The biometric technology vendors have admittedly built their coalition to outwit progressive movements as part of their divide and succeed strategy wherein organisations of both left and right hues have been persuaded to act like their mouth pieces or maintain studied silence
Endorsing Supreme Court’s order, the Parliamentary Standing Committee (PSC) on Finance in its most recent report has asked Government of India to issue instructions to state governments and to all other authorities that 12-digit biometric unique identification (UID)/Aadhaar number should not be made mandatory for any purpose.
The Seventy Seventh Report of the 31-member Parliamentary Standing Committee (PSC) on Finance reads, “Considering that in the absence of legislation, Unique Identification Authority of India (UIDAI) is functioning without any legal basis, the Committee insisted the Government to address the various shortcomings/issues pointed out in their earlier report on 'National Identification Authority of India Bill 2010' and bring forth a fresh legislation.” It was presented to the Speaker on 18 October 2013 upon authorisation by the PSC by Yashwant Sinha, the Chairman of the PSC.
PSC report’s categorical recommendation reads, “The Committee would like to be apprised of the details in this regard particularly in the light of recent judgement of the Supreme Court mentioning that no person should suffer for not possessing the Aadhaar card. The Government must in the meantime issue instructions to State Governments and to all other authorities that it should not be made mandatory for any purpose.”
This was ahead of the resolution passed by West Bengal Assembly on 2 December 2013 against Aadhaar related program. Legislators in the Assembly referred to the PSC report of January 2011 trashing Aadhaar. More and more state assemblies are expected to do the same. Meanwhile, Madhya Pradesh High Court has listed a case against Aadhaar on 15 January 2014 for hearing. In a related development the case against the illegal 12-digit biometric Unique Identification (UID)/Aadhaar number is now scheduled to be heard on 7 January 2014 in the Supreme Court. High Courts of Punjab & Haryana and Andhra Pradesh have already raised questions about its legality. Most opposition parties other than new ones like Aam Aadmi Party (AAP) have taken a position on this issue regarding mankind’s biggest biometric database. The Bengali and English text of the resolution passed by West Bengal Assembly is attached.
This Seventy Seventh Report of PCS deals with the action taken by Government on the recommendations contained in the Sixty Ninth Report of the Committee (Fifteenth Lok Sabha) that was presented to Lok Sabha and laid in Rajya Sabha on 22 April, 2013. The PSC report concludes, “Committee has time and again insisted the Government to address the various shortcomings/issues pointed out in their earlier Reports and bring forth a fresh legislation on UIDAI.” Notably, 'National Identification Authority of India Bill, 2013 is listed for introduction after generating “more than 44 crore Aadhaar.”
PSC report disapproves of the grievance redressal mechanism of the UIDAI. “The Committee is dissatisfied to note that the action taken reply is elusive on the number and nature of complaints received regarding issue of Aadhaar Cards.”
Irregularities committed by the illegal UIDAI has been dealt with from page no. 11 to 14 of this Report of the 31-member Parliamentary Committee on action taken by Government on the recommendations contained in the Sixty Ninth Report of the Committee (Fifteenth Lok Sabha) on Demands for Grants (2013-14) of the Ministry of Planning.
The PSC notes that “out of 60 crore residents to be enrolled by UIDAI by March 2014,...While the details regarding number of Aadhaar numbers generated has been furnished, the reply (of the Government) is silent as regard to the numbers issued.” The report notes that replies indicating action taken on all the recommendations contained in the Report were furnished by the Government on 22 July, 2013.
The PSC report observes, “the total budgetary allocations made for UIDAI since its inception upto (Budget Estimates) BE 2013-14 is Rs5,440.30 crore, out of which Rs2,820.30 crore has been utilised up to 31 March 2013 and the remaining amount of Rs2,620 crore has been allocated in BE 2013-14. The Ministry has informed that the average cost per card is estimated to range from Rs100 to Rs157. Taking the average cost per card to be Rs130, the total expenditure for issue of 60 crore cards is estimated to about Rs7,800 crore. Thus, the expected requirement of funds during 2013-14 is Rs4,979.70 crore, whereas only Rs2,620 crore has been kept for BE 2013-14, which is thus grossly inadequate. Given the tardy progress in enrollment/ generation of aadhaar cards, being done without legislative approval, it is doubtful that UIDAI could achieve the targets envisaged during 2013-14. The Committee is constrained to observe a disturbing approach in the budgetary exercise of the Ministry by fixing inflated targets without commensurate budgetary allocations. The Committee would, therefore, expect the Government to review enrolment progress/funds requirement and project realistic requirement of the funds after legislative approval.”
In an interesting development, Mukesh Ambani of Reliance Industries has expressed his support for biometric identification saying, “Aadhaar, an initiative of Unique Identification Authority of India, will soon support the world’s largest online platform to deliver government welfare services directly to the poor.” He has written this in a chapter titled ‘Making the next leap’ endorsing biometric profiling based identification in the book ‘Reimagining India’ edited by McKinsey & Company published by Simon & Schuster in November 2013. This appears to be an explicit signal to the political parties and media houses who receive direct and indirect corporate donations from companies as their clients in myriad disguises.
Coincidentally, the cover story of Forbes India magazine features “Rohini & Nandan Nilekani: The Conscious Givers” (Seema Singh, 13 December 2013 issue) for having won Outstanding Philanthropist award 2013. They won the award for “having given nearly Rs350 crore, especially to ideas which CSR doesn’t fund. Rohini has committed to giving Rs20 crore every year; Nandan has spent five years at UIDAI as part of the ‘giving back to society’ process.” It says, Nandan has a mission to invest “in institutions that pay off over years.”
The story notes “For Nandan, giving years to public causes is more expensive than writing cheques for ‘a few hundred crores’.” It reveals that Nandan is taking lessons in Kannada from a teacher to improve his Kannada ahead of announcement of the candidates by the political parties because certain ideas need “political energy” to get implemented. Notably, Rohini Nilekani funds both rightwing Takshashila Institution and left-leaning Economic and Political Weekly besides Association for Democratic Reforms, PRS Legislative Research and IndiaSpend, a data journalism initiative and The Hoot besides running her own Arghyam Foundation, a NGO.
It is germane to recall the strategies employed by the Stratfor precursor Pagan International to defuse the mobilisation of grassroots movements for his corporate clients. It used it to divide the main actors into four groups: Radicals, Idealists, Realists and Opportunists. The Opportunists are in it for themselves and can be pulled away for their own self-interest. The Realists can be convinced that drastic change is not possible and we must settle for what is possible. Idealists can be convinced they have the facts wrong and pulled to the realist camp. This categorisation is true about political, media and voluntary organisations as well. A noticeable section of these organisations have been co-opted to promote biometric aadhaar. The biometric technology vendors have admittedly built their positive coalition to outwit the negative coalition of progressive movements as part of their divide and succeed strategy wherein organisations of both left and right hues have been persuaded to act like their mouth pieces or maintain studied silence or address the issue at stake in a piecemeal manner.
Incidentally, another cover story titled “The Network Effect” (Caravan, Rahul Bhatia, 1 December 2013) has dwelt on how the big businesses like Reliance Industries have come to control both the message and the medium like TV18, which was part of the Network18 group that includes CNBC-TV18, the IBN channels, Forbes India magazine besides other channels, publications and websites. Not surprisingly, media houses in general appear quite supportive of the biometric Aadhaar disregarding its illegality and illegitimacy due to umbilical relationship or due to their dependence on advertisement revenues from agencies and enterprises that advocate biometric identification.
Now the question is will state legislatures and state governments support the recommendations of the parliamentary committee, Supreme Court, High Courts and the resolution of West Bengal Assembly guided by public interest or will they get influenced by the propaganda of transnational vested interests?
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(Gopal Krishna is member of Citizens Forum for Civil Liberties (CFCL), which is campaigning against surveillance technologies since 2010)
In the desire to beat benchmarks, many mutual fund schemes end up adopting strategies which do not work well in the long run
Mutual funds, as a popular investment vehicle, are often projected as panacea for investment requirements of individual investors. Since individual investors lack skills to invest directly in the market and have limited ability to manage vagaries of market movements, mutual funds become natural investment option for investors opting to invest in equities and some other complex asset classes. It is expected that mutual funds are professionally managed, reduce risks and offer returns which are should not just be able to beat inflation but be good enough to provide handsome return. It is because of these reasons that mutual funds are scrutinised extensively for their performance. Running a mutual fund is not an easy job. Over the last six years, especially post-2008 crisis, mutual funds have undergone microscopic examination and have experienced mass exodus of retail investors.
So what is it that makes the job of a mutual fund difficult and where does the challenge emanate from? There is more than one factor which poses challenges for the successful existence of a mutual fund. Here is an analysis of some of these factors:
Too many mutual fund schemes chasing too few quality stocks
As per AMFI (Association of Mutual Funds of India) data for the month of November 2013, there are 293 schemes of equity mutual funds in India. There is no doubt that these schemes cater to different requirements. While some funds are sector funds, some are large caps and some funds focused on mid-cap stocks. But the most relevant question here is: “do we have too many good companies in India?” In other words, do we even have 293 companies listed on stock exchanges which can be classified as investment worthy? The answer would be a firm NO. It is true that one mutual fund scheme requires only 20 to 30 companies for investment but with so many schemes of one single mutual fund around, it becomes challenging for a mutual fund managers to invest differently. Many mutual funds have ended up investing in such companies which have failed miserably and have given below average return. This has adversely impacted performance of mutual funds.
Inability to create product differentiation
For the reasons best known to a mutual fund house, many new schemes are created even when existing schemes are difficult to manage. More schemes mean challenges of product differentiation. It is often difficult to differentiate two large cap funds. The need for differentiation results into wrong stock selection or in some cases concentration of fund portfolio into selected stocks only. Nifty and Sensex stocks dominate most of the large cap funds with weightage of stocks being the lone differentiator. For an investor also, it becomes difficult to select one mutual fund from many similar types, unless a particular scheme has a past which shows that the scheme has done well.
Pressure to outperform benchmark indices
Recently one leading mutual fund came out with an advertisement on the first page of The Economic Times, claiming that all its equity schemes have beaten the benchmark index in a five and and 10 year periods. This shows how important it is for a mutual fund scheme to beat the benchmark index. Since comparison with the benchmark index is often seen as the barometer of the performance of the fund, mutual fund schemes put all their energy into beating an index. It is pertinent to note that while an index like S&P BSE Sensex is a passive entity, a fund manager gets all the opportunity to churn portfolios to beat the benchmark index. Still, many schemes fail to beat the benchmark index. In the desire to beat the benchmark index, many schemes end up adopting strategies which do not work well in the long run.
An investor generally feels that a mutual fund scheme will take care of his financial requirements of wealth creation. But in the current scenario, selecting a good mutual fund scheme has become as challenging as selecting a good stock. Proliferation of multiple schemes of mutual funds has created a dilemma for investors. While investment in schemes of a mutual fund is a good idea for sustainable wealth creation, selecting a good mutual fund has become the biggest challenge for an ordinary investor. Needless to say, this comes from the difficulties that mutual funds have created for themselves.
(Vivek Sharma has worked for 17 years in the stock market, debt market and banking. He is a post graduate in Economics and MBA in Finance. He writes on personal finance and economics and is invited as an expert on personal finance shows.)
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