India Wimping - The Honest Truth By Ajit Dayal
Investing in India - Honest Truth by Ajit Dayal
India Wimping A  A  A
23 FEBRUARY 2009

Wimp: (noun) a weak, cowardly, or ineffectual person (Merriam Webster)

We have had India Shining; Resurgent India; and India Incredible. And we were the "I" in the greatest growth story in economic history that this generation was all set to witness. India is the world’s largest democracy and the "I" within the "BRIC" area that comprised of Brazil, Russia, India, and China.

-------------------------- Don't Miss --------------------------
Revealed! The most profitable approach to stock picking
Get This Guide Today... It's FREE! Click here


But that was when semi-nude women graced the front pages of the financial newspapers. And the now-naked CEOs and financial geniuses flashed their power and wealth on the TV channels. And the leaders of India went around the world staking their rightful claim in the New World Order.

But this is now. Welcome to the New India, where a billion heart beats are beating so faintly that the patient is reported as dead on arrival by a confused media.

The living wimp
But India is not dead. It is Wimping. (Truthfully, there is no word like "wimping" but we are unique, and we always need to be treated differently. So let’s make up a word for our behaviour.) India is alive but with serious problems. For all its largeness and all its greatness, we are ruled by wimps and cowards.

After we had the terrorist attacks on Bombay, India thumped the table demanding more action from Pakistan - or else. We are still waiting for that "or else". Meanwhile, the people of Bombay (and India) continue to give their bribes and weaken the rule of law. We are too scared to change the system in which we operate. The "or else" would entail not only a military strike against terrorist camps but also a strike against corruption. And many powerful businesses rely on corruption to fatten their pockets.

In Mangalore, carriers of the Hindutva flag beat up women sitting in a pub. That may be action - but it is the action of a frustrated wimp. Unable to rationalise and explain their irrational stance on why women cannot drink but men can, the hooligans used their fists. The Hindutva brigade needs to cleanse a lot of history books if they don’t believe in the power of women to make choices.

Meanwhile, the policy makers talk about "bold" steps and forceful action to kick-start the economy. And they give us a stimulus package -and top it with another to show how serious they are. How serious? The US rescue package is 7% of their GDP - our stimulus package is 1% of GDP. China had announced its rescue package of 9% of its GDP. In fact the Indian package is the equivalent of pitting a new born baby to push over a 250 kilo sumo wrestler. You won’t even get a tickle.

It has been 7 weeks since Raju’s confession letter and 10 weeks since the aborted merger of Maytas and, for all the investigating agencies investigating, Satyam remains an enigma. No one is answering the obvious question: which politicians were involved in transactions with the family? And which company listed on the Indian stock exchanges could be a larger scam? In private, employees of Satyam can tell you names of politicians close to the Raju family. The investigating agencies seem lost. And why should they be eager? Their bosses may be cautioning them against getting too close to the truth. Because behind that will be the rotten smell of corruption.

The most recent wagging finger came when the H-1 visa program was under threat from the Obama rescue package. Companies availing of the US government money cannot hire H-1 visa holders. That is discrimination, said the Indian government, we will fight it. (It is another matter that we have our own discrimination in India: seats are reserved for students based on caste, creed, and religion. If you take any government money for education, you need to follow the government guidelines on how you select your students.) But we object to this H-1 visa restriction said the government. Fingers will wag; tongues will get their daily exercise. But, nothing will come of it. The US will do what it wants, and we will be left with some "or else" hanging around our necks.

UBS blows a hole
So if the Indian wimp really wants to flex its muscles, here is another opportunity. The US government had filed a criminal charge against Swiss banking giant UBS and got UBS to disclose the names of 250 wealthy individuals charged with committing tax fraud in the USA. In addition, the US imposed a USD 780 million fine against UBS. That was on Wednesday, February 18th. One day later the US promptly filed a civil suit against UBS asking for 52,000 names allegedly with USD 14.8 billion of undeclared cash.

The Swiss are upset. The banking secrecy laws are a national treasure. And UBS has blown a hole by succumbing to pressure from the US. Over the next few days the Germans, Italians, and French are all expected to stand in line to get their lists. The Germans have already been fighting with the Swiss banks to confirm names they have bought from an ex-employee in the software division of a bank. The US win will strengthen their hand.

So where is the Indian request for a list of bank accounts held illegally in UBS by Indians living in India? Will the Indian strong man stand up and get results? Or will the Indian Wimp wave his finger and wag his tongue -and do nothing?

My bet is on the Indian Wimp. We have seen how the P-Note money has been treated with velvet gloves. There are brokers and investors who have forced the government into accepting money from unknown sources. This banking list is probably more dangerous because politicians and friends of politicians across party lines have some money stashed in illegal Swiss bank accounts.

Send this simple request to your local MP: "Please raise the question in Parliament to support a motion that the Indian government must get a list of all bank accounts held by Indian passport holders. And if the Swiss government does not agree, then close down all operations of the Swiss banks and brokers in India."

What do you think your MP will do? Will he raise that question and support the motion? Watch the India Wimp in action.

Note: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt Ltd and Quantum Asset Management Company Pvt Ltd.. Views expressed in this article are entirely those of the author and may not be regarded as views of the Quantum Mutual Fund or Quantum Asset Management Company Private Limited.

Read our Privacy Policy and Terms Of Use.
Get The Honest Truth directly
in your mail box.
Just enter your e-mail address» 

Read our Privacy Policy and Terms Of Use.

Equitymaster requests your view! Post a comment on "India Wimping". Click here!