Leisure, Lifestyle & Wellness
Science can answer how but no why

A reductionist western science is incapable of answering the ‘why’, science can only seem to answer the 'how'. Does science need to borrow from spirituality and vice-a-versa?

Nobel laureates, like Peter Medawar, tell us that science is designed to answer only certain (mundane) questions and not answer esoteric questions like ‘what after death’? Or ‘why does the heart contract’, etc. He compares science to a railway engine designed to run on a track but not fly like an aeroplane, in his classic, Limits of Science. The reductionist Western science is incapable of answering the ‘why’, although it tries to answer ‘how’ or ‘how much’. Unfortunately, answers needed are only for the ‘why’ questions.

As a doctor for more than five decades, I am disillusioned by modern Western science. Why does a young man, apparently healthy, die suddenly of a massive heart attack, despite his having done everything scientifically correctly, while an elderly gentleman, with advanced coronary artery disease, still jugs on beyond 80? Science is simply making models which are mathematical constructs and, with verbal jargon, they are supposed to work. When one sees liquid helium climb up the sides of its container to overflow one wonders what happened to all our laws of thermodynamics. Liquid helium, kept in a silicon bowl, leaks out through its intact base!

When we claim that the heart, a small muscular structure weighing just 300 grams, pumps blood into a capillary system of totally 500,000 kilometres, which are thinner than our hair, not letting even a red blood cell to pass through easily, we are not being truthful. But neither did we ask such questions nor do we let our students do that.

When I read science books which are more than one 100 years old, the authors did have sentences like: “My God, only God can answer this question!” Today’s science wants to be all-knowing and the concept of God does not seem to exist.

A recent science study in biology, of experiments with rats, showed that the sex and sweat smell of the researcher affects the results to the extent of 40%—male researchers being more effective. Observer’s consciousness does affect the results. Quantum physics is absolutely right when it says everything exists as energy vibrations but collapses into matter on observation. That final awareness, observation of the observer, his/her consciousness, makes this world come alive. How very true indeed!

Robert Lanza, a genius of a physician and his co-author, Bob Berman, a maverick astronomer, have written that wonderful book, Biocentrism: How Life and Consciousness are the Keys to Understanding the True Nature of the Universe,  where they claim that the world lives around life and for life—bio-centrism—as they call that all-encompassing consciousness—which is at the root of all science.

Hopefully, medicine would become bio-centric and not drugs- and surgery-centric reductionism. Candace Pert, a daring young researcher at the National Institute of Mental Health, did show to the world for the first time that opiate receptors also exist outside the brain. Now we know that the human mind resides in every single cell at the cell membrane called MemBrain.
Providentially, I had written in my book, Holistic Living, in 1993 that there is a possibility of a mind in every cell. The editor of the publication had questioned my serendipitous thinking.
Recent research at Oxford, led by Professor Bingel, elegantly showed that all healing occurs, NOT because of our medicines but because of the patient’s belief in the doctor and the medicines he gives, true placebo effect, another brainchild of consciousness.

Only one thinking scientist in the Western world, Max Planck, has written that “I regard consciousness is fundamental. I regard matter as derivative from consciousness.” I don’t think that the best surgeon will not able to heal a surgical wound in a dead body without consciousness!

Caring and sharing is spirituality in essence. Occult healing methods were used in healing in many civilizations and with success. We will have to re-invent them, for the good of mankind. Let us get out of our arrogant mind-set that only science can solve all our problems. This is partly due to the success of reductionist science-based technologies, like the semiconductor, etc, which have apparently made us more comfortable at the cost of our good health. Let wisdom prevail and God help mankind.

Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS.

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COMMENTS

Awadhesh

2 years ago

You HAVE to read this article.

http://www.washingtonpost.com/national/h...

Awadhesh

2 years ago

You HAVE to read this article.

http://www.washingtonpost.com/national/h...

Nalin Patel

2 years ago

indians are much more aware of this, india is leader in spiritual matter, emeperical science can complement spiritual sicience.

Dividend rules tweaked: MCA makes setting-off of past losses mandatory

The tendency of pushing through substantive changes in the law through the Rules, completely bypassing the parliamentary process, continues unabated and is an extremely undesirable practice adopted by the MCA

Clearly, the Ministry of Corporate Affairs (MCA) is working fast and hard, in correcting the scores of anomalies and absurdities of the law passed and hurriedly enforced by the previous government. Over the last few days, lots of circulars, notifications and removal of difficult orders have continued to flow in. However, the abominable tendency to push through substantive changes in the law, while ignoring the parliamentary process continues unabated. The change discussed in this article, made by a notification of 12th June, actually amounts to putting in place a completely new provision for offsetting of past losses before companies may distribute dividends. This changes the position as it prevailed under the 1956 Act, and this change was nowhere discussed by any of the Committees that preceded the 2013 Act. Neither does the main law, the 2013 Companies Act envisage such a change. Therefore, the question is – could such a substantial change in law have been done by a virtually unnoticed notification?

Dividend declaration rule:
Rule 3 (5) of the Declaration and Payment of Dividend Rules has been replaced by a notification of 12th June 2014. The rule, before its replacement, read as follows:

(5) “No company shall declare dividend unless carried over previous losses and depreciation not provided in previous year are set off against profit of the company of the current year the loss or depreciation, whichever is less, in previous years is set off against the profit of the company for the year for which dividend is declared or paid.”

Clearly there was something terribly wrong with the language of the old Rule. Now, the said garbled rule has been replaced by the following:

(5) “No company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company of the current year."

Impact of the change:
The amendment, besides clearing the wording of the earlier rule, marks a change from the position in the 1956 Act. In sec 205 (1), proviso (b) provided as follows:

(b) if the company has incurred any loss in any previous financial year or years, which falls or fall after the commencement of the Companies (Amendment) Act, 1960, then, the amount of the loss or an amount which is equal to the amount provided for depreciation for that year or those years whichever is less, shall be set off against the profits of the company for the year for which dividend is proposed to be declared or paid or against the profits of the company for any previous financial year or years, arrived at in both cases after providing for depreciation in accordance with the provisions of sub-section (2) or against both;

Though the language of the proviso was also unclear, but in Ramaiya’s Guide to Company Law, this proviso has been discussed at length. The interpretation has been that if there is a loss before depreciation, and then there is a loss after depreciation, it is necessary to offset only the depreciation and not the loss before depreciation. This interpretation became clear with the combined reading of proviso (a) below sec 205 (1) with proviso (b). Proviso (a) required the company to provide for depreciation, if the same was not provided for in the previous years. There was nothing in sec 205 (1) requiring the company to offset losses of previous years before declaring dividends.

Now, Rule 3 (5) requires all “carried over losses” and all unprovided depreciation to be offset before declaring any dividends.

For companies that have just turned around, attracting capital on the strength of dividend payments becomes quite important, particularly if it is preference capital. If the company has to make good all its past losses before it starts distributing dividends, the company’s ability to declare dividends, particularly when it is so necessary to attract capital infusion, gets impaired.

Substantive change comes silently via a subordinate law:
The tendency of pushing through substantive changes in the law through 'Rules', completely bypassing the parliamentary process, continues unabated and is an extremely undesirable practice. Before a law changes substantively, there are extensive pre-Parliament discussions (such as the Irani Committee, Standing Committee of Parliament, etc). There may be debates in the House as well. There is a benefit of a Bill, discussions with the stakeholders, and so on. However, the change in the Rules simply comes by way of a notification, and it may actually change the law substantively.

The present change in the dividend distribution rights of companies is an example. Section 123 (1) (a) provides for payment of dividends out of current profits. It does not make any reference to offsetting of losses of previous years. Neither does it empower the Central Government to make any rules about what amounts may be offset before distributing dividends. It is questionable as to how the Central Government goes and make a rule with no empowering provision in the Act.

There is no discussion in the Irani Committee Report, or in the Parliamentary Committee reports, on the issue of whether past losses should be offset before distributing dividends.

(Vinod Kothari is a chartered accountant, trainer and author. He is an expert in such specialised areas of finance as securitisation, asset-based finance, credit derivatives, accounting for derivatives and financial instruments and microfinance. He has written a book titled “Securitisation, Asset Reconstruction and Enforcement of Security Interests”, published by Butterworths Lexis-Nexis Wadhwa.)

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COMMENTS

Naresh

2 years ago

Sir Nice Articles.

Nagesh Kini

2 years ago

Vinod - Thanks for your write up that is most apt.
Indian Hotels Co. Ltd. the owners of the iconic Taj group in 2012-13 despite having substantial losses for the year declared dividends claiming that they are out of retained earnings. It begs the question - is it good corporate governance to deplete the bank balances when the company is in bad shape just to 'keep shareholders happy'?

Nagesh Kini

2 years ago

Vinod - Thanks for your write up that is most apt.
Indian Hotels Co. Ltd. the owners of the iconic Taj group in 2012-13 despite having substantial losses for the year declared dividends claiming that they are out of retained earnings. It begs the question - is it good corporate governance to deplete the bank balances when the company is in bad shape just to 'keep shareholders happy'?

Why should government fund PSU banks all the time?

At least some of the PSU banks cannot claim to be cash-strapped, especially looking at their cash reserves. By capitalising their reserves instead of seeking fund from the government, they would be rewarding their share holders as well

Press reports indicate that some of the public sector banks (PSBs) are seeking more capital ahead of the budget, which is scheduled to be presented by the second week of July. According to these reports, cash-strapped public sector banks "hit by a higher proportion of stressed assets and global Basel III requirements" have begun listing out capital requirements ahead of the budget in July.

 

In the interim budget, the Congress-led United Progressive Alliance (UPA) government had earmarked Rs11,200 crore as capital for all public sector banks. In 2012-13, the government had, in fact put in Rs14,000 crore. This kind of funding must stop, and the banks need to be able to generate their required funds from investing public.

 

Since the last couple of months, all leading newspapers have carried details of the balance sheet of a large number of organisations, including pubic sector banks. The following information has been collected from these announcements:

 

Name of Bank

Paid up Capital (Rs crore)

Reserves (Rs crore)

Allahabad Bank

544.61

10644.56

Bank of Baroda

430.68

36349.21

Bank of India

643

24629.95

Bank of Maharashtra

839.1

4917.02

Canara Bank

461.26

23660.6

Corporation Bank

167.54

9952.37

I D B I

16.03

202.93

Karnataka Bank

188.42

2863.78

State Bank of India

746.57

146623.96

Syndicate Bank

624.58

11387.25

UCO Bank

1014.71

9624.18

Union Bank

630.31

16544.67

 

From the above, most of the banks mentioned appear to have healthy cash reserves. If and when they need funds, they should be able to raise it from the investing public either by rights issue or even by capitalising their reserves.

 

However, in the present situation, specific amounts of assistance appears to have been sought from the government by IDBI and Indian Overseas Bank, and it is likely that some more may join the band wagon to seek capital infusion.

 

As mentioned above, at least some of the banks cannot claim to be cash-strapped! By capitalising their reserves, they would be rewarding the share holders too.

 

In the meantime, it is being reported in the press that GS Sandhu, secretary for financial services, has underlined the need for banks to sell off their non-core assets. The companies identified as non-core include rating agencies such as ICRA, CARE, National Stock Exchange (NSE), IL&FS, UTI, Multi-Commodity Exchange (MCX), Stock Holding Corp of India Ltd (SCHIL), Central Depository Services (India) Ltd (CDSL), and asset reconstruction corporations (ARCs). The estimated value of these assets would be around Rs25,000 crore.

 

As we can see from the details given above, the reserves are huge, compared with the paid up capital of these state-rund lenders. It is pay back time for these banks. Why not buy out the government share in line with the established formula for this purpose and reduce the government holdings?

 

Years ago, the Atal Bihari Vajpayee government had suggested that the Centre could reduce its stake in public sector banks to 33% but the move did not go through as the law could not be amended. Now this can easily be achieved and Vajpayee's proposal could be implemented!

 

After doing this, should the banks need any additional capital infusion, they ought to go to the shareholders instead of going back and forth to cash rich Life Insurance Corp of India (LIC) and other similar institutions, which only means that the Government stake would keep rising, instead of being held by the investing public.
 

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

 

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COMMENTS

Ralph Rau

2 years ago

This article seems based too be based on the assumption that Reserves = Free Cash

In reality the Reserves = Liability side of the balance sheet is not free cash. It is sitting blocked as a Loan to the bank's borrower. And a lot of these loans are sticky and being rolled over given the borrowers inability to re-pay ?

sabyasachi samal

2 years ago

I find many who comment here on banks i find the writer or the opinion providers are ignorant of or not experienced in having banking related works...even they claim to be what so...I humbly request to all writers please understand why the situation is like this....Why only for government banks? If government banks will not fund the undeserved persons and did not fund the farmers who are the worst people in our country from banking point of view then these banks would not been in such a situation again if these banks do not fund mallya this could also be avoided...I find one thing behave like rural money lender if you do not able to pay i will throw you from your house and will auction your house...If this type of practices are being followed then no fund is needed from stupid government...I think all CA and Finance experts will be able to understand so...Please come to a village and live the life of a banker only writing in AC room will not yield anything.

Dr Anantha K Ramdas

2 years ago

Thank you Mr Gopalakrishnan for your comments. There are quite a few PS Banks that are not asking for "infusion" of capital because they have learnt the art of banking and are self-reliant.

For once let the Government refuse and say that "you guys fend and fund yourself;if not we will sell our shares to public and the work be done on a professional basis" Such a stern warning would make them wake from their deep slumber and start working to get results.

No more spoon feeding please at the cost of tax payer.

REPLY

suman chakraborty

In Reply to Dr Anantha K Ramdas 2 years ago

Blaming PSU bank management for the bad financials of PSU, is the typical blame it on somebody else mentality.
PSU banks and LIC has been subjected to financial raping by Central Govt. Mandatory loans to undeserved entities, whimsical loan waivers etc. adds to the NPA as well as overall de-motivation of Staff.
The problems are very deep rooted and no superficial solution will work.

Gopalakrishnan T V

2 years ago

The only reason that can be adduced for PSU banks' dependence on tax payers' money is total Governance deficit. The Board is neither accountable nor respomsible and the members of the Board have no sense of involvement and commitment. When the balance sheets are strong,the reserves are very high,NPas are reasonably low and Capital adequacy ratio is well above the prescribed regulatory requirement, the Government should not extend any capital support. Further,if the dividend received by the Government far exceeds the normal return on equity investment,then also further capital induction is unnecessary. Is there any analysis done by the Board or by the Government or RBI before capital is inducted? It is time tax payers and depositors have some say in the management of the Bank. There should be representatives of tax payers and depositors on banks board or at least they should have some say when the NPAs reach beyond certain levels, expenditures exceed certain cut off limits, fall in dividend distribution and there is induction of capital by the Government.Time a close watch is kept on banks' functiong by depositors body.

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