No Guilt Profit

“Have you considered Social Impact Investing as an asset class?” is what my friendly banker asked me. “You mean in something like Facebook or Snapchat or Twitter? Certainly making a lot of social and financial impact from what I hear” I joked. He smiled knowing well that I did not mean what I said. He was right in his assumption. I have been toying to get into this space for the last couple of years; not as an investor, but as an active participant with direct involvement in some part of the process that leads to creating a social entrepreneur. It’s something that that is so dear to my heart; to make a positive difference – where scale really does not matter. It’s also been a personal belief that social enterprise and not charities are a better way of serving Society, as the elements of profitability and accountability force in the concepts of efficiency and scale. (Our self serving God men apply this rule selfishly and very successfully).   But, on a positive note, any enterprise that allows for personal fulfillment in climbing Maslov's pyramid and deliver the most basic need "a positive return on investment" is an exercise in "profit without guilt". I have read news and stories of some fabulous work being done in this area; and it would gratify me a great deal to raise a fund to ignite socially impacting ideas to reality.  Somehow, my CV has held no appeal to any of the organizations that I have applied to; and my involvement has been restricted to making modest contributions through crowd-funding to ventures that are being run by young professionals, and achieving a lot of good. So, yes, my eyes lit up, when Mr. Banker handed me an invite to attend an event on Social Impact Investing – where, I was told, I would meet up with several interesting personalities connected with this space; and if not – I was in for a fabulous themed dinner organized by Chef Hemant Oberoi himself. What an incentive – intellectual and/or intestinal gratification.

Interesting personalities is an understatement. I met some magnificent minds, both young and old that evening. What I heard from them was a revelation; something that shook and stirred my soul enough to put down their views in my blog as a mark of salute to their enterprise.

It struck him that the art of weaving hand knotted rugs would soon die out in Rajasthan; as the people involved in the weaving process were from under privileged minorities. To survive, weaving was just not enough means to earn money or respect. It was not that there was no money in the trade; in fact there was lots of it; but most of the money was sliced out by the middlemen and end traders. So to set the system right; defying caste, community and family ostracization; he created an organization that now contracts over 45,000 artisans as job work contractors spread over 600 villages in 6 states of India, producing 500,000 rugs every year. For Nand Kishore Chaudhary; the journey began in 1978 with a modest capital of Rs 5,000 and some space in the backyard that he borrowed from his father to set up 2 looms and 9 weavers. His growing proximity to the “low caste” weavers disturbed his family; but for him, it was a lesson in understanding of their joys and pains – which is why he feels - he has been able to achieve the scale at which “Jaipur Rugs” operates today. His social business model is a matter of dissertation at top ivy-league institutes; and while he has won tons of awards and accolades with a few brickbats too – none of it seems to have impacted his simplicity or humanness.

 The second man who impressed me was probably as old as the first; somewhere in his early sixties – at least from his looks. He started an enterprise just 3 years and not 3 decades ago with a capital of around Rs 30 million that today commands a valuation of Rs 300 million hearing which several side conversations went into silence. His business vision took seed as a solution to providing clean energy to the millions of radio towers that provide uninterrupted mobile telecommunication capability to the many million cell phone users across India. “Do you know how much diesel is consumed each year to keeps these towers powered?” asked Sushil Jiwarajka. “Close to half a billion liters. Do you know that there are over a billion handsets that are in use in India as we speak” he added. “Do you know half the diesel meant for these towers is stolen by the diesel mafia?” His Company OMC (Omnigrid Micropower Company) set up small solar and battery power units for these towers and the villages in the immediate vicinity. He told us stories of places in India which had mobile phones but no electricity and the sufferance of the people, especially women and children because of the lack of power. Some of the stories came straight out of unbelievable but true; like how a woman accidently poisoned her crying child at night - thinking she was giving him milk to quell his hunger. He then described the change that a single light, fan and electric point from a 15 Watt battery in each house made to the entire social behavior of the village they resided in. He was told he would wind up his company in less than a year as people would not pay for the power as well as destroy the infrastructure he was creating incited by the power lords in the area. In fact, the empowered people have stood up against the power mafia and have taken up the safety and security of the mini solar plants the same way they would protect their own homes. Payments for the power are prompt based on a pay as you use model. There was a time when getting a single rupee to fund his idea was an exercise in futility and today there are large international funds wanting to invest in his venture. Social entrepreneurship has been gratifying for him and his investors.

The third person I stood up to cheer was a young man of 23. He walked up confidently to the dias and started off by saying “A year or so back, my company did a turnover of Rs 50,000 a month. Today it does around Rs. 5 million a month. I intend to take the turnover to Rs 50 million a month by next year end and raise US$ 100 million on the stock market soon thereafter”. I have seen and heard many confident young visionaries and that did not impress me much. But, this boyish looking man, an engineer from MIT (USA), winner of multiple citations and awards from heads of states including ex-President of India Mr. Abdul Kalam is blind from birth. His parents hail from rural Andhra Pradesh and were advised by well wishers to dump the blind child in the well, as he would be a burden to look after. Thankfully, the parents of Srikanth Bolla did not heed to the advice and today he runs a company that produces packaging and consumer products made from tree waste. But wait, that is not the impressive part either. Most of the people working in the company are physically or intellectually challenged. He may be visually challenged, but that has not stopped him from understanding how to create a manufacturing process that can be more efficiently run by the disabled than people we call normal. Now that really requires some vision. There are some 80 million disabled people in India and Srikanth serves as a role model that provides them with the self esteem that they are not a burden to society. Incidentally, he is not out do any one a favour - he truly believes that a disabled person is actually more efficient than a normal person because of the passion and commitment level of the former to have been entrusted with responsibility. Now tell him how can one not stand up and applause at his achievements?

I met several people that evening who have given up top paying jobs with multinationals to pursue social entrepreneurship. By no means are they driven by altruism; and by no means greed either. They have understood that the intellectual capital in terms of adaptive talent is phenomenal in what most describe as the bottom of the pyramid population in India. That segment not only presents a sea of opportunity but an ocean of pent up demand; and servicing that simply - cost effectively - in sync with the social and natural environment is equal to a universe of smiles for all.  

Let me end by saying, the dinner did not disappoint either and I left with a lot of food for thought. 

Finding Mr. Right (Developer) in the Wrong market

Now that investing in debt instruments is really not such a great idea in India (as a result of the revised taxation norms announced by the FM in July this year); my banker suggested I look at investing in a real estate (RE) fund as a diversification strategy. My answer to his suggestion was a plain and simple "No". My experience with having worked for a RE fund; then, having invested in a RE fund; and also having heard disaster stories of various RE funds; I was quite convinced that I had better chances of enjoying a swim with the sharks in the Red Sea than investing in any RE fund in India. A banker does not remain a banker for too long unless he is a good salesman and his suggestion was that I at least meet with the CEO of the fund and understand his investment ideology before giving up the idea. He was quite certain that I would change my view after hearing what the fund manager had to say as the fund's strategy was designed to succeed in a depressed market and deliver better than alpha return on an upswing. Well I thought - why not - if nothing else, I would learn something new from a fund manager who was confident of raising money for real estate in a market that is just beginning to shy away from it.

I am not a great fan of Indian developers in the RE space and I have lost quite a bit of my respect for PE funds in this space too. Between them; they have succeeded in hyper inflating values of land and building (any use) making housing a dream for the common man in addition to making the cost of living in India prohibitive. In their pursuit to extract super returns from the Indian markets the PE funds have created their own "Frankenstein".  When the era of PE in RE space set-in sometime 2005-6; I felt it would usher in a positive change in the way the real estate sector works in India. Transactions in "black" would gradually disappear; quality of construction would improve; planning of developments would improve; and the nexus between developer and non kosher source of funds would reduce. What I see happening is just the contrary - at an even grander scale - at least in the majority of projects. By no means am I saying that all developers are guilty of these sins. But to find the few good men in this market; is like finding a needle in a haystack. The biggest sufferers in this whole game apart from the consumer have been the foreign investors invested in the PE funds. The General Partners and managers running the fund have almost always walked away with heavy fees on a year on year basis whereas the investors have seen their investments return low single digit returns taking into account the rupee depreciation and developer defaults. No wonder Indian real estate has not been a good word in foreign money markets for quite some time now. Even our own rising stock markets seem to be treating listed RE development companies with bit of caution, knowing well that most of them may look good on the surface, but may have strong negative undercurrents beneath. 

So in this bleak market of real estate where there is an increasing murmur of "overbuilt and overpriced" being heard - what strategy would a fund manager employ to deliver great returns ethically? I asked this gentleman who visited me for his secret sauce recipe. He said that his rules were quite simple - 5 rules of Do's and 5 rules of Don'ts :

The Do list:
1. Involve the anchor investors in the decision making so that the smaller investors know that their interests are also taken care of.
2. Find projects in new growth corridors and stay away as far as possible from established development zones.
3. Deal with Developers having a size-able track record of quality completion, along with a near "clean" record with consumers; and, are also willing to sell transparently in what is called "all white" transactions. (I did not know this breed existed - but apparently it does).
4. Get in at land stage with step in clauses in case of developer default.
5. Most important - find developers that are real developers in terms of them having their own (in house) asset management, project management and design teams; sales team; liaison team; and all such people required to ensure the right, timely and quality end product.

The Don't List:
1. Stay away from luxury developments - be it retail, commercial or residential.
2. Stay away from Developers that have over committed themselves on large and/or super grand projects and he rattled a few names which made absolute sense to me but would scare the living daylights from most would be investors.
3. Stay away from projects where the land values are hyper-inflated.
4. Keep away from Developers that have received significant funding from foreign PE Funds by way of equity and/or quasi debt.
5. Don't do deals with developers offering exceptionally high returns or are agreeing to terms where very high returns are expected.

I almost reached for my cheque book, as I was certain that if the above investment ideology is followed, the fund would most certainly make money for its investors. Tempted as I was - I did not participate as the commitment expected was much larger than what my risk appetite could afford in terms of both quantum and time. My own investment ideology tells me that investing in the equity of listed RE development companies that meet the above norms makes better sense as most of them are totally undervalued  and also allow for self timed exits as per market conditions. Alternatively, wait a while for some REITs to list as in the current market; the acquisition price will have to correct itself to get the right returns expected by investors in this space. It is said that in India the price of real estate will never fall and that's the reason its an investment better than even gold. But, I think, like gold, it too should see a massive correction to bring back a balance that is distorted as of now and showing signs of developing into a sub-prime type of crisis. 

Modi-nomics

Globally oil price is falling but US Dollar is rising;
net cost of oil import for India still the same.
The Indian Rupee is falling but gold imports are rising; 
keeping India's balance of payments in shame. 
If inflation is falling then why cost of essentials rising; 
somewhere there is a scam to tame. 
Production - exports falling but still stock markets are rising; 
higher and higher the indices aim.
Interest rates ain't falling but debt takers are rising;
its hard to understand this banking game.
Real estate ain't falling but unsold inventory is rising; 
on debt this industry stands lame. 
FDI ain't falling but infra investments not yet rising
despite the commitments from leaders that came. 
Are good days coming to see India shining; 
or will Modi-nomics equal bubble-nomics in name? 

Branded Residences - losing sheen

I can't put a finger on a person or entity that got this concept going. Was it Donald Trump or Adrian Zecha who fathered it? Or does the credit go to Four Seasons or some other marquee hotel brand for the same? Or, was it something that evolved as an outcome of the fractional ownership industry where top brands loathe to the road shark selling techniques of timeshare sold a residence with a name guarantee on it. All I do know is that it is an "ego" product that does deliver a quality living space at a hefty price tag and heftier running cost. 

Until some 10 years back; exclusive hotel brands marketed residences at equally exclusive resort locations. It did give a nice high to the buyer who felt that (s)he had acquired the whole resort-hotel by just acquiring one unit within it. And, it gave a bigger high knowing that it would not be used and abused by any other person - like a hotel room is - should the owner not wish to put the unit back on a sale and leaseback basis. For a resort developer, this was the perfect way to recover bulk of the cost (if not make a profit) of very expensive and exclusive developments ensuring the project's financial viability. 

As real estate markets boomed around the world in the last 10 years; branded residences increasingly became a marketing tool to differentiate exclusive developments from those that were labeled with adjectives like luxury, premium, and unique. The brag rights for owning a branded residence in the city where one lived, as compared to some far flung holiday destinations must have been much greater to warrant this concept being adopted by virtually every major luxury apartment developer around the globe. Soon "Trump Tower" was not only a New York feature and "Four Seasons Residences" could be found alongside virtually every new Four Seasons hotel and at certain locations the requirement of a hotel has been dispensed with altogether. It has in time become the path to viability on super expensive real estate as buyers are willing to pay 60%+ premium over similar unbranded assets. At least that is the story being sold by the brands to the developers; and in a country like India - where the people are very brand and brag conscious - this is God's own truth being said. Well - almost. 

The last 2 to 3 years, contrary to market belief; there has seen a dip in luxury apartment sales. The impact of slowdown has hurt this segment of real estate substantially. It is only the innovative off-plan selling by developers - that is -  to defer collection of profit and land cost to the end of the project completion (20:80 payment plans) that has facilitated offloading the US$ 1,000,000+  cost apartments. In addition, developers have had to bump up the percentages and fees paid to brokers and consultants to push sales. The selling community never had it so good. Yes, the falling rupee, new wealth, and ease of borrowing for residential inventory has made acquisition of premium goods much easier under the circumstances. But, there is a growing realization that many of these projects may see a longer than planned for project cycle (if at all); and, should the completion happen in a down cycle then those buying for an investment may get burned. 

Well, the solution for that is easy - have cash - will talk. If the above was not enough, developers are offering deep discounts to make investor exits less risky and the situation is that branded residences are possibly claiming not more than a 10% - 15% premium over similar class unbranded developments. With brands themselves taking away 10%+ as their fees to lend their names - does it make commercial sense anymore to build one? Buyers that have received delivery of such apartments are now questioning their decision to buy. The recent hike in municipal taxes and utility dues; service tax on maintenance bills; high maintenance costs in corrosive conditions of most Indian cities; inadequate water supply; a lack of quick and proper access to emergency services due to poor infrastructure conditions and emergency equipment; sharing of boundaries with undesirable real estate (slums, cemeteries, local markets); and most important inability to get tenants willing to pay that extra premium in rent has made buying a branded residence a big question for many. 

Yes, this land has ego written all over it; but hidden beneath that is a stronger attribute called cost consciousness - the "kitna deti hai" (how much does it average) attitude that overrides the former by miles. I remember the time when I was growing up - the sight of an occasional Mercedes or BMW was a head turner amongst the hundreds of shoddy built local cars. Today; there are hundreds of the big 3 German cars on road blending in unnoticed with thousands of well built cars from Japan, Korea, Europe, and even India. There lies my point that branded residences too will lose their sheen from an ownership brag point of view as more and more hit the RE turf. One would own them purely for self satisfaction and the superior quality and services they promise to deliver albeit at a very high cost. Will they deliver on the promise? Now that's another story and you may want to read my previous blog called "Shitty Shitty Big Brand"

Hotels - It's BUY BUY for some and BYE BYE for many

Flashback circa 2006 - GRI - New Delhi. I was working as a consultant to a Real Estate Fund back then advising it on the hospitality sector, and attended this event on its behalf. All I heard there was that every known and unknown developer attending the conference was going to build more hotels than the number of  fingers and toes he had combined in the next 4 to 5 years. Such scale of development had eluded the best of the best in the Indian hospitality industry until then. Each one of them was sold on the story that the whole of India has lesser number of rooms than Bangkok. India had some 90,000 hotel rooms (of which some 50,000 were branded) back then and needed to double its inventory real quick - that is by 2010. Then, I heard a sane voice from one of the attendees (who was leading Accor's initiative in India at that time) that the real number is closer to 500,000 when all forms of temporary accommodation were added up and doubling the inventory was not really the answer. But like all sane voices; it was drowned by the noise created by every hotel and property consultant ridiculing that claim.  The great gold rush in the Indian hospitality sector had begun. Projects were being conceived at unheard of land rates with occupancy, average daily rate and valuation assumptions to justify the financial viability to the numerous bankers and private equity players waiting to pour money in this game.

Yesterday; 18th Nov. 2014, I was invited to attend a seminar organized by a leading law firm on "Issues affecting Indian hospitality sector". Got to hear some interesting facts; some amused me and others that got me thinking on what's in store for this sector next. I learnt that the industry compounded annual growth; charted for the last 15 years tells us that demand and supply have kept pace evenly at about 11% with the demand a tad ahead of supply. Then, all hotels should be theoretically clocking at least 80% + occupancy; which is far from the truth. The same statistician rolled out more numbers that the first year performance for new hotel openings has progressively declined from 47% in 2009  to 35% now on account of supply pressures. Occupancy percentages overall for the last 5 years has been stagnant at about 58% and average room rates (ARR) have actually shrunk 3% or more depending on segment. The dark horse holding up the gloom seem to be the 2 star hotel segment that has seen ARRs climb 7.7% in last 5 years with occupancies averaging around 62%. To put all these numbers in a better perspective; India today has some 180,000 hotel rooms across all categories of which 100,000 are branded; and wait; the next couple of years will see the total number cross 250,000 rooms with at least 150,000 of them in the branded category. I am not sure if these totals include the temporary accommodation units as my take is that by year 2016 - India would have close to 1 million units servicing this type of stay need.

As of today, the situation looks more than terrible. Travel around the country and one will see several hotel skeletons doting every city; as much as those of residential and commercial buildings. It's easy to understand why this situation is staring at our face. The nation has gone from a rising to a falling star status in the last 10 years as has its currency. Global economies have not done much better either. Unplanned developments with very little thought, study and planning fanned by developer egos and easy finance from all kinds of investors and lenders has not helped the cause either. From a hotel perspective, the only places that have a smile to show are Mumbai, Delhi (not NCR), Goa and kolkatta. Rest of the Country has over supply written all over it. Pune and Bangalore are inching back to survival from an occupancy but not a rate perspective. Thankfully, India's natural inefficiency in delivering project completion on time has saved the industry from a situation that could have been much worse than it is now. Despite all the technological developments in the construction sector; India still requires an average 29 months to deliver an affordable hotel at a cost of between 24 lakhs to 40 lakhs a room (without land) whereas the same hotel could be built in less than 14 months at the same cost per room inclusive of land. With occupancy and rates continuing to remain the way they are for the next couple of years, most hotels will find it very hard to justify their viability to money backing them. It is certainly going to be a time when a lot of owners holding completed and incomplete assets are going to check-out saying Bye Bye to this industry.

Yet, before the industry decides to cry tears of blood in unison; there is not only a glimmer of hope but a fantastic opportunity waiting out there. Hotel industry usually trails the spurt in economy by about 8 quarters and that means that by 2017-18 the industry should start correcting upward. Anyone committed to this sector and sitting on cash is in a driving position to acquire quality finished and unfinished assets. Specialization in hospitality, along with efficiency in executing projects, managing operations and a strong marketing backbone are keys to winning this game. While I doubt if the Indian REIT structure in its current context will help this sector; hotels being classified as infrastructure can certainly benefit from InvITs (Infrastructure Investment Trusts). Further, the entire lending industry is ready for a reshape and it is not impossible now to get financial institutions to commit longer duration money with repayment programs tailored to the health of the asset - as well as take a more rational approach to security and collateral. I am already hearing the call of Buy Buy getting louder on this street called the "hospitality world".

Pain is good - and like it signals healing in our body - it's also a sign of healing in the industry. Everyone has learnt lessons in the last few years. No longer are hotel brands and operators (new or old) spoiling the developers by offering them ridiculously high fixed leases or making investments in shells that the former do not own or control. Leases and investments are increasingly linked with performance and secured by contracts that make operators virtual owners of the property. Developers have understood that hotels are not the classic real estate business with a build-sell-value formula. Building hotels requires sustainable quality which they don't care for when making inventory to sell; and running hotels needs micro attention which can sap a lot of time from their super profitable construction business - which means finding operators to run their properties. Hiring an operator is not the same as hiring a contractor as developers have learnt and getting away with under performance is now increasing unacceptable as operators have learnt. Recognizing "Prefered Owner Returns"; subordination of fees to debt service; linking fees to operating results are increasingly making life difficult for international brands to conclude business in India and better for domestic operators who understand these issues well - and are ready to commit money if need be to ensure the health of the hotel they put their name on. The best is that most developers are now understanding that the land pricing for and yields from hotels are just not the same as commercial or residential or retail. But, the long term value that wellrun hotels command are unmatched by other spaces they build - and that's driving committed developers into this segment; ones who understand that the pain experienced in the first few years is more than made up by the gain that hotels deliver thereafter.

Offices or Happy Work Spaces? Disruption in the Real Estate World - Part 2

It's an age of experimentation which allows for disruption. No set rules for how you live, work and play. Ownership is passe - shared is in (almost) - and it even applies to spaces that we thought we had control over. Applying this theorem to workplaces; from cabins and cubicles; to an open work station format; to team benches - the office is evolving. Coffee bar, snooze room, recreation and relax zone, kids pen and many such concepts have moved from being a novelty to a regular feature in large format offices. Innovation is guiding design and prospective employees are making decisions on where they will work and where not despite high unemployment. The new generation is more sure of its capabilities and there is a growing shift away from making lots of money to more in life.

Richard Branson recently announced a work as you please policy allowing his employees to take holidays at will and in return give their best on the days they are working. Such examples are showcasing the extent to which organizations are willing to go to to retain trained employees and get the best out of them. How is that going to impact the way offices are built in India?

Well, if the work environment needs to bring in a fun environment then the decision cannot be driven by bums per square foot seated - which is the case at high cost locations. Mumbai ranks No. 3 in the world for the highest office rents and probably somewhere there for the worst office quality in general. If employers had they ability; they would double deck employees to average out the high costs. But that is changing, If studies are any indication of the truth in the market; then there is a gradual increase in office vacancies happening all over the Country. The national average is about 30% and that's a scary number when one factors in the millions of unfinished square feet waiting to be clad and put on offer. Apart from a few sectors high rents sought in the CBD and SBD locations of this Country are not conducive to running a business. The low cost advantage that India once enjoyed in terms of land and labour is history. We have over inflated our own worth and become globally uncompetitive and that's probably why our real worth has been corrected down 50% in terms of the currencies of measure.

Economics is forcing organizations to down size offices or shift the middle and lower bulk to more economic back room locations. As a result transportation, time and productivity parameters of an employee are being impacted. It's a different matter that many of the office complexes built in remote zones are at wrong locations; the bigger worry is that they have been built wrong too. Then, to top it, to make up for the high cost elements included by the developers to make these swank campuses the rents are off the mark too even though they are less than half of what one would see in CBD and SBD of Metros and T1 cities. In a way, with the aid of technology; its easier to work from home to cut down cost of living and improve quality of life. But in a city like Mumbai where 2 to 3 generations of a family are packed in less than a 1000 ft2 of real and fictitious area - that too is not much of an option.

Gated work-stay campuses are on the rise but that is great for new age sectors. Old world structures cannot easily adapt to such set ups. Ask any developer and he will blame the Government, Goons Global woes and God for the high cost of creating and selling a foot square. His Greed is never a factor. Each time the Government increases the Floor Space Index or FSI (area allowed to be constructed on a ft2 of land) to drive down the overall cost of land; the cost actually goes up because the prevailing land rate is multiplied by the new higher FSI. Redevelopment and regeneration of areas were supposedly planned to usher in lower prices and more open spaces have actually done the reverse as well. Ultimately there will be a situation where the Developer and or his investors will have to go near bald with heavy haircuts to sell or let the spaces not wanting to see a deserted edifice. Private Equity operators believe that REITs are the only hope left to bring in better construction standards and decent rates as the very nature of how a REIT is run depends on these two factors. I disagree as I think that the chain is as strong as its weakest link and REIT's will be run by more or less the same guys who created a mess in the first place.

If it could happen in New York and London - it will happen in Mumbai too. Someday, employees will sing the "Happy" song at happy workplaces because the problem now is an opportunity for a major disruption - and the seed for it must be germinating in some brilliant minds as I write this blog.

Disruption in the Real Estate World - Part 1 (Retail)

When the moon is in the Seventh Heaven
And Earth aligns with Mars
Then disruption will guide the planets
And the e-age will steer the stars

No, I have not turned to astrology as a profession; though God knows I would probably make more money professing speculative information that can be never be tested and the listener lapping it up as words from God. Having attended a conference called "What's new: Predictions for the future - Trends shaping Indian Real estate" I am perhaps in a crystal ball gazing mood.

One of the arguments I heard concerned the retail industry. The big question being would e-tailing kill shopping malls. Until a few years back; e-tailing in India was the David and malls the Goliath. Suddenly, the roles seemed to have reversed with e-tailers that were gasping for breath for survival were suddenly valued as billion dollar properties and malls that were demanding billion dollar valuations yesterday are struggling to survive. There are some 500+ malls in India of which only 25% have earned the title of success. Rest are being titled monstrosities ill conceived by egoistic developers and crazy architects who have no idea of where or what they were building or designing, and to what end except for one blinkered thought that India will someday allow FDI in retail and the nation will become the shopping destination of the world.

e-Tailing extracted laughter from these great builders. "People trust only what they can see or touch and will deal only with people they can talk to. After all what fun is shopping if you cannot bargain? Everyone does not have access to the net and those who have don't trust it. This is India my friend not America or Europe" is what I often heard. But, that was before the cheap smartphone wave and suddenly everyone had the net in their palms. Regulation made it compulsory for credit and debit cards to go for higher levels of security and today India has one of the best encryption and secured systems for e-transactions. e-tailers took the feel and touch bit quite seriously and introduced Cash on Delivery, return if not satisfied policies, compare and shop policies. Soon, local retailers suffering from low marketing reach, thin margins and high rents started cutting deals with e-tailers to push their wares.

Air conditioned fancy malls realizing that they had become nothing more than picnic spots for window shoppers started losing tenancies. After all the cost of the high rent is buried in the product you buy. Over the years the smart mall owners learnt to switch from high fixed rents to variable plus thin fixed or no fixed formats to keep good names inside. For many malls, even this was not an alternative. A mall developer today must be thinking that had he invested that same USD 25+ million in developing an e-selling platform rather than the concrete structure he would probably be valued at 10X his investment instead of current land value (that has not changed much) minus 10% (for demolition it) -  which is what I heard a large ticket investor say when asked how much he would pay to acquire a distressed mall.

In this David and Goliath war; the new David seems to be making the same mistake - but on the other extreme. Selling goods below cost with an eye on customer acquisition. Sustainable? I don't know. I still feel e-tailing cannot offer the smell of printed books of a bookstore or the smell of bakes and coffee at a coffee shop or any of the sensory and social experiences of a mall. Malls are and will be the place for E(xperience)-tailing. The way they are built may change over time as well as the way business is transacted. Maybe each of the e-tailers will end up owning its own mall in every City or town or maybe they will be defined by a product range they sell. But they will survive and even flourish. India cannot keep FDI in retail out for long and global pressures will force it to happen.

It is very clear however that Real Estate is no longer immune to disruption. Its happened in retail and its happening in office spaces too (Part 2). It's time for developers to open their eyes and realize that they have to change the way they build and do business.

REITs and RIET of Real Estate

There seems to be a heady buzz in the Real Estate (RE) sector on the back of the new FDI (Foreign Direct Investment) policy and the new reality of Real Estate Investment Trusts (REITs) announced by the current government. This excitement was clearly evident at a conference that I attended on real estate organized by the Royal Institute of Chartered Surveyors (RICS).  I am always keen to hear where this sector is headed as hotels are an integral and important part of this core sector.  The theme stated "What's New: Predictions for the future - Trends shaping Indian Real Estate". It covered residential, retail, commercial segments; and nothing about hotels. Nothing; not even a mention in any one of the topics discussed. So, from being the super star - flavour of the season - and what not a few years back; this segment seems to have seriously fallen to the bottom of the barrel for the RE guys. I took consolation in the thought that maybe hospitality now truly belongs to the Infrastructure sector and not "Real Estate" and will probably get better visibility at larger - more important - forums. In all honesty, even I know that hospitality is no longer hot property with RE given the number of deals falling on my table for rescue. But, this is not a blog on hotels. (Guys! eggs and tomatoes are expensive so think before you toss them at anyone - especially someone who can do miracles with them).

Back to the topic. The new FDI policy has considerably reduced the project qualification requirements to allow much smaller projects to be consider for funding. Idea being to encourage growth in T2 and T3 towns with a larger agenda to promote SMART cities in those locations. There seems to be a lot of scepticism if it will actually achieve it's goal as FDI of now will rarely chase high risk. The beneficiaries may be smaller projects in Metro and T1 Cities and small to medium size developers with a good track record in delivery and with a professional team that treats that money with respect will end up as the real winners. But, there is a social change emerging in the way the younger generation perceives life. No longer is there a thirst to go Urban with the high cost and high stress lifestyle associated with it; rather go RURBAN where the lifestyle is relaxed; costs of living are low and where one does not live in a pigeon hole. That is the real SMART city of tomorrow and I have come across examples of villages that have transformed themselves into clean, green, eco-sensitive, reliant on renewable energy, with 100% literacy, completely net connected and so on.
http://www.scoopwhoop.com/inothernews/mera-gaon-mahaan/?ref=social&type=fb&b=0

I actually hope that FDI becomes the RIET choice (Rural India's Economic Thrust). However, attracting FDI today may be a bit of challenge. Yes, there is a strong case for India to attract capital for real estate - afterall there are very few places left in the whole wide world that actually can. But, the real returns on capital that had come into India between 2006-7 to 2009-10 (good times) is barely in single digits when one considers that the Rupee has depreciated 50% in the last 4 years and that it is hard to quote successful exits to begin with. Moreover, the end of  "Quantitative Easing" in the USA - the interest rates overseas may slowly and steadily inch up making investments in emerging markets a tad more unattractive. Then, do we need foreign money when there is so much money in India itself? That is exactly the belief many fund managers have - having raised tons of money locally for the RE sector. Investors, both big and small believe that deploying money in RE through an institution is a lot better given its better abilities to conduct the due diligence much  as well as secure the property as tightly a bank would. So, Indian money raised has been more structured debt at high interest rather than pure risk high return private equity. Most FDI post 2009 has also come in the same form to ensure a year on year return at a rate when adjusted would match the high interest rates charged by banks.

The developers were the happiest when they got PE money as there was no pressure to guarantee any form of return. Guess they were not the only greedy ones and those in control of giving out development permissions joined the party and no one really cared as playing on "Other People's Money" was always fun. No transparency, no reporting requirements, no project takeover threats either, and with local litigation laws being the way they are; the developer was under no threat at all. I know of cases where developers have asked Board Members representing their PE investors to exit at super low returns or not see a single rupee be returned for the next 100 years. Well wisdom does catch up and that's the reason why nearly 60% of the money brought in by PE from overseas sits undeployed.

The money sitting on the fence is waiting for the final brushes on the REITs policy to facilitate purchase a portfolio of good quality, income earning assets at good locations and get the required returns on capital through listing exits. While there is excitement that it will improve quality of construction, bring in transparency and become a source for raising funds for those with a proven track record; REITs will compete more with debt instruments in terms of returns; and with equities returning into the favourable zone with investors - will find it hard to attract capital to itself.

As a sector, real estate in India is suffering from "premature obesity" created by over inflated valuations by the greedy few that control the market. The actual user is still not the buyer and inventory meant to make housing and commerce more affordable is actually being bought by the very people who should not. Luckily for all, India is looking to enter its growth cycle and the excess inventory in all segments may soon find actual buyers. A massive correction will help; but that's not happening anytime soon as most developments have come up on no-pressure money. That in itself will keep new money away from the sector as at current values most acquisitions are unable to give healthy returns. Property Consultants and Developers believe that Indian RE sector is still an infant given the rising population and wealth in India. They have no choice but to believe that. Yet across the border a more populous and richer nation has swanky vacant dead cities that no one wants to go to.

I will not put a wreath on Real Estate anytime soon; but it's time the arrogance of this industry took a hard beating before it becomes to look like a snake eating its own tail - where one does not know if it is reinventing or killing itself.

Make in India

I don't know if anyone can remember; but there was a time when Japan was laughed upon for its manufacturing abilities. It's hard to even find articles on the net referring to that period when Japan was notorious for cheap, badly made knock offs of almost everything under the sun from cars to cameras. Over time Japanese pride changed the image and soon "Made in Japan" stood out as a brand in itself. It overtook the world in technology and in the World War of economics; almost took over the entire world. Many smaller nation like Korea, Malaysia, Thailand and Taiwan tried to imitate the Japanese model but with limited success. China is probably the only nation that has succeeded in a variation of what the Japanese did by cloning and owning (as its own) ideas rather than coming up with path breaking new ideas. In time that too may change as is the fact that "Made in China" though not a brand in itself - is now a given for the entire manufacturing spectrum from bad to the best for everything made in the world.

India on the other hand; despite having a relatively freer economy as compared to the Chinese some 30 years back - lost out in the race to become a world manufacturing hub despite its so called low cost labour advantage. I have tried to search for answers and have come up with a conclusion (right or wrong) that India's failure stems from a lack of belief in the concept called "national pride". We are Maharashtrians or Punjabis or Tamil or Gujarati first - Indian second. Somehow; years of foreign rule has brainwashed us that "imported" is better and that has kind of become a self fulfilling prophecy. It's a different matter that the manufacturing policy is based on a system of entry-exit and operational hurdles that is the biggest put off for manufacturing anything in this Country; but those who do know how to bend the system and thrive in an environment that encourages evasion, cheating, sub standard and inconsistent quality among a list of several negatives. In general; being mediocre is fine - produce now and refine later is the manufacturing mantra - knowing well that the demand is limitless for the scarce goods produced as a result of which the consumer will lap up anything without recourse the very limited consumer protection systems in place.

The malaise is so contagious that even foreign brands that have set up shop in India are now getting used to accepting quality defects in their famed zero tolerance production lines as a part of life here. Consumers too for some reason have no will to complain about shoddy service or products being dished to them. Too busy to make the effort or too low down in the pecking order to be taken notice of.

Will a change of laws alone bring about a change in the Indian manufacturing context? Laws have no effect on the level of corruption in this nation and I am not referring to monetary corruption alone. Increase in productivity, management and labour attitude, adherence to quality standards, ethics, and a host of other measurable intangibles have to kick in to make "Make in India" a success. India does not lack in innovation or entrepreneurship - there are plenty of examples to substantiate it - right from our "Mission to Mars" to the several "Rags to Riches" heros. All we need to "Make ourselves in India" first and before you know it several Indian brands will be a household feature across the globe.

Times are a changing

My email; SMS; whatsapp; BBM and all form of messaging boxes have been inundated with hundreds of messages carrying best wishes and good tidings for Diwali and New Year. Honestly; apart from the few I really care about - the rest - mostly from marketing e-bots fed with big data about me will go directly to my trash box as they don't need any reply or acknowledgement.

It's only now that I have noticed that I haven't received a single card via the postal or courier service. Thankful I am, for a couple of reasons; - first, I don't have to open them physically to see who they are from; second, no waste of precious paper and printing ink; and third no guilt of responding back in kind. It always felt cheap to respond back to a physical card sender with some form of e-greetings or e-acknowledgement. From a thriving money making industry, conveying of greetings through creative, time consuming and expensive cards has become a virtually free and relatively effortless task. In this age of CCP (Cut Copy Paste) one does not even spend time looking for a great original creative piece of work - just take something cool received - edit it to make it look personal (if possible) and forward to your own mailing list or respond back with a template reply.

I cannot decide if it's good or bad. Thanks to technology I have mapped my friends' birthdays, anniversaries, and such important dates - even if they are incorrect based on data entered by the source. It's good to remember people even for a split second - but does that really translate to care? At times wishing someone on a social network results in acute irritation from the alerts when others too have greeted that person. Does it give us a high to receive greetings from tons of people - many who we don't even know?

I still hold on to a few physical greeting cards that touched me emotionally; but I don't recall holding on to or printing a single e-card sent to me. We now click and share more pictures and probably leave them forgotten on social sites. There are those days when I go through my physical picture albums, scrap books and cards - hardly ever through my cherished memories on any e-platform. Its either there in my mind or somewhere out there. Times are changing - but I do hope in this age of e-junk we are able to sift through and recognise the messages of real care and respond accordingly. May be even call for a conversation rather than send back words with one of the few billion emoticons.

Big Data Or Big Brother of 1984?

I saw a newsclip yesterday commenting on facebook messenger (FBM). What it suggested was that FBM can supposedly "study" you using the front camera while you use FBM on your phone. Yes, theoretically it can do that as the service agreement accepted by the user (you) allows FBM to essentially capture everything you do on your phone; including text messages, pictures, et all. Well you could switch out of FBM and move to Whatsapp. Hey! did FB not buy that too? Dig deeper and virtually every app on your phone has sought permission to access almost everything that is stored or exchanged on your smartphone. At one time it was amazing how an email sent with references to wanting a vacation somewhere would result in the manifestation of deals from airlines and hotels servicing that destination. We are no longer awed; but we are not scared either - at least not yet.

We should actually be freaking at this very moment knowing that venture capitalists are pouring billions of dollars in technology companies going after"Big Data".  Each year you are being better and better mapped, solicited and sold for money; and did you think your downloaded app was for free? There is a fine line between use and abuse of all the data collected and some of it is very personal information. In the wrong hands - devastating. Think of it; the next big thing are smart watches. Now you are strapped even tighter in the net; and more data about your physical self will get transferred to a collector. To what use? Well, I don't have to spell it out - do I? Now that the human population will almost voluntarily radio tag itself like cattle and walk around with VR glasses with super smart phones on their person; the possibilities of predicting, influencing and extracting behaviour become infinite. From economic reasons it will almost certainly gravitate to the need to control.

Mankind has never followed the advice given by Uncle Ben (Spiderman) "With great power comes greater responsibility" and has abused the instruments available in his hands to wrest control. It's not clear if in 2024 will it be a battle between nations or religious factions as we know them today or between "FBians" and "Googlies" or much smaller or larger followings that may form by then. But, I do know that as of today - my fundamental rights of privacy are being violated and I am to a large extent willingly allowing it to happen. Mr. Orwell, your 1984 has just about begun 3 decades later; and we are being watched by not one but several Big Brothers.

“If you want to keep a secret, you must also hide it from yourself.”

Read this and scare yourself even more:

The Hidden Secrets of Online Quizzes

http://www.pcworld.com/article/164527/online_quizzes.html

PPP - (Pakistan Politics and Ping)

This morning, my salute went out to a set of airline flyers in Pakistan as they had the courage of forcing the airline to offload two Very Very Irritating Politicians (aka VVIPs) who delayed their flight. It's time politicians around the world realize that they cannot harass the very people who elect them as their representatives. I wonder when will we in India will stand up to such nonsense.

Then there was another piece of news that cheered me a bit more. Our Minister of Civil Aviation Mr. G Raju instructed Air India to lower VIP protocol and pay attention to fare paying customers. Honestly, a sizeable percentage of Air India's losses would vanish if it functioned as a customer friendly rather than a ruler friendly airline.  The Minister has already made a few important but quite moves that has earned my respect. He does not make passengers wait. He checks in line ordinary passengers and even carries his own bags. He has initiated the Know Your Rights portal for passengers to tell them what to do when they feel that an airline is taking them for granted. So there is one more person in the Modi Cabinet (besides the PM) that I can look up to.

During the Congress rule, there was a list of 21 persons exempt from security search at all Indian airports. Numbers 1 - 20 were obvious; but number 21 baffled me. Robert Vadra. Not Priyanka, not Rahul but Robert. Even the CISF guys had no answer to this question. All they could say was "Desh Ka Damaad" (Son-in-law of the nation). Well No. 21 is off the list thankfully and really there should be no exemption list to begin with. What prevents  any one of those 20 persons from becoming a suicide bomber theoretically speaking? They conveniently subject themselves to search at all international airports; but back at home - it's a different matter.

While at arrival and departures; India welcomes President Xi JinPing of China today on what is also PM Modi's birthday. Our PM is looking more and more like a Venture Capitalist getting term sheet after term sheet of commitments signed to fund India's infrastructure appetite. After Japan's USD 30 billion; China is looking at committing  USD 100 billion. This is a very important statement coming from a nation that has been officially at "Cold war" with us since 1962. PM Modi's "Inch to Miles" strategy can be a game changer for the entire world taking away the traditional monopoly of the western nations moral policing the globe militarily and economically. But, one always questions the Chinese agenda. Is the money linked to resolving the land and water dispute between the two nations running over a territory of a 1000kms? Or is it the recognition of Tibet as a part of China that will allow our neighbour to recognize Arunachal as part of India. Too early to say but I hope it's time that "Hindi-Chini" became "Bhai Bhai" again (India- China brotherhood).

(LOL amazing that one news reader thought the Chinese President's name was Eleven JinPing (Xi JinPing) )

When the world is running down..

It's the 9/11 anniversary today and here's some news that caught my attention this week:

Missing train traced after 17 days in Bihar http://ibnlive.in.com/news/missing-train-traced-after-17-days-in-bihar/498280-3-232.html

This has to be a joke of some kind. And, its not even a train-jacking. The train driver decided in his own wisdom to do what he did and no one noticed. Wow!

Govt mulls removing slum dwellers near Mumbai airport on terror risks
Read more at: http://www.livemint.com/Politics/lzJay5DzcXMQVzUqHxmsSK/Govt-mulls-to-remove-slum-dwellers-near-Mumbai-airport-on-te.html?utm_source=copy

Mulls? what is mulls? This has to be the scariest international airport in the world when it comes to a potential terror assault. Unless all international airlines collectively decide to boycott this airport they are put the planes and passengers to risk. Successive Governments in the State allowed the slums around the airport to create their own vote banks. Slum lords collect tons of money from the shanties and these very slum lords report to one politician or the other. The real slumdog millionaires This mulling will continue unless the government's hand is forced quickly. Until then, do write out your will each time you decide to fly in or out of Mumbai airport. Hopefully once cleared the land will not become the source of another big scam. Or - has the scam already happened? Which brings me to the next headline:

Manmohan Singh knew of 2G scam as it unfolded, ex-CAG Vinod Rai says
http://timesofindia.indiatimes.com/India/Manmohan-Singh-knew-of-2G-scam-as-it-unfolded-ex-CAG-Vinod-Rai-says/articleshow/42298357.cms

Looks like our ex PM will pay for silence and inaction irrespective of his involvement as his knowledge of scams is as good as aiding and abetting.

Kashmir Floods: As Tempers Flare, Some Army Vehicles Pelted With Stones in Srinagar

http://www.ndtv.com/article/india/kashmir-floods-as-tempers-flare-some-army-vehicles-pelted-with-stones-in-srinagar-589617?curl=1410498712

A paradise called Kashmir is devastated. Probably worse is the fact that most people do not have any form of insurance because of being politically educated that they are not a part of India. In the past army atrocities have been made headline news. But, let's be fair, India as a Nation allows both good and bad news reach the people. In the last few days; it's this very army - so hated by the Kashmiris that has gone on a war footing rescue plan. Many soldiers have lost their lives saving the locals because for a soldier it does not matter if the person hates him or not; he has to do his duty. Cannot blame the people either - for they are angry at their own loss and are venting against that very system that is trying to help them. 

In Delhi; the Congress is annoyed with its own heavyweight members praising the PM on his fast and direct action in the Kashmir matter and the latest being that many seniors within the Party are supportive of the BJP forming a minority government in the State of Delhi. 

Well, the news from other parts of the world are not very happy ones either. The Scots are giving the English a storm in the tea cup; while the mid east is brewing in its own problem too being made worse by the US President making news of escalating its presence in the region to combat the IS regime. East Europe may be seeing signs of tensions easing but its still a fragile situation; 

The world is truly running down and when it is I remember a song by Sting which said:

When the world is running down
You make the best of what's still around

SMART SHITTIES

Wow! India has a plan to create a 100 new Smart Cities in the new future. I am not about to get into a debate on the wisdom behind creation of the same or the allocated budgets etc. In the first place -

What are smart cities?
There’s no simple definition for smart cities. The term encompasses a vision of an urban space that is ecologically friendly, technologically integrated and meticulously planned, with a particular reliance on the use of information technology to improve efficiency.
According to the Smart Cities Council, all the data that is collected from sensors – electricity, gas, water, traffic and other government analytics – is carefully compiled and integrated into a smart grid and then fed into computers that can focus on making the city as efficient as possible.


Great, but are there enough smart people to occupy them? Let's take a helicopter view of the existing Indian cities and what do we see:

1. Footpaths - meant for encroachment by street vendors and politicians. Cars and pedestrians have to use the same road along with cattle.

2. Public Toilets - first it is said there are not enough of them; but where there are, they are not used enough. Typical reasons - why pay a small fee when you can defecate on the streets for free. Or, the energy spent walking to one is greater than the energy being released so no point walking to one. Or, India is a democracy and one can do whatever one wants anywhere and if you try to stop me then be ready to hear "don't you know who I am?".

 In reality even civic minded people resist using one as they are ill maintained and stink. Not just the ones that are open to the common public but even those that have restricted access like the ones at airports, stations. Guess Indians by and large are not well potty trained - even those who have access to such facilities right in their very home. If you don't believe me, try using a loo in the aircraft flying within or out of India. Now these users surely are supposedly smart, educated and of means. Trust me, within 5 minutes of the seat belt sign going off the loos are unserviceable.

3. Street sanitation - In continuation to the above, it's just not about the shitty business but even disposal of trash. How many times have you seen the window of a fancy car going down and a bottle, tissue, can, or some piece of trash being disposed on the road? How many people clean up the crap their pets relieve on the roads? How many times have you seen a cop spitting out something foul (in addition to expletives) to paint the streets red despite them being the guardians of the city?

4. Road manners - Breaking traffic lights; changing lanes to gain a few miserable yards; speeding like it's a F1 race in Monaco; incessant honking when no one is even in front; jaywalking; walking (Driving) and talking (without paying attention to the road); the list can go on and on. It's reached a point where road rage has become a daily event. I am sure you must have witnessed an emergency vehicle trying to wade through traffic where they are denied right of way. (It's a different matter that the drivers misuse the power of the sirens and beacons - but in a true emergency lives can and are lost because of such insensitivities).

5. Utilities and safety - perennially dug up roads by some utility agency or the other (let's leave out badly made roads for the moment); lack of assured uninterrupted water and electricity despite the higher and higher utility charges; majority of police reduced to acting as private security guards for the privileged; lack of proper and working safety equipment to protect against emergencies in public buildings. Abuse of public transport - ticketless travel; defacing and destroying vehicles; theft of parts. I can go on.

So; the weakest link in the chain pursuing an efficient City are the people themselves. What's the point of smart cities where people decide to play dumb? Will we not then end up with Smart Shitties unless we change? I certainly hope we do change for the better as quality of life is not just measured by the creation of wealth but by the environment we live in.

Konichiwa Modi-san

Anata ga shushō Modisan to shite 100-nichi o kanryō omedetōgozaimasu.

Oops! sorry - the translation - "Congratulations on your completing 100 days as Prime Minister Mr. Modi". Well I got carried away with the new Indo-Japo bhai-bhai sentiment that the PM is expressing by talking, eating, dreaming, praying in Japanese. It will indeed be fab for India to attract Non US - Non Euro capital to it to build the Nation's infrastructure and upgrade its manufacturing base. It would be a win-win for Japan as well for a range of strategic reasons - economics being just one of them. 

Our ex brothers across the border (China - remember the Indo-Chini bhai bhai era?) are not too happy with this new brotherhood for a whole lot of strategic reasons and yes economics is just one little part of it. The PM will have to reassure the dragon that India has adopted Chinese food as its own just like half of China has taken to Bollywood style dancing. There is a lot riding on that relationship as well; and if there is realization that India makes a better brother than the one it has aligned with - better would it be for world security. 

So while all these international affairs are taking place, the mood at home is not that celebratory from the common Man's point of view. Food inflation is at its highest and that really hurts. The increase in GDP reduction in CAD and other such statistics fall apart when you talk to the man on the street trying to make ends meet to provide food on his table. On the other hand, those (a large minority) unaffected by food inflation are finding their investments inflated by the rising market do have a restrained smile on their faces. I guess the choice is hard; but the common man will have to wait. Creating an environment of investment stability and growth to attract money from across the globe will take precedence over many domestic issues. All the fires cannot be extinguished at once. 

It is quite noticeable that the PM is largely unnoticeable in the news when he is in the Country. It's good to let action speak for themselves and the PM is playing his cards like an experienced poker player. His trusted lieutenants are doing all the talking - some good - some bad; yet everyone can sense that its Modi talk that they can hear in the background. It is a one man show for now; and like proven by Indira Gandhi before - it works well in a nation like India. With the rain and oil Gods showering some of their grace on the PM; his next 100 days may offer a better report card - specially when India enters the phase of festivities - there will be real reasons for celebrating. 

Elephant dance and dead bodies.

Last evening I was invited by my bankers to hear three prominent persons (one American and two Indians) from the financial world on the state of the global and Indian economy to educate me on how to invest in times to come.

If I understood any of it correctly then we are all clones of Nero in a burning Rome. Very scary indeed. He is not the first person from the West saying that there is an economic cancer that is corroding the insides of the so called stable developed nations in the West. And yet; the growth centred money making emerging markets are perceived as "high Risk" by them. Worse, the emerging markets actually buy that story and invest in those perceived "safe havens" that are hiding not dirt but dead bodies under a carpet of pristine white. It's like putting money into a pool of no return when the actual strategy would be to invest and strengthen the economies of the emerging markets. I guess The BRICS bank is a first step in that direction and maybe creating a common trading (but not national) currency would be a long but necessary second step to wean away from the deadly dollar and erratic euro. The Unfortunate part is that politically and ideologically the BRICS are totally divided on the face of it, even though each of them has a common goal economically.

Well, I guess 5 is less than 30. Yes, I mean the number that exemplifies the Divided States of India. After 67 years of Independence we are still Maharashtrians, Gujaratis, Tamilians, Punjabis, and so on; but not Indians. I will not dive into this zone for now but Indians need to be Indians first to allow India to find itself as a rightful leader on the world stage.

Back to the subject; the talk of the elephant (India) waking up and breaking into a graceful dance of economic revival was taken up by the other two speakers. One; a US$ 30 billion fund manager and known to be an eternal optimist; the other not too far behind in money he manages but a confirmed conservative. Being equity gurus, the bias was very clear and I discounted much of it as marketing rather than market talk. But, what I could make out of what they both said is that India certainly needs to spend money on infrastructure if it wants to create more jobs and become a manufacturing base. It has a large population but much of it is unskilled and inefficient. It's also a land of low change high impact which means that a small economic swing positive or negative impacts overall growth drastically in monetary terms. And so, the elephant can dance; but it has to be watchful of all the dead bodies all around as they can rise up like ghouls and scare the shit of the elephant; in which case the dance will trample a whole lot more of what has been created.

So, what do simple folks like us do. Nothing much - just enjoy the party I suppose and pray that the ride on the elephant is not too jerky to throw up.

5 paise is more important than Rs 5 billion

I applaud the principle under the which the Delhi Transport Corporation dismissed the services of a bus conductor back in 1973. Supposedly shortchanging DTC by an amount of 5paise; not because he did it once but was a serial offender. The Court ordered the Conductor to pay back Rs. 1.42 to DTC as original shortchanged amount +  accumulated interest for 41 years. Yes that's the time it has taken to reach a conclusion. DTC's annual loss is Rs 10 billion; just to put the award amount in perspective.

I can draw 2 morals from the story. First, it does not matter how long it takes; but justice will be served and delivered. Second, if you are going to scam in India; better make sure its in billions cause the time it will take for the law to deliver justice may well be past the time you may have been granted by your creator on mother Earth.

Mad Cows, Mobiles, Video Games, Solar Flares and Supernature.

The thought of reading the newspaper each morning is getting more and more unappealing by the day. I think that the people on the 100 day happiness regime would have a happy day if they just stopped reading the unhappy headlines. There is really no news that would make one's morning a real "Good Morning".

I tried to think of the possible causes that is driving this insane behaviour from mankind. Could it be the food we are eating? Industrial poultry and cattle; if I can use that term, is being fed sawdust, poop (faeces), steroids; and other such wonderful things. Nature's intended vegetarians have been force fed non-veg fodder which at times includes remains of their own species. Is that why our brains have become like mush; full of shit; immune and insensitive to the point of sucking blood (figuratively) of our own species?  Well the vegetarians amongst us must feel safe; but with genetically modified food grown on chemical fertilizers and pesticides, insanity must be creeping in there as well. I am ready to go on a diet; but which one? Even water is not natural anymore. Food for thought; will anyone listen?

Listening; do we actually listen? We talk, and talk a lot. We want everyone to hear our words - be it vocal or written. To achieve this we have this wonderful machine called the mobile phone that not only conveys our voice but words too - never mind the grammar. I learnt that the best way to punish someone today is to take away that person's phone; trust me, that person will beg for forgiveness in under a minute. Is all this yottahertz of radio waves in our atmosphere overriding or short circuiting our own brainwaves to cause this irrational behaviour? Come to think of it, these lyrics come to my mind:

"Too much information running through my brain

Too much information driving me insane" 

Yes, these were sung by a band called the Police. 

Police reminds me of this game called "Grand Theft Auto" or GTA for short; the highest grossing game in the world. And what does one do in this game - steal, kill, shoot; basically be bad and be called the hero. There is a clear shift in morality where the hero is not necessarily the good guy - be it games or movies and is this fact shifting to real life? Is it shaping out violent and destructive individuals for whom "Breaking Bad" is good? There is a visible and increasing expression of rage for n number of reasons - be it inconvenience on road to being spurned by a lover. The most insignificant of an issue otherwise can cause a flash that can put a solar flare to shame. 

Aaah! maybe there is a scientific correlation there then. Could a phenomenon like a solar flare be responsible for the events happening here on mother earth? Or then it's Mother Nature's own way of fighting back for survival by inciting the most intelligent and destructive of its resident species annihilate itself? I can easily add a few more quack theories to explain the situation. But; in short, let's just say we are happily playing and plotting our own end. 

The theories above and I may sound a bit mad like Rev. Malthus - the proverbial prophet of doom. Maybe; but; is not what happening around us daily inexplicable madness? At least I, certainly cannot explain it.  

By the way - the song "Supernature" released back in 1977 had some pretty prophetic lyrics. 

Once upon a time science opened up the door
We would feed the hungry fields till they couldn't eat no more
But the potions that we made touched the creatures down below, oh
And they grew up in the way that we'd never seen before.

They were angry with the man 'cause he changed their way of life
And they take their sweet revenge, as they trample through the night
For a hundred miles or more you can hear the people cry
But there's nothin' you can do even God is on their side

How can I explain, things are different today
Darkness all around and nobody makes a sound
Such a sad affair, no one seems to care

Supernature, better watch out
Look at you now, better watch out
Look at you now, supernature

Better watch out, there's no way to stop it now
You can't escape, it's too late
Look what you've done, there's no place that you can run
The monster's made, we must pay

Maybe nature has a plan to control the ways of man
He must start from scratch again many battles he must win
Till he earns his place on earth like the other creatures do
Will there be a happy end, now that all depends on you

Read more: Cerrone - Supernature Lyrics | MetroLyrics