872 ($382012) each every year. Interestingly, salaries paid to Irish judges are the second highest in the world. A brief glance through High Court judge salaries in France and Germany shows how they earn around $200,000 and $108,000 respectively annually.

India’s judicial pay scale is determined by Pay Commission recommendations, which is done periodically. But the July 2009 National Judicial Pay Commission suggestions were implemented by only Delhi, Maharashtra, and Madhya Pradesh. Similarly, the pay scale revisions of any government employees including income tax officers are based on Pay Commission recommendations approved by the government. In the US, regarding judicial pay adjustment, the pay scale rise is recommended by the Chief Justice. For civilian employees (that includes Internal Revenue Service, IRS, employees) pay scale adjustment, the executive order has to come from the President and it must be ratified by the Congress. A similar pattern is followed in UK and Canada.

In the case of India, where it’s very easy to manipulate laws and dodge the entire system by bribing officials at various cadres, an independent commission to decide the salaries of key government officials in judiciary as well as the IT department is a must. If corruption and high level crimes (by the influential people of society) have to be tackled at the roots, it is imperative that officials in the judiciary and the Income Tax department are at least paid the sky. It’s well said, if you throw peanuts, all you’ll get are...


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Tuesday, July 24, 2012

This Time, The Entire US GDP will be Wiped off!

Question is, will The World see Tech-Bubble 2.0? The Incredible Valuations of New age Internet Startups do Indicate so. And what are we Risking? Amir Moin after an In-Depth analysis, Reveals The Answer – a Mighty lot!

C apitalists hate bubbles. Actually, they first love it. Dimes turn into hundreds of dollars, and before the investors wake up to reality, the stock markets crash. Valuations are reduced to ashes, and what is left of any industry hit by this dust storm is a sight of riches-to-rags investors, with the world looking on in helpless horror. The bursting of the dot com bubble of 2000, is an example. It is not every day that the world can withstand a blow of $6 trillion (the value that stock markets around the world lost between March 10, 2000 and December 31, 2002). And the current times – when US, Eurozone and many countries around the world are still digging themselves out of the slowdown disaster – is certainly not one.

But, the threat is growing by the day. The bubble, we mean. And once again, we find ourselves fearing the unholy apparition symbolising all that the world has suffered in the past, due to the cold savagery unleashed by a handful of financial engineers. And like it happened at the turn of the century, the accused this time again, will be the new age Internet startups. Only this time, the aftermath will be more unpleasant. This is how. Of the 308 companies that went public in 1999 (when the dot-com cycle was at its peak) the 24 largest of them, were valued by the bourses at $70.96 billion (the largest being Agilent Technologies, which was valued at $13.6 billion). As per Morgan Stanley, currently, the combined valuation of just the top five most sought-after unlisted Internet start-ups (which are forecasted to hit bourses anytime by mid-2012), totals a higher $71.3 billion (the largest of them being Facebook, at $50 billion)!

We are staring at a dangerous outcome. Events synonymous to those that led to the previous bubble are being seen in the present days. During the first half of 1999, New York was ablaze with venture capitalists funding any and every dot com start-up. IPO activity surrounding these companies was at an all-time high. According to Thomson Reuters, Wall Street made an estimated $1.3 billion in underwriting fees during that period. Investors in tech-stocks were the happiest of the lot. On March 10, 2000, the NASDAQ index peaked to an all time high of 5132.52, before closing at 5,048.62. That day, the total m-cap of companies listed on NASDAQ was $1.98 trillion. By December 31, 2002, the stock exchange had shed 73.55% of value – amounting to a loss of $1.46 trillion. If a similar mishap is repeated today, the NASDAQ alone will lose $3.01 trillion by December 2013 (as per March 31, 2011, valuation of domestic stock exchanges by World Federation of Exchanges ). Simulate the tumbling reaction on stock markets around the world, and you arrive at value lost of $14.77 trillion over the next 33 months – enough to wipe out the total GDP of US (which stood at $14.80 trillion for 2010, as per US Bureau of Economic Analysis) – sending a ‘stock’ shock wave 146.17% higher than the 2000-2002 Internet-apocalypse!



 
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Friday, July 20, 2012

... And The Face of all that is Shamefully Wrong at ISB

Now look at it this way again to get a better perspective. Soon after the SEC investigations and allegations against him were made public, here is what Rajat Gupta did-or had to do-in the United States. He took ‘leave of absence’ from the $1.4 billion venture fund New Silk Route which he had founded. He quit the boards of Goldman Sachs and Procter & Gamble. His resignation was also accepted by the boards of Genpact, American Airlines and Harman International. In fact, even as this issue goes for printing, we get news that Rajat Gupta has resigned as Chairman of the Governing Board of the Public Health Foundation of India. Some of his colleagues in this board are Nobel Prize winning economist Amartya Sen and Planning Commission Deputy Chairman Montek Singh Ahluwalia. But Gupta continues to be the Chairman of Board of ISB. What is strange is the manner in which Gupta is clinging on to ISB, the B School he helped found by using his amazing network of corporate contacts across the world. If he can quit his positions of trust and authority in the United States as a result of the serious charges against him, why is he further damaging the already damaged reputation of ISB by clinging on? In fact, the official response from ISB is nothing short of brazen, something you would expect from the office of corrupt politicians we all love to hate. It says, “ We note that the U. S. SEC has initiated administrative and civil proceedings against our Chairman, Rajat Gupta. We also note the statement of the counsel for Rajat Gupta, which asserts that the allegations are totally baseless. The ISB community is confident that Rajat Gupta will be vindicated. He continues to be the Chairman of the ISB Executive Board.”

This is not the first time that ISB has been publicly embarrassed because top people involved with the B School have been found involved in notorious scams. The other big name that shamed ISB was M Rammohan Rao, the former Dean of ISB. Rao also happened to be a Board member of Satyam, whose promoter B Ramalinga Raju is now accused of monstrous financial skullduggery. Rao happened to preside over a Board meeting of Satyam that took the controversial decision to buy out Maytas Properties and Maytas Infrastructure, both firms promoted by the family of Ramanlinga Raju. The former Dean of ISB, Rao was an ‘independent’ director of Satyam with the responsibility of protecting the interests of the company and its shareholders. Quite clearly, Rao brazenly failed to perform his duty and would probably have got away with it if other shareholders had not raised a hue and cry about that controversial Board decision of Satyam. Even when the decision of Satyam and the Board was slammed by one and all as one of the worst examples of crony capitalism, Rao remained with the ISB. It is only when Ramalinga Raju made a public confession of his wrong doings and Satyam virtually collapsed that Rao quit as the Dean of ISB. And of course, I have already talked about Anil Kumar, the Ex-Mckinsey honcho and co-founder of ISB who was forced to take ‘leave’ from ISB when the U.S. SEC formally charged him with insider trading back in October, 2009. He is now the star witness in the trial against Rajratnam.

The obvious question to be asked is: what exactly is going on at ISB, that is touted as one of the most prestigious B Schools in the world? Is the institution being run by academicians or by wheeler dealers who conveniently take leave when their follies are exposed in public? Equally important, if Rajat Gupta-either voluntarily or not-has quit his positions in almost all other companies and institutions, what kind of message is being sent by ISB about its adherence to ethics and good governance when Gupta stubbornly clings on to the helm at ISB?

This magazine had two years back ranked ISB as the number one B-School in India. However, good faculty and teaching alone doesn’t make an institution great. It is now clear ISB has become a symbol of all that is rotten in Indian corporate culture. Our corporate titans think that money can buy everything. So ISB has a big campus and has got the money to get the best faculty to come and teach. But education is more than having moneybags and wheeler dealers. It is primarily about running the institute with real educationists. However, just like the Indian corporate sector, ISB seems to believe in running itself with the help of wheeler dealers. And just the way the empty headed corporate heads of India blindly follow the McKinseys of the world without questioning their intellect or commitment, ISB has been getting one after the other fixers on board with extremely questionable ethics and not necessarily high intellect. It is a shame that they have not yet forced Rajat Gupta to resign. If this is the example it is setting for its students in terms of ethics, the Financial Times must stop ranking ISB in their future surveys. Or, is ethics not important when it comes to judging a B-School?


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Thursday, July 19, 2012

What stops The Supreme Court from Allocating The India Gate lawns and other Government Clubs to house The Destitute in Delhi?

The Supreme Court has every year chided the government and given it a deadline for setting up immediate temporary shelters. As happens every year, the Delhi government immediately took up parks and community centres in various localities around Delhi and splendiferously set up tents for the homeless. While the intent was generous, the government conveniently chose to ignore the plight of the typical Delhi family whose children could not use the park, and who had to suffer the social and criminal behaviour that some of the homeless exhibited.

If you believe we’re heartless in saying this, think about it, why doesn’t the government set up homeless shelters in the expansive India Gate and Presidential lawns? What stops the Supreme Court from encouraging positive use of those lawns? Did you cite national security? Or did you mention cleanliness?


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Wednesday, July 18, 2012

In Sudan, An Eelection And A Beginning

President of The United States of America [Presented by Business & Economy in Strategic Alliance with The New York Times]

Not every generation is given the chance to turn the page on the past and write a new chapter in history. Yet today – after 50 years of civil wars that have killed two million people and turned millions more into refugees – this is the opportunity before the people of southern Sudan.

Over the week (of January 9 to January 15, 2011), millions of southern Sudanese will vote on whether to remain part of Sudan or to form their own independent nation. This process – and the actions of Sudanese leaders – will help determine whether people who have known so much suffering will move towards peace and prosperity, or slide backward into bloodshed. It will have consequences not only for Sudan, but also for sub-Saharan Africa and the world.

The historic vote is an exercise in self-determination long in the making, and it is a key part of the 2005 peace agreement that ended the civil war in Sudan. Yet just months ago, with preparations behind schedule, it was uncertain whether this referendum would take place at all. It is for this reason that I gathered with leaders from Sudan and around the world in September to make it clear that the international community was united in its belief that this referendum had to take place and that the will of the people of southern Sudan had to be respected, regardless of the outcome.

In an important step forward, leaders from both northern and southern Sudan – backed by more than 40 nations and international organisations – agreed to work together to ensure that the voting would be timely, peaceful, free and credible and would reflect the will of the Sudanese people. The fact that the voting appears to be starting on time is a tribute to those in Sudan who fulfilled their commitments. Most recently, the government of Sudan said that it would be the first to recognise the south if it voted for independence.

Now, the world is watching, united in its determination to make sure that all parties in Sudan live up to their obligations. As the referendum proceeds, voters must be allowed access to polling stations; they must be able to cast their ballots free from intimidation and coercion. All sides should refrain from inflammatory rhetoric or provocative actions that could raise tensions or prevent voters from expressing their will.

As the ballots are counted, all sides must resist prejudging the outcome. For the results to be credible, the commission that is overseeing the referendum must be free from pressure and interference. In the days ahead, leaders from north and south will need to work together to prevent violence and ensure that isolated incidents do not spiral into wider instability. Under no circumstances should any side use proxy forces in an effort to gain an advantage while we wait for the final results.

A successful vote will be cause for celebration and an inspiring step forward in Africa’s long journey toward democracy and justice. Still, lasting peace in Sudan will demand far more than a credible referendum.

The 2005 peace agreement must be fully implemented – a goal that will require compromise. Border disputes, and the status of the Abyei region, which straddles north and south, need to be resolved peacefully. The safety and citizenship of all Sudanese, especially minorities – southerners in the north and northerners in the south – have to be protected. Arrangements must be made for the transparent distribution of oil revenues, which can contribute to development. The return of refugees needs to be managed with extraordinary care to prevent another humanitarian catastrophe.

If the south chooses independence, the international community, including the United States, will have an interest in ensuring that the two nations that emerge succeed as stable and economically viable neighbours, because their fortunes are linked. Southern Sudan, in particular, will need partners in the long-term task of fulfilling the political and economic aspirations of its people.

Finally, there can be no lasting peace in Sudan without lasting peace in the western Sudan region of Darfur. The deaths of hundreds of thousands of innocent Darfuris – and the plight of refugees like those I met in a camp in neighbouring Chad five years ago – must never be forgotten. Here, too, the world is watching. The government of Sudan must live up to its international obligations. Attacks on civilians must stop. UN peacekeepers and aid workers must be free to reach those in need.

As I told Sudanese leaders in September, the United States will not abandon the people of Darfur. We will continue our diplomatic efforts to end the crisis there once and for all. Other nations must use their influence to bring all parties to the table and ensure they negotiate in good faith. And we will continue to insist that lasting peace in Darfur include accountability for crimes that have been committed, including genocide.

Along with our international partners, the United States will continue to play a leadership role in helping all the Sudanese people realise the peace and progress they deserve. Today, I am repeating my offer to Sudan’s leaders – if you fulfill your obligations and choose peace, there is a path to normal relations with the United States, including the lifting of economic sanctions and beginning the process, in accordance with United States law, of removing Sudan from the list of states that sponsor terrorism. In contrast, those who flout their international obligations will face more pressure and isolation.

Millions of Sudanese are making their way to the polls to determine their destiny. This is the moment when leaders of courage and vision can guide their people to a better day. Those who make the right choice will be remembered by history – they will also have a steady partner in the United States.


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