The band aid falls off - The Honest Truth By Ajit Dayal
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Investing in India - Honest Truth by Ajit Dayal
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20 JULY 2013


There are many lessons to be learnt from the recent economic and social events in India.

And here are some of them:

  • Speeches by Finance Ministers should not be mistaken as reforms. They should be considered as merely band aids and other "feel good" factors created as a "quick fix".

  • A "quick fix" is not a reform. It is a movement in nothingness and does not solve a problem. In fact, by not addressing the problem in time, the solution gets more complex and more difficult.

  • Finance Minsters should never try to pressurise the Reserve Bank of India into cutting interest rates to "kick start" the economy. Because, when a wrong solution is applied to a real problem you get a whiplash: the RBI was the reluctant bride and had to rightfully flee this arrangement of lower interest rates to defend the Indian rupee by effectively raising interest rates this past week.

  • Every PSU company will be slowly poisoned and killed. And their business will be given to a few favoured private sector families.

  • You can never eliminate the greedy industrial family groups: they probably know too much about the politicians and the bureaucrats. Our only hope is that god saves us from their greed.

  • The free market thinkers want the markets to find their own level. The problem is that there is no free market with any long term, rational thinking. The "free market", globally, is 99% speculative. One should not confuse the theoretical text books with the challenge of building an economy based on what speculators think the price of any commodity (the Rupee, interest rates, oil) is on any given second.

  • The economy does not need to be rekindled by letting loose "animal spirits" as suggested by the Prime Minister, who was once a respected economist and once a RBI Governor, but nowadays a man with a puppet wave and a plastic smile. The economy needs to be rekindled by arresting the corrupt and the fixers and allowing smaller businesses to flourish.

  • Indian business houses will never bother to export. When doing business in India is as easy as pressing a remote control to pay money to buy a generation of profits, why would the Indian business groups wish to compete in the global market place?

  • A callous government breeds a callous society: women will be raped, children will be served poisoned food, and the tribal will be stripped off their land and their pride.

  • Or should point 9 be reversed? A callous society begets a callous government. We, as a people, are so soulless and so inhuman that we have the government which is a reflection of who we are.

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Disclaimer: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd. The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author, Equitymaster, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site. To write to Ajit, please click here.


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17 Responses to "The band aid falls off"

G Darad

Aug 8, 2013

The list is a bit shorter; it's in fact, 999 points longer! However, the reversed point 9 is the mother of all issues, and wait! the adjective 'callous' needs to be replaced with 'crooked'

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Rajendran. T

Aug 7, 2013

You are right. Point 9 should be reversed. A callous society begets a callous government. Our government is a reflection of us.You have the courage to say things straight.

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anilksingh

Jul 26, 2013

Hats off.You have put things as they are.You have the courage to say things the way they are.
The greedy and corrupt do not realise it is in their own long term self interest to ensure fair distribution of opportunities.

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Rana Mansingh

Jul 26, 2013

Thank you for a straight forward and honest opinion.

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D.Ganesh Raja

Jul 23, 2013

Rightly said and something which has been brewing in my mind for a long time. Barring exceptions, in India doing business in India are those same industrial groups having their finger in the pie of everything. Does anyone really call this entrepreneurship? I don't think so, it is more of nepotism.

Like 

Anil

Jul 23, 2013

Ajit, i can understand the tenth point/commandment. Its getting MAD, MAD with self too...ohhhh!! not a good place to be in. I understand.

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sandipta patel

Jul 22, 2013

I fully agree with the views of Mr. Sachin Salunkhe. We are a callous society. Collective duty is nobody's dity. We only expect that the others will do it. We forget / ignore to raise ourselves to the occasion.

Further your comment"arrest the corrupt and the fixers" needs serious action, repeat "action", not mere thinking. This is the root problem in all good intentions.

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kaiser

Jul 22, 2013

True picture of our India today..... Hope something changes soon....

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RC

Jul 22, 2013

completely agree with your comment in para 10. What can WE DO TO CHANGE IT?

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N.M.R.Shreedhar

Jul 22, 2013

As usual, Mr.Ajit has done it again--bang on target !! Perhaps one way to improve is to make all transactions on-line and transparent --then the person who applies for a passport/gas connection/licence or whatever,can see at all times what is the status of his application and where it is stuck. Surely with our prowess in IT, we should be able to do this-- may eliminate corruption to a large extent. regds

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