Moron the corruption issue

Following my previous post and comments and countercomments and discussions on twitter and facebook and google groups and various other forums, I’ve been thinking about this whole corruption thing. Random thoughts. The kind that comes to you when you’re traveling across the city by auto on a hot summer day, watching the world go by.

Ok so this is for the people who claim that the supporters of Anna Hazare are a large enough group that they probably represent “most of the people”. If this were the case, we have a simple solution to corruption – all these worthies can band together in the form of an “anti corruption party” (when was the last time we had a political party being formed on a solid ideology?) and contest the next elections. And if they can work hard, and ensure that they keep up the kind of efforts they’ve started, they’ll soon be ruling us. And hopefully they’ll continue with their zeal and be actually able to eradicate corruption. (on my end, I promise that if a credible party gets formed with an anti-corruption stand, I’ll get over my NED, get myself registered as a voter and vote for them).

But there are reasons to doubt something like this will happen. A look at the list of nominal supporters Anna Hazare got suggests that a lot of people were there just to be seen and get footage, rather than really wanting to weed out corruption. Again, given the political spectrum across which Hazare’s supporters last week came from, it might not be that easy an idea to form this “anti-corruption party” that I suggested.

Thinking about it further, there is a scary thought – that a large part of our population is actually pro-corruption. And looking at the political parties across the spectrum, it doesn’t sound implausible. So if a large number of people are actually pro-corruption, what are we to do?

Let me put it another way. How many people do you think are really anti-corruption? On all fronts? How many people do you think exist in India who haven’t paid or received a single bribe, however small that might be? Basically I want to estimate the number of people who are against corruption of all kinds, and my sense is that this number is likely to be small indeed.

I think one needs to think about this further before actually figuring out how to weed out corruption. From what I’ve read so far the Lok Pal bill simply adds one extra protective layer, and am not sure of its effectiveness. More about this in another post.

New York food recommendations

So I’m in New York for the next 2 weeks (6-18), and like last time want to do this sampling of high-quality cuisine from around the world. Meals are expense-able so cost isn’t so much of an issue, but given that I’ll be eating 13 dinners there I want to choose the places carefully.

Off the cuff, this is what I broadly want to eat. So plis to be recommending where to go:

high-quality thin crust pizza
pasta
hummus-falafel-…
mexican stuff – i’ll go to chipotle at least once for sure. any other places?
thai – something I missed out on on my last trip there.
ethiopian – considering I don’t get to eat this in India I want to eat this at least twice
french
Korean – I’m going to Hangawi once again for sure. Sheer awesomeness it is

Ok I’m sure there are other cuisines whose existence I’m not even aware of, so if you think there’s something I might like plis to be recommending. And if you live in NYC and want to meet for a meal, let me know. We’ll plan something.

And here is the list of places I went to during my last visit.

Update: I’ll be staying at the Hilton Millennium, next to the WTC site.

Medical Insurance Subsidy

Exactly a year back my mother was in hospital. She was there for three weeks before she died. The bill for the three weeks came to close to four hundred thousand rupees. She was covered under my corporate medical insurance so I passed on the cost to the insurer, who paid most of it. I didn’t really complain, the insurer was obliged to pay, and the hospital was more than happy to receive the fee.

The hospital follows an interesting business model. On one hand it dons the garb of a corporate hospital while on the other it is a charitable hospital. A large section of the patients are treated at extremely low cost, or even for free. The rest of the patients have insurance coverage. Those that have coverage are fleeced, and this money effectively cross-subsidizes the treatment of the poor. All works out well for the hospital. Except..

Do you realize that when you (or, in most cases, your employer) pay your premium for medical insurance you’re not insuring just yourself? That because of hospitals like I just mentioned, your insurance is also effectively paying for the treatment of a larger population? That the cost of treating some random patient in the hospital you were admitted to is paid for by you, as part of your medical insurance premium?

Changing tracks, I think the best thing about India’s healthcare industry is the diversity. You have government hospitals. There are university hospitals. There are large corporate hospitals you wouldn’t think of stepping into unless you had insurance. There are charitable hospitals which treat you for next to no cost. There are the neighbourhood nursing homes which essentially cater to the uninsured middle class. Reasonable facilities but not too expensive. And so forth.

There is no formal system of medical insurance in the country. There is no single large government system. If the current state of healthcare in the country is one of not having evolved much, I really wouldn’t mind it remaining this way. I hope we never get into the kind of equilibria that the US and the UK have gotten themselves into, which appear efficient but which ultimately prove expensive for people.

It is the diversity in the system that keeps the healthcare industry here competitive, and keeps costs low. And of course, you pay for other people too when you pay your medical insurance premium.

Successful IPOs

Check out this article in the Wall Street Journal. Read the headline. Does this sound right to you?

MakeMyTrip Opens Up 57% Post-IPO; May Be Year’s Best Deal

It doesn’t, to me. How in the world is the IPO successful if it has opened 57% higher in the first hour (it ended the first day 90% higher than the IPO price)? To rephrase, from whose point of view has the IPO been the “best deal”?

What this headline tells me is that makemytrip has been well and truly shafted. If the stock has nearly doubled on the first day, all it means is that MMYT raised just about half the cash from the IPO as it could have raised. If not anything else, the IPO has been a spectacular failure from the company’s point of view.

The US has a screwed up system for IPOs. Unlike in India where there is a 100% book-building process where there is effectively an auction to determine the IPO price (though within a band) in the US it is all the responsibility of the bank in charge of the IPO to distribute stock (as far as I understand). Which is why working in Equity Capital Markets groups in investment banks is so much more work there than it is here – you need to go around to potential investors hawking the stock and convincing them to invest, etc.

Now, the bank usually gets paid a percentage of the total money raised in the IPO so it is in their incentive to set the price as high as they can (and the fact that they are underwriting means they can’t get too greedy and set a price no one will buy at). Or so it is designed.

The problem arises because the firm that is IPOing is not the only client of the bank. Potential investors in the IPO are most likely to be clients of other divisions of the bank (say, sales and trading). By giving these investors a “good price” on the IPO (i.e. by setting the IPO price too low), the bank hopes to make up for the commission it loses by way of business that the investors give to other divisions of the bank. If most of the IPO buyers are clients of the bank’s sales and trading division (it’s almost always the case) then what all these clients together gain by a low IPO price far outweighs the bank’s lost commission.

It is probably because of this nexus that Google decided to not raise money in a conventional way but instead go through an auction (it made big news back then, but then that’s how things always happen in India so we have a reason to be proud). Unfortunately they were able to do it only because they are google and other companies have failed to successfully raise money by that process.

The nexus between investment banks and investors in IPOs remains and unless there are enough companies that want to do a Google, it won’t be a profitable option to IPO in the US. Which makes it even more intriguing that MMYT chose to raise funds in the US and not here in India.

The City Lacks Bars

Yeah you might think I’m crazy to be cribbing like this about Bangalore, supposed to be India’s pub city and all that jazz. But I stick to my statements. Yeah we might have lots of good pubs and lounges but we don’t have lots of good bars.

I was on my way to dinner at Fava at UB City this evening when I noticed the City Bar, and it struck me as to how few such bars there are in the city. Like places where you just go to the bar, get yourself a drink and literally hang around (around random small darshini-style tables) talking to people. I was reminded of my trips abroad, of places like London or New York which are so full of places like this one – where one just goes, buys a drink and hangs around.

My hypothesis of the shortage of such bars got some weight on our way out of Fava when we noticed how full the city bar was. It was like BTS bus 201 in peak hour – there wasn’t even any standing room!

Which makes me wonder why the culture of mid-to-high end standing bars hasn’t taken off in the city, especially considering our glorious tradition of darshinis and of standing bars at the lower segments (I hope you’ve noticed this – every “wine shop” literally doubles up as a standing bar, where people get stuff from the shop in a dirty glass, stand around and quickly gulp down. I must confess I’ve never drank at this kind of a bar).

Is it because the notion of a quick drink isn’t very well defined at the higher segments of our society? Is it because a “quick drink” is associated with the lower end of the spectrum and so the richer people don’t want to indulge in it? Could it be because of the exorbitant price of liquor licenses that makes it uneconomical to serve liquor cheaply enough to get enough crowds to sustain a standing bar? (most shady standing bars don’t have a bar licence; they run on wine shop licenses)

I must admit I’m a bit of a novice at this one (in terms of total quantity of alcohol consumed during my lifetime) but this really intrigues me. Why hasn’t the concept of higher end standing bars taken off in Bangalore? Has it taken off anywhere else in India at least? Again shady bars don’t count.

Immigrants

One thing I have noticed in Bangalore – and I’m not sure if it is true in other cities in India but I have a feeling that it is – is that immigrants inhabit parts of the city which natives wouldn’t really want to live in. I’m making this observation based primarily on one data point – Ejipura.

Till a couple of years back, the only reason I’d heard of this erstwhile slum is because houses there would get flooded every time it rained. Apart from that, it was a fairly nondescript part of Bangalore “somewhere close to the 201 route”, and generally considered an area to be avoided.

And now, slums have been replaced by swanky looking apartments and office buildings, where IT companies and people who work in them have set up tent. What was earlier an unlivable part of the city has suddenly become livable. The roads remain the same though. I don’t know if the houses still get flooded. There are open drains all around. And I have no clue how localities such as this get their water and sewerage supply.

Oh and there is massive dressing up of addresses. It is not Ejipura, it is Koramangala 6th block. Similarly, it is not Byrasandra, it is Jayanagar 1st Block East. And so forth.

I think what has happened is that when the city grew in the first fifty years of independence, farmland in the villages around the pete and cantonment areas was acquired and layouts were planned. The villages themselves were left alone by the BCC/BDA. And people who migrated to the city back then (let’s say at least 20 years back) applied for and got sites in one of these planned localities where they constructed their houses. And so I grew up in this house built on a BDA-allotted site, but up the road from my house was the old Kathriguppe village.

Now, what is happening is that these villages are selling out, to private parties. Knowing the value of the land all around the village (basically in the BDA areas) , people in these villagers have suddenly realized the value of the land that they are sitting on, and are selling to private builders, who either build apartments (most of the cases) or “revenue layouts” (rare). And given that these erstwhile villages haven’t traditionally been considered livable by people living in the city for a long time, they usually end up being occupied by recent immigrants.

Wasting Youth

Nowadays everyone seems to be preparing for JEE. It is almost as if it is a logical progression to join some JEE coaching factory once you are done with 10th standard. Yeah, the numbers were quite large in my time (~10 yrs back) itself. But they are humongous now, and it is not funny.

Yeah, awareness about IIT and people feeling good about themselves and wanting to go study at India’s best undergraduate institutions is great. It is brilliant. Fantastic. What is not so great, brilliant and fantastic is that tens of thousands of youth are wasting two years of their prime youth trying to mug for an entrance exam in which they stand little chance of doing well.

I just hope I’m not sounding condescending here, but it intrigues me that so many people who have very little chances of making it through the JEE slog so much for it. I think it is due toe the unhealthy equilibrium that has been reached with respect to the exam, which makes everyone waste so much time. Let me explain.

So over the years the JEE has got the reputation of being a “tough” exam. And over the years, maybe due to the way papers are structured or the way factories train people, people have figured out that hard work and extra hours of preparation helps. I could get into studsandfighters mode here but in line with my promise let me try and explain without invoking the framework. And you need to remember that the JEE uses “relative grading” – how well you have done is dependent on how badly others have done.

So if everyone has put in that much extra hard work, you are likely to lose out by not putting in that extra work. And so you increase your effort. And so does everyone else. Yeah this is a single iteration game but still looking at the competition and peer pressure eveyone is forced to raise their effort. Everyone is forced to, to quote the Director of my JEE factory, “work up to human limit”.

Yeah, a few hundred people every year manage to “crack” the system and get through without putting in that much effort. But then their numbers are small compared to the number of people who get admitted, so people who get through based on sheer hard work do tend to get noticed more, and spur other aspirants to work even harder. And so forth.

Yes, there is a problem with a system. Something is not right when a large proportion of youth in the country is wasting away two years of prime youth in preparing for some entrance exam. It is easy to see the fundamental problem – shortage of “really good quality” engineering colleges (I argue that this mad fight for IIT seats shows the gap between IITs and the next level of engineering colleges – at least in terms of public perception). But considering that as given I wonder what we could change. I wonder what we could do in order to save our youth.

As an aside, one thing I’ve noticed about several JEE aspirants is that they don’t give up. I don’t know if this is necessarily a good thing – to carry on with the mad fight even if you know that your chances of making it are remote. Yeah I’m sure there is peer pressure and status issues with respect to giving up. But then I suppose I would have a lot more respect for someone who would give up and enjoy life rather than continue the mad fight knowing fully well that his chances are remote.

Looking back, I do regret wasting those two years in mad JEE mugging. Ok I must admit I did have my share of fun back then but still looking back I would have definitely preferred to have not worked so hard back then. And of course I count myself lucky that I got through the JEE and my hard work in those two years wasn’t in vain.

The Switch

Cafe Coffee Day is among the most unromantic places to go on a first date, or so they say. But then you need to understand that the venue can do only so much when it comes to creating the right “atmosphere” for the date. So if you think you are yourselves capable enough of doing a good job of creating a good “atmosphere”, you don’t need to bother about trivialties such as how “romantic” a place is or how good it is in creating “atmosphere” and just pick a place that makes practical sense.

There has been so much of One Day International cricket of late that it is difficult to keep track of various series and tournaments. One tournament that similarly got lost, mostly because the ultimate result was unremarkable (Australia won yet again) was the Champions Trophy, which happened (I think) in South Africa. I don’t remember much of the tournament; I don’t think I watched much of it. All I remember was that there was a game where India played Australia, and that Australia batted first.

Seating arrangement plays an important factor on a first date. Optimal seating arrangement ensures the optimal arrangement of eye contact. Sitting beside each other means you need to put too much effort to establish eye contact, and that is way too much energy. Sitting opposite each other can lead to overexposure – if things aren’t going that well, it’s tough to keep looking into each other’s eyes and that can lead ot awkward moments. It might be interesting to do some academic research in this matter but my hunch is that for a first date a ninety-degree seating arrangement is optimal.

For a few months now I have been on a diet. It has not been without results – my weight has come down by almost a fourth in the last six months. I haven’t done anything drastic, just a set of simple principles. And one of them is “no sugar in coffee”. I’ve given up on tea altogether since I can’t have it without sugar. When you are on a date, however, it is not nice to show off that you are on a diet, especially if you are a guy. it doesn’t give a good picture. So a good strategy is to order something like espresso, which you can claim tastes best without sugar!

I think it was an appeal for LBW that triggered it, but I’m not sure. I do remember, however, that it was a strong appeal that was turned down, but I don’t remember the nature of dismissal. Ashish Nehra was bowling if I’m not wrong. I have no clue who was batting. Maybe it was Haddin, or was it Paine who was opening in that tournament? Not that it matters.

Onlookers might have thought that the move was choreographed given how well we executed it. I don’t even remember their being too much eye contact as it happened. I don’t remember there being any conversation about it as it happened. All I remember is that one moment I was being distracted by Ashish Nehra’s appeal, and the next I was sitting with my back to the TV, comfortably settled where she had been settled a moment earlier, with her having taken my original place.

And I remember that our coffees had also exchanged places along with us!

Loos in India

Ok so this took a real long time coming. It might have been up to five years since I first thought of this post, but so far have never gotten down to writing it. The normal disgust warnings apply. So if you are either eating or have just eaten or feel remotely like throwing up, I request you to read no further. In this post, I want to talk about the culture of shitting (yeah I’ll use the shit word. Direct and disgusting it is) in India and effects of that on current culture and morality.

Before you read further, I would urge you to read about the Aryan Code of Toilets (1500 BC). Thanks to Amit Varma for the pointer. Quoting:

Before going for defecation it was prescribed that the sacred thread should be rolled to a smaller size and be put on the right ear.

The head was to be covered with a cloth. In the absence of cloth, the sacred thread was to be brought over the head and was to be hung on the left ear.

Then while observing silence and facing north in the day and south in the night one could defecate.

So one of my questions is now answered of course. I hope you read the article, it explains a lot more. So from this article it is clear that according to the great Indian tradition, shitting is a ritual no less. And though this document doesn’t mention it, it is generally understood that you shit once, early in the morning after you wake up. Shitting more often or at irregular times is a sign of illness or indiscipline.

My hypothesis is that it is because of this “custom” or “cultural aspect” that we don’t have good public loos in India. Since shitting at irregular times is looked down upon, it wasn’t considered a good idea to encourage this “indisciplined” practice by providing good public loos. Ok it may not have been on purpose but since shitting at non-regular times (not early in the morning) wasn’t a done thing no one really talked about it and the results (abysmal public toilet infrastructure) are here to stay. It is only in modern offices where indisciplined foreignerrs visit regularly that you have good public loos!

Then, in India, there was a major lag between urbanization and development of public sewerage system because of which loos had to be placed away from the rest of the house. Soon this became a practice, and this further discouraged people from “going” at irregular times. And the delay in arrival of water closets and public sewerage kept the class of people called “night soil collectors” in business much longer than it needed to and this prolonged the incidence of untouchability (this is supposed to have been beautifully captured in Mulk Raj Anand’s The Untouchable).

The other impact of shitting being a ritual is that it is not a done thing to go to the loo in other people’s houses. Some people plain get offended if you ask them if you can use their loo, and consequently it is a bit embarrassing for guests here to enquire if they can use the loo. Thankfully there have been no Tycho Brahes in India (wasn’t he the guy that died of a bladder burst because he thought it would be impolite to the queen if he excused himself? ), or if there have been they haven’t been reported thus!

An unrelated (to the rest of the post) thought – steel and quality cement and elevators are all fine, but don’t you think one of the most important pre-requisites for the building of skyscrapers was the water closet? Just think about it.

Before going for defecation it was prescribed that the sacred thread should be rolled to a smaller size and be put on the right ear.

The head was to be covered with a cloth. In the absence of cloth, the sacred thread was to be brought over the head and was to be hung on the left ear.

Then while observing silence and facing north in the day and south in the night one could defecate.

Compensating Teachers

This is yet another of those things which I’ve been thinking about and have been intending to write about for a long time but have never gotten down to it. Pinky wrote this excellent post on the topic today and that has got me thinking. To quote her,

A bad teacher makes a bad student. A teacher who looks at teaching as just another job is doing no good to anyone. She neither grows in her life nor contributes to the positive growth of a kid.There have been a few teachers in my life who i have tremendous respect for, not because they taught me effectively enough to pass in their subjects but because they taught me to listen, think and speak!

I don’t have any solutions yet but I thought I should just put some bullet points here, just to try and give a structure to the problem. Let me know your thoughts

If we consider a person’s salary as Society’s recognition of his/her worth, school teachers are not recognized enough
Abysmal salaries drive away a large number of potential school teachers away from the profession
Love for teaching is important, but if teaching pays as abysmally as it currently does, the opportunity cost of doing what you love is way too high for some people, and so they end up in other professions
We have a market failure in teaching – how do we run a school profitably while paying teachers competently while on the other hand keeping fees reasonable, and not resorting to any subsidies?
India suffers from what I call the “official’s wife bug”. In the 60s and 70s, the teaching profession got flooded by women who weren’t really looking to make much money, but more to just pass some time and use their bachelor’s degrees rather than being housewives. This has fostered a culture of low schoolteachers’ salaries in India. People who weren’t looking to make money out of teaching crowded out those who found the opportunity cost of the low salaries in teaching too high.
McKinsey interview level arithmetic: assume a school having classes 1 to 12, 4 sections per class, 40 students per section. 8 periods a day 5 days a week gives a total of 12 * 4 * 8 * 5 = 1920 periods per week. Assuming each teacher can take 5 classes a day (or 25 a week) we will need 77 (round it off to 80) teachers. Number of students is 12 * 4 * 40 = 1920, so essentially 25 students have to pay for one teacher’s salary, and this is apart from expenses towards school building, maintenance, overheads, etc. McKinsey level handwaving. 10 students have to pay for one teacher’s salary. Doesn’t sound feasible
Primary and secondary education is simply way too important to be left in the hands of unmotivated disinterested people, but that seems like the situation we are in (I dont’ mean to say all teachers are unmotivated or disinterested; just that the situation doesn’t incentivize talented motivated people to enter the profession).
Universities attract talent by allowing faculty to make money by other means such as consulting and organizing for-profit courses. Will something like that work for schools? And no, I’m not talking about private tuitinos as the other source of income. Is there something else?
Government intervention is not a solution. In a place like India it will only end up messing up things further and draining more money from the system.
In the pre-IT era, teaching salaries were more competitive (with respect to competing jobs) than they are now, so they could attract better talent
I wonder if it is only in India that such a large proportion of school teachers are women. This is just a general pertinent observation, and has nothing to do with the rest of the post
The officer’s wife model was good when it started off – some motivated people came into the system because fo that. Just that the system is not sustainable and we’re facing the problems of that now and because a lot of school managements fail to take into account that the model isn’t sustainable

Any thoughts on this? Any possible solutions? Of course it’s not possible to implement any macro-level solution. All I’m looking at is a school-level solution. How do you plan to run one school (of size I mentioned in my bullets) sustainably while ensuring teachers are paid adequately enough to not scare away interested people?