Marching against corruption in India is akin to marching against corporate fraud in the US. Civic activism across the globe is taking place because the youth want more transparency and fairness in the system
Across the United States and across the world, young people, and some not so young, have gathered in city centres to protest. This so-called and misnamed ‘Occupy Wall Street’ protest is supposed to be about a protest against capitalism and globalisation. But the protest, which has been criticised for lacking in goals, is not about markets. If it was, it could be dismissed. It is about something deeper and more important. It is about fairness.
The concept of fairness is something that is not only basic to humans, it is also found in primates. Monkeys trained to trade pebbles for cucumber slices become less cooperative when some of their colleagues get tastier grapes instead of cucumbers. When the grapes are given to a few monkeys without even the required pebble, the other monkeys will go on strike and toss the cucumber back at the tester and throw their pebbles away.
The protestors certainly have a point. In many countries, the economic divide between rich and poor has been growing. One way to measure the difference is the Gini coefficient. The Gini coefficient is a measure of the inequality of the distribution of a nation’s wealth. It is always expressed as fraction between 1 and 0. If the value is 0, then all citizens of a given country have the same amount of money. If the value is 1, then one person owns everything.
Some of the lowest Gini coefficients are as one might expect in Northern Europe. Sweden and Norway have Gini coefficients of 0.23 and 0.25, respectively. Most developing countries have very high Gini coefficients, with Latin America ranking the highest. Brazil has the top number among the BRICs with a 0.56. China is at 0.47, while Russia’s Gini is at 0.42. Only India remains at a relatively equal 0.36. The Gini coefficient is not only high, it has been rising. In the US in the mid 1980s it was 0.34. It is now over 0.4. China is even worse. Over the same period it went from 0.3 to close to 0.5.
Economic unfairness is not static. I live in the small city of Newport on the east coast of the United States. At the end of the 18th century, the houses of the frugal merchants and seamen were all rather small and about the same size. A hundred years later at the end of the 19th century, the super-rich built huge opulent mansions to be used only in the summer. In those days, the top 0.1% earned 8% of the country’s income. Two World Wars and a Great Depression sort of evened things out. By the 1960s, the number had fallen to only 2%. But things change. By the beginning of the 21st century, the top 0.1% again receives 8% of America’s income.
In contrast, the future for young people around the world is hardly promising. The unemployment rate in the US is 9.1%. For people below 25 it is 17.1%. In the European Union, youth unemployment rate averages 20.9%. In Spain it is 46.2%. This number is not unusual. Perhaps one of the principal causes of the Arab Spring was the unrest among unemployed young men. In South Africa it is over 50%. The recession will no doubt exacerbate these numbers. In the nine past recessions in the US, employment recovered 10 months after the economy recovered. In this one, employment is not expected to recover for another three years.
Is capitalism the source of this unfairness? Not really. The promise of America has always been the promise of rising income due to a market economy. What has changed?
The great economist Mancur Olson pointed out that power groups within a system will, if not limited, take more of the economic pie rather than attempt to grow the pie. To do so they use their power to increase their cut with various methods. Most involve the government and laws. They encourage lower taxes, favourable or discriminatory regulations, preferred access to contracts, higher subsidies, better salaries, protected employment, higher pensions etc. If that is not enough, they simply steal through massive corruption. As the power groups grow richer, so does their power to affect and steal from the government.
But it is not just the avaricious immoral the rich. It is often the old. Conservative Tea Party members in the US and their Left-wing compatriots in civil service unions in Europe and Brazil are comfortable, because the political system works for them. They want to keep it that way.
So what the young people demonstrating across the world want is a fair chance. But what is at stake here is not just their future. Fairer systems are less distorted and encourage economic growth. So in the end they are not trying to destroy capitalism. They are trying to save it.
(The writer is president of Emerging Market Strategies and can be contacted at [email protected] or [email protected]).
Old-age or retirement homes are still a nascent concept in India. Here are a few guidelines on what you should examine before you shift into one of them
The concept of old-age homes is one that is still viewed with serious misgivings in much of typical Indian society. Barring some specific communities which have built-in safety nets for the elderly within their ecosystems, most other Indians would rather usually state—whether truthfully or not is another thing altogether—that the family system in India is “designed” to look after such requirements as people grow older. And increasingly of late, the elderly end up either living on their own in splendid solitude with high expenses and higher issues of life and house management, or on sufferance with the next generation.
Fact remains, this is something which many people fail to address upfront, whether for themselves or for the elderly people in their families. For a variety of reasons—increased life expectancy, fewer children, parents of NRIs, property-linked issues, space in ancestral dwellings, the social issue of what others will say, and more—the reality is that a larger number of elderly people are now in more ways than one expected to look after themselves. Or, in some other cases, manoeuvre their property wealth without being able to utilise it for a standard of living they enjoyed when they were younger. Or worse, continue on sufferance in a limbo land, waiting to pass on.
Moreover, with medical science now in a position to extend physical life but still not at grasps with mental issues, the real issue of how elderly people with a variety of mental ailments or issues will live is simply not addressed. Here again, left to rot and at the mercy of their fate, elderly people may be asset-wealthy and able to afford much more but are simply not able to cash in and reach out to the facilities which old-age homes may be in a position to offer —for multiple reasons.
And for those getting there, those in their middle age and getting towards being considered “elderly”, the horizon is not too far. Already, the definition of a ‘senior citizen’ implies women in their mid-fifties and men not too far behind as far as railway ticket fares are concerned. Likewise, for those who so desire, the need to keep working after the children have been “settled” is often simply an option. And finally, the ever-increasing tribe of people who can work from home means that those who are reaching their sunset years can and do need to start thinking well in advance on where they are going to spend their years of dreamt-for peace, quiet, and relaxation.
The big question here, then, often is this—where are we going to live when we grow old and want to relax? Modern communications and better roads have made it possible to have the same level of connectivity with the rest of the world—family, travel, commerce, banking, investment-management, tax-compliance and more—from anywhere in the country. Even the remotest of corners are now linked to the great grid in the sky—and often better than in urban areas, too. Put it this way—out there in the jungle, I can read the same books as can you in the middle of the city, and have access to everything you have in the city—but with cleaner air and lesser aggravation, usually.
The default option would be the prime urban centre that one built is the one which one roots in. However, with property asset prices being what they are, very often the linked maintenance of property costs as well as the sheer headache of the transactions that go with such things, starts taking on a life of its own—people looking forward to an easy retirement often don’t realise it as they head into becoming high-cost “managers” of their abodes.
The second option would be to downscale size without losing out on standard of living. Without children at home, the need to maintain bigger homes or multiple vehicles comes down, so gated communities with smaller houses or apartments could be one option. But here again, the gated community system often seems to be geared more towards middle-aged people, especially those with work regimes and younger children. On the positive side, these tend to be within or close to urban areas—if you are looking for something like this, then it may well work.
Side-step into the concept of “builder floors” in some cities, and the linked issues of clear title, especially with the new Supreme Court rulings on properties transacted basis on General Powers of Attorney. For most people, releasing an older property with clear title for a newer property which may not have the same clarity is a risk they would rather not take. And quite rightly too.
But it is the idyllic semi-urban ambience, out-of-town but still not too far away, with clean air, less noise, and reasonably sylvan surroundings, which make for the dreamt-for old-age retirement and relaxation homes for those of us in the middle class in many cases. Basic medical care within easy reach, shared resources to some extent, and reasonable privacy too. All with full options for things like clubs, libraries, gardens, walking areas, backup power, and living space just enough for ease of maintenance. Of course, all these facilities should be provided in absolutely foolproof security.
Do such options exist in India? The answer increasingly is “yes”, as more and more projects aimed at retirement homes for senior citizens are being announced, with some already underway. Over the past few decades, quite a few such “senior-citizen enclaves” or “old-age colonies” have sprung up, almost all over the country. And more are in the offing. From absolute barebones apartment complexes on freehold basis, to fully-furnished and all amenities provided for kind of swanky 5-star lodgings, you seem to have a choice.
Here is a brief advisory on what to expect, what to look for, and how to go about things.
This writer visited senior citizen retirement homes in five cities in India— Dehradun, Delhi NCR, Pune, Bengaluru and in the mountains above Kottayam (Kerala). Each one of them was on a different model, but each one seemed to also satisfy the requirements, so a basic grid was drawn and understood. By no means is this composite or complete, and there is every reason to expect these facilities will emerge and improve organically, as a need & supply curve emerges. However, here are some basic issues you may wish to look out for:
1) Title: Will the property be freehold, long-term lease, rental or based on the balance of life? In each case, what will be the “exit clause”, be it if on expiry of one or both occupants, or if you wish to transfer out, for any reason. Take some good advice on the simple mathematics of this. Long-term lease and rental are easy to understand, co-terminus with life is delicate but details have to be addressed and freehold means you have to—in advance—know what your heirs or you will need to do for onward sale of the property.
As an example, in one such community, there were two options—purchase freehold or use co-terminus with life basis a deposit where the property reverts back to the builder after death of the occupant. In one case, one of the elderly people who had bought outright bequeathed the apartment to his grandson, who was unable to use the property because there was an age stipulation. Nor was he permitted to rent it out. So he had to sell it.
2) Monthly out-go: Check exactly what is covered under this and what is not covered. How will you be expected to cover for inflation as well as short-payment or non-payment by other members? What are the mechanisms for redressal and how does the role of a Resident's Welfare Association (RWA) dovetail with the facility management? And which government act or law covers these costs and contracts, especially since these are not co-operatives in most cases?
Here’s an interesting episode which involved one such facility which provided for washing clothes as well as linen of the elderly residents. In due course of time as the clothes and linen got older, they started getting damaged while being washed, and led to claims as well as counterclaims. Likewise, the security guards were being used for washing cars, which was not covered in the list of things to do.
3) Medical facilities: Here again, exact definitions down to the fine print need to be covered in advance. “Ambulance at call” sounds good on paper, but how much will it cost, where will it come from, and does it lock you into a particular hospital—all these factors have to be considered. What will the small dispensary have by way of medicines, and which of these will need to be kept in reserve, and which of these can be issued to residents—for example, cough syrups, are residents to buy their own or does the dispensary provide the same?
In one society, a doctor was supposed to be available every evening, at a fixed time. For his services, he was also allowed to run a general clinic in a small outlet on the external boundary of the property. In due course, the members started using his services on a daily basis, and the doctor could not see everybody which further led to people lining up by leaving chits on chairs as queue-markers—or going to his clinic and demanding preferential treatment for free.
4) In one property where the apartments were provided on a freehold-sale basis, many elderly people bought in on an “investment basis” and simply did not use the facilities, which increased per person costs for those who were staying on. The price of the apartments also skyrocketed as the demand grew for investors, and pretty soon the actual occupancy dropped to below 30%. At which point those remaining behind started feeling lonely. Could they force people to live there?
In addition, the unoccupied apartments started attracting the attention of pigeons, monkeys and wild/stray dogs—all of whom put together made life miserable for the residents. Being freehold, there was no way people could be forced to occupy the apartments, and attempts to let their friends or guests stay there even to clean up the place were resisted by the RWA, leading to even more bad blood.
5) One more interesting option was the concept of ‘reverse mortgage’ of the property, and how it could be taken forward, given that the whole concept of retirement homes or senior-citizen colonies was still not clear on the concept of transfer after death of the original owner. With the value of the apartments shooting through the roof in the case of successful projects, this was a real need, and currently unfulfilled.
No bank would want to lock itself in with a property which it could not dispose off, as conditions for sale were basis preapprovals from the project managers as well as the RWAs, and so a few reverse mortgage opportunities had fallen through. That, along with lack of clarity on how the apartments would be rehabilitated after their projected lifespan of 30-40 years, was another open issue.
Note: Exact prices and numbers vary geographically, so have not been quoted, however, as an indication, these properties were all located outside town (except in Pune and Bengaluru) and therefore benefits of location also accrue.
This is not to say that the concept of senior citizen homes or retirement communities is failing, or difficult to manage—far from it. Each one we visited had waiting lists. Some others were total flops, too. The common factor at most of the successful properties visited was that by and large people co-existed and helped each other out in a spirit of live and let live. To some extent, especially in two facilities where the communities were upper middle class and higher and also diverse in demographics as well as backgrounds, it was interesting to observe that the armed forces lifestyle of self-help and be of help to others quickly permeated across to the civilians too from the armed forces occupants.
But a lot depends on the kind of initial agreements, as well as the terms and conditions which the project and its promoters offer to the occupants. There are no firm regulations on this subject anywhere in the country, as yet, and so a lot depends on the “heart and soul” of the builder or promoter. Likewise, these projects do not seem to be advertised very heavily—one reason offered was that the good ones sell out fast and the bad ones linger, and the grapevine tells people which is what.
As one builder/promoter said candidly—this is not for charity, this is certainly a business project like any other project. However, this is also close to my heart since I can only think of my parents while doing this, so I need to make it succeed. And for that I need feedback from users as well as prospective users, sensible feedback, which takes into account that everything has a cost. He also mentioned an attempt to try to do a project like this with a reputed hospitality group, which was in an advanced stage of negotiations, and wanted to
Readers are requested to revert with ideas on what they would expect from a retirement or senior citizen’s home, bearing in mind that everything has a cost, and that this is still a nascent industry.
The decision to probe the DTH broadcasters was taken after agency sleuths found that some of the telecom companies, under probe in the 2G scam, were also broadcasters of the service
New Delhi: After his alleged involvement in the second generation (2G) scam and leasing of telephone lines, former telecom minister Dayanidhi Maran’s ‘role’ in sanctioning of spectrum to Sun Direct is now being looked into by the Central Bureau of Investigation (CBI), reports PTI.
The agency had sought the files from Department of Telecom (DoT) related to spectrum allocation made to direct-to-home (DTH) broadcasters by seeking details of sanction of bandwidth.
The decision to probe the DTH broadcasters was taken after agency sleuths found that some of the telecom companies, under probe in the 2G scam, were also broadcasters of the service, official sources said.
The files pertained to Dish TV India, Reliance Big TV Pvt Limited, Bharti Multi-media, Bharti Business Channel Pvt Limited, Doordarshan, SunDirect TV Pvt Limited and Tata Sky.
However, barring Sun Direct, all other files were returned by the CBI to the authority and sources in the know said allocation of spectrum to the Tamil Nadu-based TV channel was being looked into.
The CBI recently registered a case against Mr Maran, his brother Kalanithi and two others besides three companies for allegedly receiving favours during the DMK leader’s tenure as telecom minister.
Searches were carried out on 10th October at various places including residential premises of Maran, who resigned earlier this year as textiles minister.
The CBI has also registered a preliminary enquiry to probe into allegations of allocation of over 300 telephone lines to the residence of Mr Maran in Chennai and illegally linking with a television channel owned by his brother.
These 323 residential lines were in the name of BSNL general manager and connecting the Boat House residence of Mr Maran with office of Sun TV through a dedicated underground cable during his tenure as telecom minister, CBI alleged.
The sources said these lines were not ordinary telephone lines but more costly ISDN, capable of carrying huge data thus facilitating faster transmission of TV news and programmes across the globe.
The CBI alleged that a stealth cable was used to connect the residence of the minister with Sun TV office to give impression that these lines were for the minister but actually they were used by the channel.