Saturday, 28 December 2013

Sambar to Samba: Karnataka minister go a long way

In January if you were to spot a group of dhoti-clad, middle-aged, potbellied, Ray Ban flashing men speaking in Kanada at the Iguazu Falls at the Brazil-Argentina border or at the Estádio do Maracanã in Rio de Janeiro make sure not to disturb them — they are the latest batch of MLAs from Karnataka who are on a ‘study tour’ to various South American destinations. These ‘crusaders’ have set out with the consecrate purpose to imbibe the best Latin America can offer and reproduce it in their respective taluks and panchayats back home in Karnataka. The state legislature’s committee on estimates is planning to send 30 of its MLAs to visit Argentina, Brazil, Peru among other places at a cost of around Rs. 7.5 lakh per MLA.
Such ‘study tours’ to exotic destinations are perhaps as old as the republic and are not unique to MLAs from Karnataka. Last month, the Goa deputy chief minister Francis D'Souza-led 38-member team visited Italy, Germany and Austria to study solid waste management. In 2012 the Kerala sports minister landed in soup when he and the sports secretary planned to enjoy the Olympics on the taxpayers money even when many athletes were not getting paid. What is surprising though is the gumption and alacrity with which public servants choose to go on such trips. Even as this batch of MLAs plans to go to Latin America a group is currently soaking the wonders Down Under. All this at a time when not less than 65 taluks in the state have been declared drought hit.
 The committee head and Congress MLA Mallikaiah V Guttedar justifies the trip by saying “don’t you send school children on vacation….similarly MPs and MLAs are being sent through the legislature committees.” Fellow MLA BC Patil shares Guttedar’s views: “Why shouldn’t we go on a junket? It’s our privilege as legislators” — and it is this false notion that it is the prerogative of a legislator to waste the taxpayer’s money that baffles the common man. The lack of concern shown by the legislators, including chief minister Siddaramaiah who thinks it is not a big issue, at a time when the state’s finances are in the red is alarming even by the low standards set by our leaders — considering this Nero at least played the fiddle.
Many state BJP leaders, perhaps after understanding the public mood, have decided to not go on the ‘study tour’. However the saffron party cannot claim the political moral high ground because when it was in power CM Jagadish Shettar had to recall his legislators who were touring Argentina and other countries. Thanks to an increasing presence of media and social network sites, coupled by a growing demand for transparency and accountability, the ‘you scratch my back and I’ll scratch yours’ arrangement by MLAs across the political divide will not sell anymore.
In this age of Internet where information is just a click away, it is foolish to justify such expensive trips. The MLAs should rather listen to the people who have elected them and search for solution in consultation with them and experts in the field. Expensive trips are not the answer. And this time the people might be gracious to forgive them even if they were to search for such information on their iPads in the assembly while a session is on.
(This appeared in Hindustan Times on December 28)

Tuesday, 3 December 2013

Bitcoin: Is India ready for the virtual currency boom?

With the advent of debit/credit cards and online trading it was said that currency notes would soon vanish from the markets. While this did not happen it made financial transactions much easier and quicker. This also ushered in a virtual and dark world of financial fraud. Governments and regulators have since been hard pressed in checking fraud and adapting to changes around the world. One challenging development in the online trading space is the growing popularity of virtual currency, and among the many it is Bitcoin that is jingling the loudest. Bitcoin is a decentralised digital currency which is an open source peer-to-peer electronic mode of payment. The risk with virtual currency increases when there is no authorised regulator for what is essentially a private enterprise. With an almost zero physical presence the fear is that this could be misused by fraudsters to lure gullible investors. Its virtual and unregulated nature makes it suitable for online gambling, illegal drugs, etc. While Bitcoin is relatively marginal in everyday real-time transactions, it is mainly used for speculative investments — in which the potential risk is exponentially high.
The Reserve Bank of India (RBI) is, and rightly so, concerned over the growing popularity of Bitcoin. As for now the RBI is adopting a wait-and-watch approach. But it is doubtful as to how long it can stay on the sidelines and observe the developments without intervening. This is mainly because of a sudden increase in the demand for the virtual currency. With many establishments in the United States, China and not to mention online sites accepting Bitcoin, pressure will increase for its transaction in India.
With the markets being volatile and gold — the preferred investment option in India — losing its sheen, Bitcoins are likely to draw the investors’ attention. Add to this the fact that its value has surged almost five times — from $207 a few months back to $1,000 (Rs 63,000). With millions of transactions daily the world over and a total circulation estimated around $1.5 billion, Bitcoin by its sheer volume demands that government financial regulators keenly watch it. This should be a top priority for the central bank and the finance ministry and proper checks and balances are essential to make sure that the Indian investor does not burn his fingers dabbling in this.