imjingjing

Yeah Yeah, I am that sort of a nerd. While much of India is agog with the spot fixing scandal that broke yesterday, this blogger ruminates on the economics of it. Yes, he is a weirdo ! Having got that out of the way, a few words on the scandal, for the 3 million non Indian readers this blog gets :)  There is a nonsensical game (anybody who suggests the word cricket in this connection will be personally bashed up by me) in which there is a cash machine called the Indian Premier League. Yesterday three players were caught, allegedly  hand in glove with bookies, manipulating results. That's all you really need to know. What is baffling me is the economics of it. There are all sorts of reports, but I think it is safe to say that at least Rs 20 lakhs (some $40,000) was allegedly paid to the players to give away a minimum number of runs in an over. Let us say, for this to be profitable to the crooks who are betting on it, they must wager at least an equivalent amount at odds of say ...

The law is an ass. Governments are a bigger ass. Ramamritham is the chief ass. But even by those standards this takes the cake. Those familiar with India knows that this poor country indulges in wasteful expenditure of the worst sort. Free colour TVs, grinders, etc have made the news. But the criminal, inexcusable and worst sort of government waste is the subsidy on Liquefied Petroleum Gas (LPG). If there was a word stronger than criminal, I would use it. LPG  is supplied to all and sundry at a subsidy. It is sold at roughly half the cost - the government is supposed to pay the balance half to the oil companies , but it does so as and when it feels like it, or not at all. It is actually quite difficult to estimate how much the total subsidy is as the government hides this in different pockets but my estimate is that this monstrosity costs us some Rs 30,000 crores. The really poor don't use any cooking fuel at all - maybe firewood. The poor use kerosene. Only the relatively rich use...

What is man's greatest weakness. No, its not sex. No, its not even gambling.  It is his uncanny ability to fall for every "get rich quick" scheme. Take the case of the collapse of the Saradha   (and probably numerous other such schemes) in West Bengal. This was a classic Ponzi scheme. Investors were attracted by fantastic returns (15-50% !!!). The early investors were paid off with money collected from subsequent idiots. Bingo. An avalanche started. Two years on, it has collapsed leading to much hand wringing and vociferous shouts of indignation. What attracted my attention was not the scheme per se. They are dime a dozen. Remember the Emu farm scheme a little while ago in Tamil Nadu. Emu farming I believe - never mind that not one soul who put money into it had seen an emu in his life. But what has really got my attention is the response to the affair after it broke news. There has been much clamour for regulation of such funds and criticism of governments for not regula...

Infosys was , is , and will be a great company. Unarguably. But even great organisations suffer from malaise. Surprisingly, Infosys suffers from the malaise that you would not normally attribute to it - the Lala problem. Yes, I know, I am throwing mud at a great company, but you have to expect it if you lose 20% of your market value in one day. Wait a minute. Isn't Infosys one of the most professional of companies ? A company that sets the standard for corporate governance. The company that raised the bar on ethical business. The company with the middle class values ? All true. But Infosys suffers from the same problem that family run companies have - the company is handed down from one  "family" man to another. Only in Infosys' case, the "family" is not blood related, but the group of founders who set up Infosys. The peerless Narayana Murthy established it. The relentless Nandan Nilekani drove it to the status of a world leader. Kris Gopalakrishnan then too...

My state is coming into election time. The politics of it - who will win; who will lose, etc is beyond the purview of this blog. But this blog will certainly muse on the economics behind it. I am foxed as to why anybody wants to stand for any election - for the economics behind this is akin to a Las Vegas casino. On a conservative estimate, each candidate would spend about Rs 15 crores in each assembly seat ( see this speech as evidence of such numbers). More than three quarters of it is not for campaigning, but to bribe the voters (shame on you and me). Traditionally it used to be just cash and liquor.  But apparently now even water drums, watches, sarees and T shirts feature, as evidenced by this photograph and this article from The Hindu today. The number of assembly constituencies in Karnataka is 224. There are four political formations in the fray. So that makes for 900 serious candidates. At Rs 15 crores per candidate, that amounts to an expenditure of Rs 13,500 crores ....