Rural India Growing

The rural India no longer needs to migrate to the cities to gain employment. New sectors like telecom, microfinance, rural BPOs, etc. are providing them with lucrative opportunities in their own home towns. In earlier days big cities like Delhi and Mumbai were the hot destinations for the youths of the rural world, especially for the educated ones. However, very few of them did well. Higher cost of living ate into their incomes leading to lower standards of living and almost negligible savings.

With the new wave of rural BPOs and micro financing, companies in these sectors are now actively seeking people in the smaller towns. Even telecom companies are providing opportunities to the rural community in the form of managing and maintaining their numerous telecom towers. If this continues, then soon the migration from rural to urban India would stop. And the economic divide between the two would start to even out.

India is Growing... (in Corruption Index)

The past few days have not been good for a firm believer in the India growth story. Three instances of large scale corruption have come to light and that too, at about the same time. Already, Transparency International, the international watchdog for corruption has downgraded India in its corruption rankings. And going by the turn of events, it will not be surprising to see India slip further. However, are the country's politicians doing something about it?

Very little we believe! Their hands seemed to be tied by political compulsions. And in cases where they have taken action, the punishment has not been very severe to say the least. On the contrary, the ruling party is hell bent on undertaking a massive expansion in the welfare program, an activity that is notorious for its corruption levels.

India Inc. on the other hand seems to be emboldened by the recent admission by Ratan Tata that his conscience didn't allow him to bribe a minister in order to enter an industry. Others too have come out in the open and have admitted that corruption is indeed a part of the cost structure of doing business. As most of them point out and also does the Wall Street Journal, the creation of a truly independent and empowered anti-corruption agency may help stem the rot. But what remains to be seen is whether there will be any inclination at all towards establishing the same.

'High' and 'Assured' Returns!

It is fundamentally impossible for investments that offer very high upsides to have assured returns. However, this proposal is often used to lure unsuspecting investors. And ignorant investors fall prey to such shallow promises.

The latest testimony to this is the fate of the assured return schemes offered by India's largest insurance company LIC back in the 1980s and 90s. As per reports the extent of losses in three schemes offered by LIC has the potential to bring back memories of the UTI scam of 2001. Promising fixed returns of around 11 to 12%, these plans are currently running a deficit of Rs 140 bn! The invested money is from 1.3 m investors. Hence, there is little doubt that the insurer's inability to deliver returns could dislodge investor confidence once again.

Agreed that the notional losses could be attributed to trends in economy, interest rates, inflation and the like. Further, the outcome may not be as detrimental. This is because LIC seems to have enough liquidity at its disposal to tide over the crisis. But the economic factors are bound to have an impact on investments. And in no way can issuers of the instruments or investors undermine them. Hence it is most imperative for investors to recognize and be warned of the risks to the promised returns.

Investments in stocks at attractive valuations or in mutual funds through the SIP route can offer you some degree of safety. It could also enhance the likelihood of generating supernormal returns in the long run. However, there can never be any 'certainty' to the returns. And thus the promises to deliver assured returns need to be taken with a pinch of salt.

India is Shining!

China may have become the world's second largest economy. But when it comes to growth, India is expected to have an edge over its Chinese rival. The World Bank has revised China's growth forecast for 2011 to 8.5%, a shade below its estimate of 8.6% for India.

 If the bank's predictions come true, India will, for the first time, become the fastest-growing among large economies. China has been seeing a slowdown in growth off late. Exports are still struggling to recover given the subdued economic conditions in the US and Europe. Inflation is high and the dragon nation has been facing continuous pressure to let its currency appreciate. Thus, weak global growth and fading impact of the stimulus package is what makes the World Bank opine that growth will slow to 8.5% in 2011.

Thus, even though India has its own set of problems, it is still boasted to topple China when it comes to pace of growth. Whether that happens sooner than later remains to be seen.

Cellphones and Health

Recent studies have tied cellphone use to rises in brain damage, cheek cancer and malfunctioning sperm.

Many new cellphones now come with the small-print warning that they are to be kept at least one-inch from the ear (presumably for safety reasons). Most troubling of all, research has shown that children and teenagers are particularly susceptible to cellphone radiation, thus raising questions about its effects on coming generations.

So be on the safer side:

    * Use texting instead of voice calling.
    * Use an earpiece if you must voice call.
    * Keep your cell phone at least an inch away from your body at all times while it’s on.

Authority-centric Business

In an economy dominated by corporations, most people spend their work lives in hierarchical settings in which they have no chance to participate in the decisions that most affect their lives. The typical business structure is, in fact, authoritarian -- owners and managers give orders, and workers follow them. Those in charge would like us to believe that’s the only way to organize an economy, but the cooperative movement has a different vision.

Cooperative businesses that are owned and operated by workers offer an exciting alternative to the top-down organization of most businesses. In a time of crisis, when we desperately need new ways of thinking about how to organize our economic activity, cooperatives deserve more attention.

First, the many successful cooperatives remind us that we ordinary people are quite capable of running our own lives. Cooperatives prove that wrong, not only by producing goods and services but by enriching the lives of the workers through a commitment to shared decision-making and responsibility.

Second, cooperatives think not only about profits but about the health of the community and natural world; they’re more socially and ecologically responsible. This is reflected in cooperatives’ concern for the “triple bottom line” - not only profits, but people and the planet.

 The U.S. government’s response to the financial meltdown has included some disastrous decisions (bailing out banks to protect wealthy shareholders instead of nationalizing banks to protect ordinary people) and some policies that have helped but are inadequate (the stimulus program). But the underlying problem is that policymakers assume that there is no alternative to a corporate-dominated system, leading to “solutions” that leave us stuck with failed business-as-usual approaches.

Politicians who talk about an “ownership society” typically promote individual ownership of a tiny sliver of an economy still dominated by authoritarian corporate giants. An ownership society defined by cooperative institutions would be a game-changer.

Cooperative businesses aren’t a magical solution to the critical economic problems we face, but a national economic policy that used fiscal and tax policies to support cooperatives would be an important step on a different path.